Ownership of intellectual property (IP) can be a contentious issue. Smart employers delineate the ownership of IP created during a working relationship in writing. Without a written contract, the ownership is determined by state and federal laws, including laws on trade secrets, copyrights, and patents. Which laws apply can vary depending on the type of intellectual property involved.
Unless the employee is hired for the specific goal of inventing something for the employer, and/or has a contract that says otherwise, the employee generally owns any inventions or creative products made while employed with the company. Just being employed by the company is not enough to switch the presumption of ownership to the employer.
In copyright matters, the employer owns any “works made for hire” – works that were in the scope of the worker’s job duties. Trademarks are only owned by the entity that uses them to promote its business or service, so ownership normally resides with the employer.
Written contracts assigning employee IP rights
Most employers require that the employee sign what is called a Proprietary Information and Inventions Assignment (PIIA) which requires:
- That the employee agrees to transfer any IP rights that may mature during the working relationship.
- That the employee assigns to the employer any inventions created on the employee’s own time that are related to their day work – even when the creation occurred off of the company’s premises.
- That independent contractors also assign ownership to the employer in intellectual property created during work.
There are many ways to contest the validity of a PIIA:
- The employer may not have given proper consideration to the entirety of circumstances.
- The transfer may not have properly specified which property is to be assigned.
- The PIIA may not comply with Tennessee law
The employment contract should make clear that the employee assigns all interest in the IP to the employer. A strong contract is one which makes clear that the employment is conditioned on the employee waiving his/her rights to any inventions or intellectual property. Stronger still is an agreement that shows that the waiver was in return for some employment benefit, such as a bonus or stock option grant.
Employees who are required to sign a PIIA should seek the advice of a Tennessee employment lawyer before they sign the contract.
Assertion of IP rights when there is no contract
In the absence of a PIIA, there are ways an experienced employment lawyer can demonstrate that intellectual property was not created during the course of employment. One factor, for example, is that the employer did not give the employee any instructions or goals about the IP. Another factor is that the work was created after hours and away from the work location. A third factor is that that the work relationship was really an independent contractor relationship and not an employee relationship. In independent contract work relationships, it is generally presumed that the worker owns the patent or copyright, unless exceptions apply.
If you create something that is worthy of a patent, copyright, or other intellectual property protection, you have legal rights. Whether you signed a PIIA or not, the Tennessee employment lawyers at the Gilbert Firm may be able to show that you deserve ownership of the intellectual property. For information on your employee rights, please call us at 888.996.9731, or fill out our contact form to make an appointment with a member of our team. We have locations in Nashville, Chattanooga, Memphis, Jackson, and Knoxville.