The waiver of intellectual property rights is a hot topic in today's tech-dependent world. Companies are beginning to rely on their employees to help develop, invent, or design new business assets that the company can profit from or use in their day-to-day function. When this occurs, an employer may find themselves caught up in a court battle over who has ownership of this intellectual property. This often occurs when they fail to have employees sign a waiver of intellectual property rights. 

In an employer/employee relationship, if the company wishes to use any creative work from an employee, it will be required to have the employee sign a release of rights to the intellectual property in order for the company to protect itself. This is necessary even though a creative work product that is produced during the employee's normal employment parameters is typically covered under employment laws. To prevent a legal battle, it is best to obtain a waiver. The waiver should address such issues as:

The waiver of intellectual property rights will ultimately release the rights of ownership and act as a bill of sale to the employer. 

What is Intellectual Property? 

Intellectual property is defined as an asset that is developed from the human mind. While the original work is technically intangible, it can be described in a written manner and converted in the end to a tangible form. Since intellectual property comes from mental processes, it is often considered the property of the creator by default. This right to ownership of intellectual material is protected by law, and acquiring ownership rights is essential if a company plans to benefit from the property.

It is important for all businesses who employ workers that create artistic work to understand intellectual property laws. Some of the creative work that is most commonly associated with intellectual property include:

  • Creating business processes
  • Writing
  • Creating music
  • Designing software applications

Even though the employee works for you, you will most likely need them to sign a release of rights to the intellectual property in order to have proper ownership of all the copyrights, trademarks, and patents involved in their work.

The Growth of Intellectual Property Law 

Intellectual property laws are not a new issue for businesses. Employees have signed over intellectual property rights for everything from music to inventions for years. The reason that the area of intellectual property law has seen a recent upsurge is due to the broader language that is included in the legal definition of intellectual property which used to only include music, words, and design. 

In today's business world, the legal term Intellectual Property, or IP, includes a much broader range of  areas including such things as:

  • Software applications
  • Business methodologies
  • Industrial and manufacturing processes

For example, if an employee was to design a new manufacturing process, such Henry Ford did when he developed the assembly line, a release of the intellectual property rights to the idea and design would be required for the company to be able to profit from the new process. Without a proper work-for-hire contract or transfer of intellectual property rights, an employee could demand a company to cease using the design.

Work-for-hire was established under the Copyright Act of 1976, where businesses could consider the intellectual property the employee created as part of the scope of their employment and obtain ownership rights to it.

Therefore, if your employer/employee situation is work-for-hire, the employer would automatically retain the rights to the intellectual property that is produced in the scope of the employee's job. Unfortunately, it is hard to prove the work-for-hire relationship when it comes to a legal case, so it is often recommended that you secure a waiver of intellectual property rights that will specifically establish the employer/employee agreement and who owns the rights to the property that is produced as a result of the relationship.

Intellectual Property Release Form 

The best way to ensure that you own the proper rights to intellectual property from your employee is to have them fill out an Intellectual Property Release Form which is a document assigning the rights to their created property to someone else. This form is traditionally used for artists that will allow their property to be used for a different purpose and do not wish to retain the rights to the intellectual property.

Once a person or company obtains rights to the person's work they will be able to:

  • Copy it
  • Distribute it
  • Publish it

If you need help with drafting a waiver of intellectual property rights, 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, Stripe, and Twilio.