Dutton Gregory’s intellectual property expert Laurie Heizler looks at intellectual property (IP) ownership.
The rules of ownership of IP are often not straightforward. They depend on the kind of IP in question and the status of who created the work.
Registered IP rights
In the case of registered rights such as patents, trademarks and designs, the first owner is the person who applied for registration.
What ambiguities may I face?
- A patent can be overturned if it becomes apparent that the invention it covered already existed in a similar form (or if it was not kept properly confidential before it acquired patent protection).
- It is not automatically conclusive that a registered trade mark owner “owns” his own trade mark. Somebody else may have entitlement acquired by previous use and goodwill. The first user has the unregistered trade mark and could use it to challenge and perhaps invalidate the subsequent registration
- It sometimes happens that a previous owner or an ex-employee of a business obtained IP rights in his own name, when they should properly belong to the company or its current owners.
- A co-owner may have disappeared or be in dispute with other co-owners who cannot exercise their rights in the relevant IP.
- A business may not have carried out sufficient due diligence to allow it to be sure that another business or an administrator of an insolvent entity had good title to sell IP assets.
Unregistered trademarks and design rights generally belong to the user. The rights may be strong if the user has built up reputation and goodwill. It is sometimes a complex factual issue to demonstrate continuous goodwill vesting in a single entity.
In the UK, copyright arises automatically with respect to any original creative work such as books, website text or software code. Copyright also arises in artworks and, photographs as well as in layouts, plans and typographies.
Who owns employee-generated copyright?
By statute law the first owner of copyright is the author or creator of the work. If the author is somebody’s employee, and his work is created “in the course of his employment”, his employer is the first owner. Cases turning on these words are very relevant given the institutionalisation of working from home since the COVID-19 pandemic. It does not necessarily defeat the statutory presumption that his employer owns all copyright in his work if the employee uses works from home in his own time using his own equipment.
The determination of employee status is equally important. The existence of a contract of employment will generally be conclusive.
The position of independent contractors
Independent contractors and consultants are not of course employees so they own copyright in their own right.
If there is doubt about copyright ownership by the employer, it may be possible to obtain written assignments - from employees who create something that the employer deems to be useful but where there is a question as to whether his work was within his job description, and from independent contractors. In law, any assignment has to be in writing signed by or on behalf of the person transferring the copyright.
To ensure you have IP ownership, the following actions are advisable:
Registered IP owners: have you correctly recorded in the name of your company or its owners all IP that has been granted, registered or applied for?
Employment contracts: you should be able to answer the following questions:
- Do they clearly show the exact scope of your employees’ duties? There must be no question that your employees always act in the course of their employment
- Do your contracts ensure ownership by the employer of work generated in other countries where IP ownership rules may be different?
- Are there provisions obliging employees to report any work in which IP might arise?
- Are the confidentiality provisions strong enough to deter disclosure of technologies and designs that could lose IP protection as a result?
- Has your employees’ attention been specifically drawn to all IP and non-disclosure provisions in their contracts?
Assignments: can you show written assignments of copyright material prepared by contractors? This is particularly important in the case of software and words and images used in websites, social media and advertising materials generated by freelancers and external agencies.
If you have any issues in connection with the ownership, exploitation or defence of intellectual property rights, please contact Laurie on 01962 624423 or email him at email@example.com.
© Dutton Gregory LLP 2022