Intellectual property clause

An intellectual property clause is particularly useful where, for example, employees design software programs, perform development work in laboratories, invent things or write articles, books, plays, etc. However, you are unlikely to need an intellectual property clause for all your staff.

Belongs to the company

Our Intellectual Property Clause effectively restates the law on intellectual property rights. In most cases, whether there is a contractual clause or not, intellectual property rights generated by an employee as part of their normal job duties or as part of specifically assigned duties or in the course of their employment automatically belong to the employer. However, it is sensible for you to make this clear to employees by using our clause, plus our clause goes much further than just being a statement of ownership. It provides that the employee has a duty to further your business, which will hopefully result in more rights being caught. Moral rights exist in copyright works such as specifications and diagrams. Our clause waives such rights (as they can’t be assigned), meaning that you do not have to state the employee is the author. Our clause also ensures that the employee promptly discloses all intellectual property rights which they create or conceive and which may be of benefit to the company or which relate to (or are reasonably capable of being used in) the business of the company and that they co-operate in the execution of any documents necessary to ensure your ownership - this latter provision is useful where ownership doesn’t automatically vest in the business so needs to be assigned, or where there is doubt about ownership. We’ve excluded from disclosure, and thus from company ownership, only those intellectual property rights which are created by the employee outside their working hours, are completely unconnected with either their normal job duties or with special job duties specifically assigned to them and don’t relate to (or aren’t reasonably capable of being used in) the business of the company. Our clause additionally prohibits the employee from exploiting or disclosing to third parties any of your intellectual property rights unless they’ve been authorised to do so.

Power of attorney

Finally, there’s an optional provision in our clause appointing the company as the employee’s power of attorney, to take action in their name and to execute documents on their behalf for the purposes of giving effect to the clause. The benefit of this is that you then have the power to sign documents, etc. on the employee’s behalf to assign intellectual property rights to the business. However, where an employment contract includes a power of attorney provision, it must by law be executed as a deed by the parties. This means a simple signature at the end isn’t enough. Instead, you’ll need to ensure it complies with the provisions on deeds, including that it must be clear on the face of the document that it’s intended to be a deed and it must be validly executed as a deed. This includes the parties each signing in the presence of a witness who then attests their signature. So, we’ve made this provision optional so you can consider whether you want to turn the employment contract into a deed. If you don’t execute it as a deed, the power of attorney provision won’t be effective, but it won’t affect any of the other contractual provisions.