Intellectual Property Ownership in the UK

Intellectual Property (IP) assets now play an increasingly important role in business. Therefore, it is important for parties working together to understand who has the right to any IP generated. Establishing who owns rights after IP is created can be complex and expensive, but the situation can be greatly simplified and conflicts may be avoided by forming agreements before IP is created.

In the UK, the laws regarding ownership of IP are different for each type of IP. This article considers ownership of patents, trade marks, and copyright.

Trade marks

There are no provisions in UK law which explicitly specify who owns a trade mark. However, as long as another has not already registered the trade mark, the owner is usually taken to be the person or business that first uses the trade mark.

Copyright

The author of a piece of work is usually the owner of any copyright in that work. However, if the work is made by an employee in the course of their employment, the employer will usually own the copyright.

The exception to this rule of law is where the employer and the employee have an agreement which specifies otherwise.

Designs

The law of ownership for designs is similar to copyright – an author is usually the owner of a design, unless the design was created by an employee in the course of employment, in which case the design belongs to the employer.

In addition, for commissioned designs created before 1st October 2014, in the absence of an agreement to the contrary, the commissioned design shall belong to the person commissioning the work.

Alternatively, for commissioned designs created on or after 1st October 2014, in the absence of an agreement to the contrary, the commissioned designs shall belong to the designer or, if relevant, to their employer. This change of law was introduced by the Intellectual Property Act, which came into force on 1st October 2014.

Patents

Similarly to copyright and designs, patent law specifies that the person who creates an invention shall primarily be entitled to own any patent granted for that invention. However, an employer shall be entitled to own any patent granted for that invention if the inventor is an employee and the invention was made:

• in the course of the normal duties of the employee where invention is a reasonably expected outcome of those duties;

• in the course of duties specifically assigned to the employee where invention is a reasonably expected outcome of those duties; or

• in the course of duties where the employee has a special obligation to further the interests of their employer, even where the employee is not specifically employed to invent.

There is nothing in UK patent law regarding situations where an invention results from commissioned work. Therefore, under UK law in the absence of an agreement to the contrary, the commissioned party would usually be considered as the owner of any patent granted for the invention.

UK patent law provides that an employee who developed an invention should be compensated where:

• a patent has been granted for an invention developed by the employee;

• the employer is entitled to own that patent; and

• the patent and/or the invention has been of “outstanding benefit” to the employer.

UK law does not contain any equivalent provisions for compensation to be awarded to employees where copyright or designs have been beneficial to an employer.

Difficulties in Establishing Ownership

Despite statute intended to define ownership of copyright, designs and patents in situations involving employers and employees, establishing ownership is often a complex procedure. For patents in particular, it can be difficult to establish whether or not an invention was developed in circumstances which mean that the employer is entitled to own a patent for that invention. As a result of such complexities it is hard to be certain what the outcome might be of legal action over IP ownership.

There are also situations which are not provided for by law. In particular, there are no clear provisions in the law which set out where ownership lies when a student has developed IP.

As an example, PhD students, undergraduate students and visiting researchers are not usually employees of the education institution where they are enrolled. However, access to materials and apparatus owned by the institution may have helped them develop IP. In addition, where external bodies fund the work of a student or researcher, in the absence of an agreement, it is unclear who owns an invention resulting from such work.

Therefore, the task of establishing ownership is often not a simple one.

Avoiding Ownership Issues with IP Agreements

Any ambiguity over ownership may increase the likelihood of a dispute, for example if the value of the IP increases. The above mentioned difficulties in establishing ownership can often be avoided by considering IP ownership before IP is created.

Fortunately, enforceable agreements can be put in place to reduce ambiguity. For example the rights to newly created IP can be cheaply and quickly ‘assigned’ to the new owner or owners. It is best to do this early while the employees are available to sign assignment documents. Employers sometimes add terms to contracts of employment regarding automatic assignment of IP rights; however these are not always enforceable.

Similarly, in cases where non-employees such as students or consultants are working on collaborative projects, assignments and contracts can be used to specify who should own any resulting IP.

If you would like advice regarding IP ownership or assignment of rights, please contact Tim Gilbert at [email protected]. Tim is based in the East Midlands, at our head office in Derby.

Disclaimer: This article summarises ownership law and therefore some details are omitted. A professional should always be consulted regarding complex IP issues, such as ownership.