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The intellectual property (IP) of your business is an extremely valuable asset, sitting at the heart of the business’s purpose. Your IP is worth protecting and it is important that you get early advice to do so. Active Law can assist you to protect your IP, whether you are setting up a framework for a new business or enforcing your existing IP rights.
Bringing new people into your enterprise brings IP challenges and risks that need to be proactively managed. Even the way you promote your business and release information can pose a risk to the security of your IP.
Active Law has extensive experience advising clients about IP matters across a range of industries. Our team also have the benefit of practical experience in project management, giving them the ability to comprehend varying circumstances quickly and link the practical considerations to the legal issues.
What is Intellectual Property?
You own IP if you:
- created it; or
- bought IP rights from the creator or a previous owner.
IP could be a piece of software, an article, a script, an architect’s plans or drawings, a new logo, a new product or process, a product’s packaging, a new product design, a business plan or an invention. IP can:
- have more than one owner;
- belong to people or businesses;
- be sold or transferred; and
- be licensed.
IP created by employees
Businesses often rely on employees and independent consultants to develop their ideas and assume that they automatically own the IP rights. This, however, is not always the case.
Generally, in Australia, an employer owns the IP created by their employees if it is related to the employer’s business, unless the employment contract stipulates otherwise. Ensuring your employment contracts are professionally drafted to protect your IP is essential.
IP created by contractors
Contractors (including advisors and consultants) are often engaged to create a wide variety of new materials, such as business plans, marketing plans, training manuals, information manuals, technical guides, software, websites, designs, drawings, research reports, databases and logos for an advertising campaign.
In Australia, the IP created by a contractor is by law considered the property of the contractor unless otherwise stated in the contract. Business owners and contractors should ensure that they document who will retain ownership of IP before entering into a service agreement.
Avoiding IP ownership disputes
- Create a contract before work starts – make sure IP ownership is dealt with at the beginning of the relationship, before starting any collaboration. Even the earliest stages of work can create important IP rights. A properly drafted contract with confidentiality and non-compete clauses that clearly states who owns the IP rights to any material created by an employee or contractor will reduce unnecessary confusion and reduce the chance of later disputes.
- Take care outsourcing research & development – R&D is sometimes outsourced or undertaken by people other than employees. To prevent misunderstandings, make sure anyone involved in R&D external to your business, signs an agreement to ensure your business retains the rights to the results of their work.
- Create a policy for employees – You should have policies for employees of your business that reflect the terms of your employment contract and establish:
- the types of IP that could arise in the course of your business;
- the employee’s obligation to notify you of relevant IP they develop whilst employed by you;
- how you will handle such notifications;
- the confidentiality requirements surrounding IP development;
- how and when IP rights will be enforced; and
- if there will be additional remuneration for the IP creator.
- Seek legal advice – It is essential to get the right advice about IP before entering into any agreement with employees, contractors or third parties.
Applying for an IP right to protect your business ideas can be critical to building a business and establishing your presence in a market; as is ensuring your ownership rights are clear in contracts with employees and contractors; and then enforcing those rights. Early advice will assist you to protect this valuable business asset.