There aren’t many businesses out there that don’t have some form of intellectual property (IP) worth protecting. IP can take many different forms. These include patents, trademarks, trade secrets, copyrights and important intangible assets, such as domain names.
When it comes to patents, companies are that do a lot of R&D or that are technology-based probably are pretty good at protecting their inventions in the marketplace by filing patent applications, but what about protecting your inventions from your employees? Did you know that there is a presumption that where an employee makes an invention, the invention belongs to the employee and not the employer? This is the case except where the invention was arrived at in the ordinary course of duties that the employee was engaged to perform, or where there is an express agreement to the contrary.
Copyright arises automatically in respect of certain types of original works. The rights of the owner of the copyright include the sole right to produce or reproduce the work. Copyright works can be important to businesses, and can include such things as databases, drawings, written specifications and computer software. Generally, employers have ownership rights in employee generated copyright made in the course of employment, in the absence of any agreement to the contrary. While this is good, it’s easy to see that disputes can arise as to whether the copyright work was made by the employee in the course of his or her employment.
With respect to trade secrets and confidential information, Canadian courts have held that such information created in the course of an employee’s employment belongs to the employer, but how do you ensure that it remains confidential when the employee leaves his or her position of employment?
Companies should eliminate the risk of having to make legal arguments as to whether an invention or work was created in the course of employment, and should take steps to prevent employees from using the company’s IP for the benefit of future employers. This can be accomplished by including appropriate terms in the employment agreement.
There are a number of protections that can be inserted into the employment agreement. At a minimum, it should provide that ownership of inventions, works and related IP rests with the company and that the employee assigns any invention or work created by the employee, and all related IP, to the company. The employment agreement also should impose a duty on the employee to not use, and to keep confidential, both during and following the term of employment, all IP and confidential information of the employer.
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