Intellectual Property: who owns it?

One of the biggest sources of disputes in industries based on or using technology is lack of clarity or agreement about who owns the intellectual property in the technology created.  This is the case whether the creation comprises written works, software code or other technology. 

Knowing what rights you have over the works or products you have commissioned or created is clearly important and yet, surprisingly, businesses often fail to address this when agreeing the work to be done.

The basic rule is whoever creates the intellectual property will be the owner of it, unless (i) the creator is an employee and has created the intellectual property in the course of his employment (in which case the employer will generally own it), or (ii) there is a specific agreement that the intellectual property belongs to someone else.  This means that (except in the case of registered or unregistered designs) even if you commission someone to create a work, software or something else for you, they will retain the intellectual property to that work, software or thing regardless of how much you have paid for it.  You will not own the technology outright, but will have a licence to use it; however, the scope of that licence will not be clear unless that, too, is agreed.  This could seriously impact on your ability to use or exploit the technology.

It is therefore advisable to have a written agreement documenting who owns what and what rights each party has; this will create clarity and reduce the risk of dispute over ownership further down the line:

• In the situation of employee/employer this could be dealt with in the contract of employment.  This could provide that anything created during office hours or using the employer’s resources would belong to the employer and should, from the employer’s point of view, be reinforced by strict confidentiality obligations and provisions dealing with misuse of company property and data;
• If you use self-employed consultants to carry out work for you or your clients, you will need to consider whether you or the clients will need to own the intellectual property in the work, what rights you or the clients will need and what rights the consultant is to have.  It is also advisable for the consultant to waive what are known as “moral rights” as this could affect your ability (or the client’s ability) to modify or exploit the work.  This can be dealt with (alongside confidentiality) in a consultancy agreement;
• In a situation where you have commissioned someone to develop some technology or product for you, you will want to ensure you can fully utilise and exploit the product.  In most cases an assignment of intellectual property rights will probably be appropriate, but in some cases an exclusive licence in certain fields may be the answer.  A written contract should specify who will own the technology or product, and whether the other party has any rights to utilise the technology or product, for what period and to what extent; 
• In a situation where you have been commissioned to develop some technology for a customer, you will need to consider whether you want to retain any rights, whether you are using any pre-existing or generic technology or intellectual property and whether you will need to incorporate any third party material.  In addition you will need to consider what rights you are willing to concede to the customer.  This should all be dealt with in your terms of business or other contract documentation.

This is a basic overview of general considerations which arise in connection with developing technology and intellectual property but is not a substitution for getting proper advice on your specific situation or a specific agreement.  Intellectual property is an extremely complex area of law and many a dispute has arisen where the issue has not been properly considered or dealt with.  It is vital to make sure that the ownership of it sits where you think it does and to ensure you have the necessary rights to be able to fully exploit it as you intend.   We will be happy to advise on these issues and on any necessary documentation.