Employees, Independent Contractors, and Your Intellectual Property: Who Owns Work Product?

Intellectual property is a vital component of the work done by employees and independent contractors, typically bringing significant value to a company. Companies may also need to transfer or license certain IP rights under agreements with customers or other third parties. In some cases, companies may even be entitled to use the inventions or other work product developed by its vendors, partners, or other third parties. Ultimately, it’s critical for companies to understand how to protect their interests in the inventions and work product that its employees and contractors create.

 In the United States, whether or not a company owns inventions or work product (or whether its owned by employees or contractors) really depends on the form of intellectual property protection available to the company and different written agreements the company may have in place. 

 There are several rights companies must consider in terms of work product, including patents, copyrights, and trademarks. Certain types of work product may be protected by more than one form of intellectual property right. Sometimes these rights even conflict.

Under US patent law, the individual inventor or inventors initially owns the patentable invention. This is true, even if the invention was conceived or reduced to practice in the course of employment. In order to obtain rights over the employee’s (or contractor’s) invention, the company must obtain a written assignment. And while obtaining a written assignment is ideal, without one, a company may still have some rights in equity or under the theory of an implied license.

 Under US copyright law, ownership of a copyrightable work initially vests in the person who created the work, unless the work meets the statutory definition of a “work made for hire.” Where the criteria of work made for hire is met, the company will automatically own the work, unless parties had a separate agreement. Meeting the strict definition of work made for hire can be difficult, and where the definition is not met, companies need to obtain a written assignment by the employee or contractor assigning such rights. Where the work is not a work made for hire, and no valid assignment exists, companies may acquire an implied license if certain facts exist (but shouldn’t rely on this).

Last, under US trademark law, ownership of a trademark depends on first use of a mark to identify products or services in commerce. If an employee merely conceives of a design or mark in the course or employment, the company owns the mark (but again, so long as the company is the first to use the mark to identify goods or services and the employee’s use of the mark is on behalf of or to benefit the company).

In most situations, there will be overlap between the multiple forms of IP protection when evaluating work product created by an employee or contractor. Companies need to be aware of the interplay between the default rules of ownership and always consider appropriate contractual provisions and written assignments to ensure that the company has rights to the work product for which it hired an employee or contractor to create.

Need help navigating your employment and contractor’s assignments and work made for hire clauses? We can help with that. Contact Saunders & Saunders intellectual property attorney Christina Saunders at christina@saunders-saunders.com.