Key Takeaways

  • A strong company intellectual property policy defines ownership, usage rights, commercialization, and enforcement of IP assets within an organization.
  • Clear ownership rules protect both the company and employees and help prevent disputes over innovations and creations.
  • Policies should address confidentiality, licensing, commercialization, and enforcement strategies to maximize the value of intellectual property.
  • Training employees and implementing internal disclosure and registration procedures are key to safeguarding company IP and trade secrets.
  • Well-managed IP policies enhance competitiveness, attract investors, and increase company valuation.

Corporate intellectual property policy refers to a corporation's approach regarding trademark, copyright, trade secrets, patents, and other intangible rights for many services and products. The intellectual capital found in creative content and inventions in today's economy is as crucial to economic growth as traditional goods, services, and capital are. Intellectual property provides returns and incentives on investments for intellectual capital in order to produce new creations and innovations. These individual companies, natural economies, and industry sectors are then made more competitive.

What Is Intellectual Property?

Intellectual property refers to an intangible product of the mind, i.e., a work or invention that is a result of creativity, for which one can apply for protection in the form of a patent, copyright, trademark, etc.

The word “copyright” is defined as a bundle of rights that keep original works of authorship protected, either currently or when they're developed later. It prevents the copyrighted article from being reproduced by someone else. Works of authorship include the following:

  • Musical works
  • Dramatic works
  • Sculptural works
  • Choreographic works
  • Sound recordings
  • Architectural works

A "patent" protects a discovery or invention that includes a new process, manufacture, machine, composition, or any improvement that's useful. Programs that are considered to be a new and useful process can be considered for patent protection. Programs that have a minimal amount of original expression may also be suitable for copyright protection. A patent lasts for 20 years from the day it was originally filed. The protection begins when the Patent & Trademark Office actually issues the patent.

Copyrights for articles that were created and published after the date of January 1, 1978, last for the lifetime of the author plus an additional 70 years. Before this date, the duration of a copyright was 75 years. In 1998, this was increased to 95 years. Copyright protection is different from patent protection since it starts as soon as it's put on paper. Registration is voluntary. Copyright begins when a work is created, and there is no need to register a copyright unless you wish to bring a lawsuit for infringement of a U.S. work.  

Importance of a Company Intellectual Property Policy

A formal company intellectual property policy is more than a legal document — it is a strategic asset. Intellectual property (IP) often represents a company’s most valuable holdings, especially in innovation-driven industries like technology, pharmaceuticals, and design. A comprehensive policy outlines how IP is identified, protected, managed, and exploited, providing clarity to employees, partners, and investors alike.

A well-designed IP policy can:

  • Encourage innovation: By setting clear procedures for disclosure and protection, companies motivate employees to develop new ideas without fear of misappropriation.
  • Protect trade secrets and competitive advantage: Policies should establish protocols for classifying and safeguarding proprietary information, including non-disclosure requirements and secure handling practices.
  • Enhance commercialization potential: Clear frameworks for licensing, assignments, and partnerships allow businesses to monetize IP assets effectively.
  • Reduce legal risks: Defined ownership and enforcement strategies prevent disputes and strengthen the company’s position in litigation or negotiations.

Ultimately, integrating IP strategy into the broader business plan helps companies remain competitive and protect their innovations as they grow.

Who Owns the Intellectual Property?

The American Association of University Professors has a policy called "Statement on Copyright," but it hasn't officially answered questions on patents. This statement assumes that anyone who creates intellectual property owns it. This assumption also applies to the patent area. 

However, it is stated that any intellectual property that's made, created, or originated by a member of the faculty will be the exclusive and sole property of the author, inventor, or faculty member. They can choose to voluntarily transfer the property in part or full. Certain works may be regarded as "made for hire," considered "joint works," or are negotiated contractual transfers.

Employee Inventions and Assignment Agreements

Ownership of intellectual property created by employees is a frequent source of conflict without a clearly defined policy. Most companies assert ownership over any IP developed by employees within the scope of their employment or using company resources. However, gray areas can arise, such as when inventions are created off-hours but relate to the company’s business.

To address this, companies should include invention assignment agreements as part of employment contracts. These agreements typically specify that:

  • Any invention created during employment that relates to the company’s business or results from using company resources automatically belongs to the company.
  • Employees must promptly disclose all potentially patentable inventions or creative works to the company’s IP team or legal department.
  • Certain exceptions (such as inventions created entirely outside the scope of employment without company resources) remain the employee’s property, as defined by applicable state law.

