Who owns intellectual property?

The owner of intellectual property (IP) isn't always the person who created the idea. Check you're the rightful owner before applying for IP rights or taking legal action.

IP ownership basics

Usually, you're the entitled owner of IP if you:

  • created it, or
  • purchased the IP rights from the creator or previous owner.

IP can have more than one owner and can belong to businesses, organisations or individuals. If two or more parties have created the idea together, they are joint owners.

It's important to note you can sell, transfer and license IP ownership.

IP created by employees

Employees often create IP as part of their work. For example, a piece of software or a new product design.

In Australia, employers own the IP their employees create in relation to the business. Exceptions to this rule must be in the employment contract to be legally binding. For university teachers and researchers, these rules may be in the institution's IP policy.

IP created by contractors

Contractors are often hired to create a wide variety of new materials, including valuable IP. For example, websites, designs, drawings, databases and logos.

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

How to avoid ownership disputes

Create a contract before work starts

Your employees, contractors, subcontractors or freelancers should sign a written contract before you start working with them. It should clearly define:

  • who owns the IP created by the employee/contractor
  • who has the right to use the IP commercially
  • if, and when, transfer of IP ownership will take place
  • if any party can improve or modify the IP, and if this will impact ownership
  • confidentiality agreements
  • obligations to return copies of IP if or when work ends
  • non-competition agreements (as employees today could become competitors tomorrow). 

Develop an employee policy

Employee policies should support the employment contract. They should clearly define the behaviours expected of an employee, and relate to:

  • sharing of information
  • storage of information (physical, on computers and online)
  • IT security policies (e.g. passwords and software use).

Use technological or physical security

Support your business' policies with technological and/or physical security. This could include the use of safes or locked storage, secure networks, restricted access and encryption of IP.

Get legal advice

It's important to seek the right professional advice before you enter into agreements with employees or contractors.

Government use of your IP

In rare cases, the Government may need to use your IP. Under the 'Crown use' provisions in the Patents Act 1990 and Designs Act 2003, the Australian Government and state or territory governments can:

  • use your patent or design right without permission
  • sell products produced under the 'Crown use' provisions.

Invoking crown use is very rare however, it may be used in national emergencies or for defence purposes.

If the Government exercises this power, they must:

  • negotiate with you in good faith before exercising the power (except in an emergency)
  • inform you of the use of your IP as soon as possible
  • supply information you reasonably require, unless contrary to public interest
  • reimburse you fairly for the use of your IP.

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