“Understanding Intellectual Property Rights in the Workplace – Who owns the IP Rights?”

Introduction:

In today's fast-paced and innovative work environment, employees are often encouraged to think creatively and develop new ideas and creations. Digitalization is changing the world and driving innovation at an incredible pace. Technologies and concepts such as artificial intelligence, machine learning, blockchain and predictive technology have truly transformed every aspect of our personal and work lives. However, when an employee creates something new and innovative while working for a company, the question arises: who owns the intellectual property (IP) rights to the creation? The employee who made it or the employer/company?

The General Rule:

In general, we can say that the employer owns the IP rights to creations made by employees during the course of their employment. This is because the employer has hired the employee to perform specific tasks and duties, and the creation of new ideas and innovations is often seen as part of the employee's job responsibilities.

Exceptions to this rule:

However, there are some exceptions to this rule. For example, if the employee has a separate agreement with the employer that specifies ownership of IP rights, or if the creation was made outside of work hours and without the use of company resources, the employee may retain ownership of the IP rights.

Moral Rights:

In all cases, as a basic rule, moral rights shall always be reserved to the author, as they cannot be assigned to other third parties.

Types of Employment Contracts:

The type of employment contract an employee has can also affect ownership of IP rights. For example:

(1) Employment Agreements: These contracts typically specify the terms and conditions of employment, including ownership of IP rights.

(2) Non-Disclosure Agreements: These contracts require employees to keep confidential any information or ideas they develop while working for the company.

(3) Assignment Agreements: These contracts require employees to assign ownership of any IP rights they develop while working for the company to the employer.

UAE Law and Practice:

Federal Decree-Law No. 38 of 2021 on Copyright and Neighbouring Rights

Article (28) 

Author's Economic Rights in His Relationship with Third Parties 

Unless otherwise agreed in writing, Author's economic rights in his relationship with third parties shall be as follows: 

1. If an Author creates a Work for the benefit of another person, the copyright belongs to the person in whose favour it was made. 

2. If an employee or worker, during his employment, creates a Work related to the activities or business of the employer that is directly or indirectly mandated or instructed by the employer, or uses to reach the creation of such Work the experience, information, tools, machines, or materials of the employer placed at his disposal, the Author’s economic rights shall be for the employer, taking into account the intellectual effort of the worker.

3. If an employee or worker creates a Work that is not related to the employer's business and does not use the employer’s experience, information, tools or raw materials to reach this Innovation, the Author's economic rights shall attribute to the employee or worker.

Detailed Explanation of the above Article:

(1) An author or creator may enter into a contract with some independent party for the purpose of preparing a work for this third party. For example, the Ministry of Environment may commission a competent person inside or outside the country to prepare a work concerning the issue of Climate Change. In this case, such relation will be subject to the agreed contractual bond, including all details and terms of the work's utilization and financial rights. However, if the agreed contract does not include those details specifically, then all financial rights shall be granted to the work's author who shall be entitled to use his work however he may want, whether it is through the work's publication or presentation in any form.

(2) On the other hand, if the author/creator is employed by a government authority or some private employer that has commissioned him to prepare a work for his employer specifically (e.g. preparing a computer software), then, all rights shall be granted to those employers automatically. In addition, if an author/creator who is not assigned to prepare a work at his workplace, has used his employer's resources, tools and means to prepare his work, then, the employers shall be entitled to all rights as well (if they so desire).

(3) Nonetheless, if the author/creator has prepared his work without an assignment by his employer, and without the use of the employer's resources, tools and equipment, then, the creator shall be completely free to use his work without any rights for the employer.

Requirements for Some Patent Offices

Almost all patent offices around the world requires a Deed of Assignment from the inventor/creator of the invention to the Applicant in order to complete the requirements of the filing procedures. However, in some countries, like UAE, the applicant/company may submit a Certificate of Employment of a Copy of Employment Contract as an alternative to the DOA, if the inventor is the employee of that applicant company, since the invention of an employee is automatically transferred to the employer under UAE IP law.

Best Practices for Employers:

To avoid disputes over IP rights, employers should:

- Have Clear IP Policies: Develop clear policies and procedures for handling IP rights, including ownership and use of creations.

- Educate Employees: Educate employees on IP rights and their responsibilities regarding creations made during work hours.

- Review Contracts: Review employment contracts and agreements to ensure they include key provisions regarding IP rights.

Best Practices for Employees:

To protect their IP rights, employees should:

- Understand Employment Contracts: Understand their employment contracts and any agreements they have signed regarding IP rights.

- Keep Records: Keep records of their creations, including dates, times, and descriptions of work.

- Seek Advice: Seek advice from a lawyer or other experts if they have questions or concerns about IP rights.

Challenges:

Regardless of the existing laws and agreements, we still have some debatable, complicated challenges that need further clear-cut explanation in the near future, for example:

1- If the employee works remotely from home or elsewhere, how we can decide about the ownership of IP rights created by that employee?

2- If the created IP work is not related to the company business, then who owns the IP rights?

Conclusion:

Ownership of intellectual property works developed by employees while they are employed is the subject of disputes of many businesses in different regions. By understanding the general rule, types of employment contracts, and best practices for employers and employees, both parties can take steps to protect and manage IP rights effectively. To prevent misunderstandings, employers should include clear IP assignment clauses in employment agreements. This protects the company’s interests, defines employee responsibilities, and promotes transparency in the workplace.