Some states, like California, require specific language in employment agreements to notify employees of these rights. Clearly defining ownership at the outset minimizes disputes and strengthens the company’s claim to valuable IP assets.

Who May Use the Intellectual Property?

An institutional policy or collective bargaining agreement can allow institutions to use the works that faculty members have created without charge for administrative and educational purposes within the institution. Faculty members are encouraged to have these uses in their agreements when they transfer copyrights for their works to a publisher. These uses let the institution operate more effectively and efficiently for the purpose of agreeing with requests from accreditation agencies and do not infringe on any faculty rights.

Material that is formed for regular teaching use in department programs and the classroom, such as assignments, tests, and syllabi, should be the property of the original faculty author. However, institutions should be allowed to use this material for internal educational, instructional, and administrative purposes. This includes meeting the requests of accreditation agencies for course descriptions and faculty-authored syllabi. Faculty authors should look to provide rights in an agreement that transfers copyright to a publisher.

Licensing, Collaboration, and External Use Policies

Once a company secures rights to its intellectual property, it must carefully control how those assets are shared or licensed to third parties. A strong company IP policy should outline procedures for:

  • Internal usage: Defining who within the organization can use, modify, or distribute IP assets ensures consistent and compliant handling.
  • External licensing: Establishing guidelines for granting licenses — including scope, duration, territory, and royalty structures — prevents unintentional loss of control and ensures proper monetization.
  • Joint development: Collaborative projects with partners or contractors should include clear terms on ownership of jointly developed IP, background IP usage, and future commercialization rights.
  • Open source considerations: For companies developing software, policies must clarify whether and how open-source components can be used or contributed to, as misuse can jeopardize proprietary rights.

Proactive licensing policies allow businesses to generate revenue streams, enter new markets, and form strategic partnerships without compromising their IP ownership.

Distribution of Any Funds Generated

Any funds that faculty members receive from selling intellectual property that's owned by a faculty inventor or author should be given out and expended as determined by the faculty inventor or author. Funds that the university or college receives from selling intellectual property owned by the university or college should be allocated and expended based on the college's discretion.

If there is more than one creator, all the creators will decide the allocation of their individual shares when the work was first started. The American Association of University Professors (AAUP) states that that formation of the Intellectual Property Committee serves a helpful purpose in non-collective and collective bargaining environments.

Enforcement, Monitoring, and Dispute Resolution

Protecting company intellectual property doesn’t end with registration or commercialization — it requires ongoing enforcement. A corporate IP policy should establish mechanisms for detecting and addressing unauthorized use. Key components include:

  • Monitoring and audits: Regular reviews of the market and competitors help detect infringement or misuse of trademarks, patents, or copyrighted materials.
  • Cease-and-desist and litigation strategies: The policy should outline escalation steps, from sending notices to pursuing legal action when necessary.
  • Alternative dispute resolution (ADR): Mediation or arbitration clauses can offer cost-effective ways to resolve IP disputes without lengthy litigation.
  • Customs and trade enforcement: For companies with global operations, working with customs authorities to block counterfeit goods can safeguard brand integrity and revenue.

A structured enforcement approach not only protects revenue but also signals to investors, partners, and competitors that the company takes its intellectual property rights seriously.

Frequently Asked Questions

  1. Why is a company intellectual property policy important?
    It helps define ownership, usage, and commercialization of IP, protects company assets, and reduces the risk of disputes or infringement.
  2. Who typically owns intellectual property created by employees?
    In most cases, the company owns IP created by employees within the scope of employment or using company resources, provided this is clearly stated in employment agreements.
  3. What should be included in a company IP policy?
    Key elements include ownership definitions, disclosure requirements, usage and licensing terms, enforcement procedures, and revenue distribution guidelines.
  4. How can a company enforce its intellectual property rights?
    Enforcement strategies include monitoring for infringement, issuing cease-and-desist letters, initiating legal action, and leveraging customs enforcement for counterfeit goods.
  5. Can employees keep rights to inventions created outside of work?
    Yes, if the invention is created entirely outside the scope of employment and without company resources, employees may retain ownership, depending on state laws and contractual terms.

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