Intellectual Property Waiver: Everything You Need to Know
An intellectual property waiver releases the rights of an individual or company's invention, idea, or work to another. 3 min read
An intellectual property waiver releases the rights of an individual or company's invention, idea, or work to another.
Intellectual Property Issues
It is very important to make sure that all of the intellectual property (IP) of your company is properly owned and protected. If your IP isn't well protected, it could make it harder for your business to succeed and could cause legal or financial problems down the road.
Problems with IP ownership are usually found when a business is bringing on new investors or is being acquired. Once things are that far along, it's too late for easy solutions, and the issues become costly. However, there are some simple steps that business owners can take to help their company avoid ownership issues.
Who Owns a Business's Intellectual Property?
First, you'll want to ask yourself, who owns my company's intellectual property? If you can't answer this question confidently, you'll want to look into the IP rights and regulations that have been set up for your company, if any exist.
A common misconception is that the creator of any work automatically owns it. The person or business that pays for the creation of or instructs workers to make a work does not automatically own the IP of that work either. Usually, the ownership of a work differs from its creator or builder.
The founding members of a company will usually form IP rights and regulations for their business as they are starting it. These types of rights include:
- Domain names
- Website creation
- Brand names
This kind of IP, that is formed by the founding owners of a company, is legally owned by those individuals and not the company itself. An incorporated company doesn't usually own any IP created by its owners.
Most companies own IP created by their employees if the IP is formed while its creator is employed by the company. Some companies will include a special provision in their employment contracts to make sure the company retains full ownership of the IP formed by their employees.
Independent contractors and consultants usually retain ownership of their IP by default, so a company would need to form and sign an agreement with the individual in order to gain ownership. If a consultant wants to hand over ownership of their IP, they'll need to sign a contract to do so.
When business owners are starting a company, they will frequently use third-party companies to help with the process. They might enlist the help of a web design or software development company to get the business up and running. In such cases, the third party business will retain ownership of its IP even if you paid for it. If you want to have ownership of the IP, you'll need both parties to sign an intellectual property waiver.
On top of the rights regarding intellectual property, there are also moral rights. These are rights that favor the creators of any work like:
- Independent contractors
Moral rights make it difficult for companies to do whatever they want to with IP even if the business owns it. Creators retain the moral rights surrounding IP even when the ownership of the IP is transferred to a business or another individual. Contracts can be formed and signed to transfer moral rights as well as ownership rights. If a company desires to use IP more freely, they might want to have a moral rights waiver signed along with a transfer of IP ownership.
The best time to transfer IP ownership with an intellectual property waiver is before the work is created, but it can be done anytime.
What Happens if My Company Doesn't Own Its Intellectual Property?
There can be major consequences if your company encounters issues with IP ownership. Sometimes it may cost you money, other times you could be stopped from being able to conduct business.
Common consequences of an IP ownership include:
- A business is required to pay for IP that it should have already owned, like when an angry independent contractor leaves and refuses to transfer ownership of IP unless the company pays them a large fee
- A business is sued for infringing on the IP of one of their consultants
- A business is not able to lay claim to IP in order to keep their competition from using it
- An original owner of a business leaves their first business and opens another using their IP from the first business for the second
If you need help with an intellectual property waiver, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.