It is common knowledge a business’s most valuable asset is the people who work for the organization. For the average person or new business owner, the second most valuable asset is something less obvious. It is not capital. It is not real property or fixed assets. Rather, it is something intimately linked with the human piece. The second most valuable asset to any organization is the intellectual property components.
Intellectual property, in a very general way, refers to creations of the mind. More specifically, I am talking about creations subject to copyright protection, trademarks associated with the business that inform the rest of the world by way of your logo/brand, patents that might be proprietary or trade secrets that make your business function in a superior way to others. All of the foregoing take the employees to dream them up and to make them a reality. But, it is how the business uses them that actually breathes life into these creations of the mind. It is also the business who has the means and capabilities of making these creations of the mind profitable.
Where would Coca-Cola® be without the distinctive taste that is subject to trade secret protection? What about the silver peace symbol used as a trademark that indicates German luxury from Mercedes? Let’s not forget about the distinctive font used to symbolize pixie dust, dreams and wishes all started with Mickey Mouse.
The phrases copyright, trademark, patent and trade secrets are not interchangeable terms. Nothing breaks this intellectual property attorney’s heart more than to hear these terms used interchangeably. They are not synonymous. Legally, each provides a different set of protections. Each term might be more, or less, applicable given a certain business model and situation. Over the next few weeks, I am going to delve more into each subset of the broad category of intellectual property and provide some tools about how you can start the conversation within your organization.
The people create the products, but how can you be sure that when the people take other job positions that they do not take your intellectual property with them? The first step starts with your employee handbook. Does it specifically have a section that speaks to non-physical property and ownership rights in that intellectual property? Does it detail out and give examples as to what is considered intellectual property by the business? Does it make a distinction between merely confidential information and work product that would be subject to intellectual property protection?
These are all questions you would want to consult with and ask your corporate counsel. Be sure your corporate counsel has experience with intellectual property issues. You can probably find, via a search on the internet, some paragraphs to plug into your employee handbook that claim to address intellectual property rights. But, remember – you get what you pay for.
Once you have your employee handbook shored up, what does your onboarding process look like for new employees? Are new employees made aware of the intellectual property clauses? Do they have to sign a form stating they received the handbook, understand the contents and agree to abide by the handbook? Does the human resources director take time to not only explain things like benefits, but also to specifically point out that section?
Let’s talk about your current employees. Does your organization offer routine training where you remind employees of general handbook policies, especially the intellectual property part? A great time to throw this reminder in would be when you routinely offer sensitivity training to remind your organization about non-discriminatory behavior.
The final piece about protecting your business’s intellectual property with current employees deals with their actual employment and in very lay terms, addresses the job the employee was hired to accomplish. Are the persons creating the intellectual property acting within the scope of their job and employment?
Look at an example: You own an automotive repair business. One of your technicians who is hired to perform routine oil changes develops a new product that makes changing oil filters infinitely easier for everyone in the automotive industry. The technician does so during working hours, but developing new processes is not part of his job or what he was hired to do.The employee receives a nice bonus because the business owner successfully secures a patent on the new process and are now the exclusive retailer of the product. The technician decides to take a job at a competing automotive repair business across town and is taking his product with him. Who owns the patent and the product?
Being a good lawyer, I could definitely argue both sides of this issue. In this particular example, I think there are slightly stronger arguments on behalf of the employee leading to the conclusion he owns the patent. The scenario showed the technician was working outside of the scope of his employment and was performing work in addition to his job description. While he was doing it during working hours, he was performing tasks not normally expected of someone in that role.
An argument in favor of the business owner is that they did reward the technician with a bonus for his work, thus compensating him for his time. But, all of this could have been settled before the technician decided to take another position by having a good employee handbook in place, making sure the employee knew his job duties and requirements and making sure he worked within the scope of his job.
You never know who will bring forth your company’s next great idea.To protect and sustain your business, be sure your employees know where those ideas, creations and work product will land once the employment relationship is changed. Take time to protect your second most valuable aspect.
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