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Intellectual Property Created in the Course of Employment

Anything that has been created through one or more persons’ creative or intellectual work may constitute intellectual property. This may be an artistic work, a work of fiction, artwork, an invention, symbol or design or a name or logo used for a business. The law which covers the protection of intellectual property includes copyright, trademarks and patents.

Intellectual property in the course of employment

Generally, if a company hires a person to create something, the owner of any intellectual property created in the course of that employment will be the employer. However, if an employee creates something while employed that is not something their employer employed them to create, the employer will not own the copyright.

What does “in the course of employment” mean?

When deciding if something was created in the course of employment, the following should be considered:

  1. How the duties of the employee are described in the contract of employment;
  2. Any duty statements that exist that record the duties of the employee in their role; and
  3. Was it the employer who gave the employee directions that directly corresponded to the creation of intellectual property?

If an employee uses their employer’s equipment to create intellectual property, it does not necessarily mean that the employer owns the copyright on the work created. However, the employee may be disciplined for misappropriating business equipment if such use contravenes their employment contract or a policy of the business that employs them.

Employment contract terms relating to intellectual property

Usually, employment contracts will contain terms that concern the ownership of intellectual property. These terms may include:

  1. A term declaring that intellectual property that the employee creates during employment or that relates to a specific subject area is the property of the employer;
  2. That the employee will sign documents that the employer requests they sign that relates to the ownership of the copyright on anything that the employee creates during their employment. This obligation will often extend beyond the period when the employee is employed;
  3. That confidential information obtained during the course of the employment relationship will be kept confidential (including after the period when the employee is employed);
  4. That confidential information is to be interpreted broadly to include intellectual property created by the employee in the course of their employment, intellectual property created by other employees, other business information including business strategies and plans, customer lists and financial information;
  5. That the employee waives rights in the intellectual property they create in the course of employment, such as copyright; and
  6. A term that disallows an employee to complete for a certain period and in a particular geographical area after leaving the employer. These terms are sometimes called non-compete clauses or restraint of trade clauses. If they are defined too broadly, courts will not enforce them. However, where the clause is reasonable, it will be held to be valid and enforceable by courts.

If you are an employee entering into an employment contract, it is essential to check the agreement for these terms and understand your obligations before proceeding. If you are an employer engaging employees to create intellectual property, it is essential to consider whether the terms of employment in the contracts with these employees are sufficient.

Case law

The 2010 Federal Court decision of Courier Pete Pty Ltd v Metroll Queensland Pty Ltd considered intellectual property and whether it had been created in the course of employment. The ownership of the intellectual property was in dispute. The employer of Mr Collymore asserted that the intellectual property in modular water tanks was theirs as it was created in the course of his employment with them. However, Mr Collymore contended that the water tanks were something that he had created in his own time and that he was the true owner of the intellectual property in them. Mr Collymore was employed as a foreman by Metroll Queensland. Metroll Queensland manufactures and supplies building products made out of metal, including rainwater tanks, roofing and fencing. The court found that Mr Collymore’s contract did not require him to invent things, and his employment contract was very broad. Due to this, the court found that the modular water tanks were not created in the course of employment, and the intellectual property belonged to Mr Collymore and not his employer.

If you require legal advice or representation in any legal matter please contact Armstrong Legal. 

Kathryn Sampias

This article was written by Kathryn Sampias

Kathryn Sampias has a Bachelor of Laws, a Bachelor of Arts and a Graduate Diploma in Journalism. Kathryn was admitted to practice in 2005 and practised law for more than eight years, working both in private practice (mainly in defence litigation for professional indemnity disputes) and in the public service for the Australian Securities and Investments Commission (ASIC) in enforcement.

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