Last updated: 
21 March 2016

You own intellectual property (IP) if you:

  • created it (and it meets the requirements for a patent, trade mark, design or plant breeder’s right)
  • bought IP rights from the creator or a previous owner.

You usually won’t own the IP for something you created as part of your work while you were employed by someone else.

IP can:

  • have more than one owner
  • belong to people or businesses
  • be sold or transferred
  • be licensed.

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.

IP created by employees

Many employees create IP in the course of their employment. This may 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.

But who owns the rights to these works?

In Australia, the employer owns the IP created by an employee if it is related to the employer’s business, unless the employment contract stipulates otherwise. Special rules may apply, however, to inventions made by university teachers or researchers as may be prescribed in the IP policy of the institution.

IP created by contractors

Contractors (including advisors and consultants) are often engaged to create a wide variety of new materials, including business plans, marketing plans, training manuals, information manuals, technical guides, software, websites, designs, drawings, research reports, databases and logos for an advertising campaign.

Both parties (hirer and contractor) should take care when entering into an agreement to adequately address the ownership of IP.

For example, if the contractor presents a number of distinct designs or logos, and the company accepts only one, then who owns the IP rights over the remaining options?

In Australia, the IP created by a contractor is by law considered the property of the contractor unless otherwise stated in the contract.

Quick tips to avoid IP ownership disputes

1. Create a contract before work starts

Make sure IP ownership is dealt with at the beginning before starting any collaboration. Even the earliest stages of work can create important IP rights.

The contract should include:

  • confidentiality clauses/agreements
  • non-compete clauses in employee contracts (employees today may become competitors tomorrow).

2. Create a written agreement

A written agreement that clearly states who owns the IP rights to any material created by an employee or contractor will reduce unnecessary confusion.

The agreement should include:

  • whether, and when, transfer of ownership will take place
  • who has the right to exploit it
  • who is to pay for it
  • whether improvements or modifications are allowed.

3. Take care outsourcing research & development

Research and development (R&D) is sometimes outsourced or undertaken by people other than employees. To prevent misunderstandings, make sure everyone involved signs an agreement to give sufficient rights to the results of their works.

The agreement should include:

  • transfers of any and all rights to the results of the project from the R&D team, including the right to retransfer the rights
  • rights to alter the works if the R&D project produces works or other materials eligible for copyright protection
  • provisions on the rights to know-how, copyright for the research reports and results, and rights over the physical material involved in research activities, such as micro-organisms or other biological material, as well as IP rights over any background information which is not within the public domain
  • a confidentially clause.

4. Create a policy for employees

Policies and regulations on IP for employees should contain provisions on:

  • the categories of inventions that fall in the field of the employer’s business
  • the employee’s obligation to notify the employer of inventions
  • the employer’s procedures for handling such notifications
  • confidentiality requirements and patent prosecution
  • remuneration for the inventor.

5. Seek legal advice

It is essential to get the right advice about IP before entering into any agreement with employees or contractors.

Crown use

Crown use is a provision under law that permits the government use of IP rights without the permission of a right’s owner.

It allows certain government bodies, and others authorised by government, to use a patented invention or registered design in the national interest.

There are several situations in which government might wish to acquire a patent quickly; for instance, in dealing with national emergencies such as a pandemic or for defence purposes.

It is also conceivable government might wish to acquire patents so as to provide open access to specific genetic materials or technologies that have been locked-up, but would benefit the country or aid in the administration of government services.

The invoking of this government right is extremely rare.

Your entitlements

Government does not need to obtain your permission before using your patent or design under crown use. This does not mean you cannot challenge the government’s use of your IP right. You can apply to the Federal Court of Australia or a state or territory Supreme Court.

Any use of a patent or a design by the government must comply with the Patents Act 1990 and the Designs Act 2003.

Under the crown use provisions, the government is obliged to:

  • inform you of its use of your patent or design as soon as possible after that use
  • supply information that you reasonably require, unless it considers this to be contrary to public interest
  • reimburse you for its use of your patent or design - not contingent on whether the government use is for profit.

The government also has the following rights:

  • to use your patent or a design without your permission for the services of the Australian Government or of a state or territory government
  • to sell products produced under the 'Crown use' provisions in some situations.