As a business owner, you have what’s known as a “shop right” to anything developed or invented by one of your employees as part of their job. This means you own it and have the right to patent, trademark or copyright it without having to compensate them. Further, they don’t have the right to use or sell their creation without your permission.
These are pretty straightforward concepts in intellectual property (IP) law. Where things can get more complicated is if a person who created something for your company isn’t officially an employee.
Protecting your rights when you bring on independent contractors
These days, businesses are increasingly hiring independent contractors to work on special projects. This saves them money by not keeping someone on the payroll who may not be needed full time. It also helps them bring in someone highly qualified for a project who isn’t interested in a full-time job with one company.
If you do this, it’s crucial to include a “work made for hire” clause in the contract of anyone who does work for you outside of an employer-employee relationship. This clause needs to spell out that your company owns the rights to any work created by this independent contractor for you – whether it’s a new product, a software program or a recipe.
There are a couple of things to be cautious about. First, employees are often misclassified as independent contractors – intentionally or not. It’s critical to be sure that anyone who works for your business is accurately classified under state law so that you have the right contracts in place for them.
Be careful with casual work relationships
Another way that businesses sometimes find themselves unprotected is if they hire someone informally to do work for them. It could be as simple as hiring an employee’s child who’s getting their art degree to come up with a new logo. Without the right “work for hire” protection, they could potentially sell that logo to another company, person or organization.
Protecting your patent, trademark and other IP rights isn’t a do-it-yourself endeavor. There are a lot of intricacies to the law. That’s one reason why it’s crucial to have experienced legal guidance when drafting, negotiating and enforcing your contracts when trying to avoid giving away your IP rights.
