Understanding Ownership of Intellectual Property

When an employee sits down to work at their company computer during the workday, it’s generally understood that their efforts and output fall under the company’s umbrella of legal ownership. However, what happens when the same employee is working off-hours, from home or on their personal computer? Do the same rules apply? How is the ownership of intellectual property (IP) determined?

There are numerous questions like these that human resources (HR) professionals need to understand as they work to protect the company, its employees and themselves. The rules and regulations surrounding content or work ownership are commonly referred to as intellectual property laws. Because navigating IP is a considerable undertaking that involves valuable company assets, it is vital for HR professionals to have at least a foundational understanding of intellectual property law.

Below, we will go through common IP questions that can help HR professionals begin or continue to grow their IP knowledge set.

A great employee can often make breakthroughs in his/her work and develop new and exciting ideas. These ideas can impact the company’s bottom line significantly and earn the employee an increased status within the company. However, what if that employee decides to seek new opportunities elsewhere and leaves the company? Those great breakthroughs they made—who owns them, the employee or the company? Are there protected employee intellectual property rights? Can that person use what they learned in their next position?

The answer to all these questions is: it depends. Determining if an employee or company owns certain intellectual property relies on a few variables.

The nature of the person’s work with the company

The reason a person was hired by the company plays a role in whether their output within—and outside of—the job falls under their employer’s IP. Employees hired to create or invent are typically the ones whose work IP would default to the company, as it’s the primary reason they were hired, with a mutual understanding that they would be creating on the company’s behalf.¹

The type of employment agreement

Not surprisingly, the fine print of the employee’s employment agreement that he/she signed when accepting the position can determine much of what is considered the company’s intellectual property versus what is theirs. It’s important to be familiar with the varying types of employment agreements, as they can greatly differ depending on the company and role of the employee. Some are simple non-competes that regulate an employee’s ability to share information with, or work for, competitors, while others have become increasingly strict, declaring ownership of all relevant intellectual pursuits during and after the time of employment.²

The place and time of the person’s work

Where an employee was during their breakthrough as well as what equipment or devices they used to facilitate its development play a role in determining ownership of the IP. If it was outside of work hours on a company device or if it was during work hours on a personal device, the IP could fall to the company. However, these rules vary depending on the job, company and nature of employment.³

Today, there are more opportunities and avenues to create than ever before through technology and digital mediums (YouTube, self publishing, etc.). As companies compete to stay relevant within these spaces, intellectual property rules and laws will continue to evolve.

For HR professionals, it’s critical to stay on top of these changes. Understanding the overarching rules of IP as well as the companies’ individual agreements will help protect everyone involved.

Learn more from Tulane University Law School associate professor Elizabeth Townsend-Gard on intellectual property and then check out Tulane’s online Master of Jurisprudence in Labor & Employment Law (MJ-LEL).