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Ensuring Your San Diego Business Owns Any Employee-Created IP
Intellectual property (“IP”) is commercially valuable to all San Diego businesses. IP includes assets like trade secrets, copyrights, and inventions and, under proper circumstances, legally protectable IP can include items like customer lists and business methods. When it comes to IP created by your employees, it is important to have contracts in place ensuring that any employee-created IP is deemed the property of and is owned by your business. You will need a good San Diego corporate attorney to help.
San Diego Corporate Law: The Importance of a Written Agreement
It is important to have ALL mid-level and managerial employees sign an agreement with respect to any IP that they create even if you do not expect them to create IP. This is important because IP can be created inadvertently by a slow process of evolving process and procedure. As a hypothetical, imagine an executive assistant whose job duties involve file management and record keeping. Assume that he or she is particularly creative and comes up with an innovative method of filing and recording retrieval which is efficient and enhances productivity. Methods of filing and record retrieval may not seem like IP, but they are. You want to make sure that any new innovative business methods are owned by the business.
As another example, if you have employees working on social media marketing, you want to make sure the company owns the copyright to any slogans or advertising copy. The same is true for any employee’s new application of old methods, technologies, and/or products.
San Diego Corporate Law: What Should be in the Written Agreement
The written agreement does not have to be complicated as long as the agreement contains language something like this:
“Intellectual Property. The COMPANY shall be the sole owner of all intellectual property created by EMPLOYEE (solely or jointly with others) during EMPLOYEE’S employment, including, but not limited to, any inventions, all materials, ideas, concepts, formats, suggestions, developments, arrangements, methods, packages, programs and other intellectual properties that the Executive may develop, create, obtain or acquire in connection with and during the EMPLOYEE’S employment.”
It is also important that the employee agree that the agreement itself is an assignment to the his/her employer of any right to the IP or that the employee agree, at reasonable intervals, to sign assignments or other ownership instruments that evidence, protect, and enforce your business’s ownership of the employee-created IP. Further, the employee should agree to not attempt to claim ownership of an IP through registrations or filings (like an attempted trademark registration).
In California, an employer cannot claim ownership of IP invention that an employee develops entirely during his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information. There are two exceptions:
- Where the invention/IP relates at the time of conception or reduction to practice to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or
- Where the invention/IP results from any work performed by the employee for the employer.
See Cal. Labor Code, § 2870. California Labor Code § 2872 requires a written reference to § 2870. Thus, something must be added like “this Agreement does not apply to IP which qualifies under the provision of California Labor Code Section 2870.”
Contact San Diego Corporate Law Today
For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can assist in drafting any agreement needed for biotech companies, assignments, employment contacts and any other contract your business might need. Mr. Leonard has been named a “Rising Star” three years running by SuperLawyers.com and “Best of the Bar” by the San Diego Business Journal. Mr. Leonard can be reached at (858) 483-9200 or via email.
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