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Who owns the intellectual property employees create?

On Behalf of | May 22, 2023 | Intellectual Property

When recruiting talent, you probably want employees with skills that add value to your company. For example, if you run a software business, you may focus on job candidates trained in the latest digital technologies.

Hiring talented employees can also benefit your company in other ways. The intellectual property they might bring to the table could help your business stand apart from the competition.

But who owns this property—your company or its creator?

It depends on several things

Like so many business issues, there is no fast and simple answer to who owns the intellectual property created within a company. Generally, the company owns the rights. However, it is unwise to assume this is the case, especially if you want to avoid losing access to employee-owned property.

Consider the two factors below to clarify ownership.

Terms of employment agreement

More companies and employees now address intellectual property rights when negotiating employment agreements. Prospective employees usually want a clause stating that they own the property. On the other hand, employers who depend on in-house innovation and creativity also want to protect their rights.

Before assuming the property belongs to your company, revisit your employment contracts and look for terms that may clarify ownership.

When and where it was created

Another potentially sticky intellectual property issue involves the time and place of its creation. Say that an employee develops a cutting-edge process that cuts manufacturing costs by almost half. If they made the breakthrough off-duty but on a company device, the business may have a valid claim of ownership.

Employers should consider fine points like these when determining who owns property developed in the company.

It may be possible to prevent disputes over intellectual property by having your employment agreements reviewed for clarity and legal accuracy.