When you create a tangible object – you can say “I made this, I own it, it’s mine.” But when you’re dealing with IP, it can be more challenging to protect your creative material – especially when other people are involved.
So what is IP?
IP or intellectual property is the property created by your mind or the practical application of a novel idea. It can be an invention, a process, a logo (trademark), a word (trademark), a phrase (trademark), a business/product name, a design, know-how, financial data, lyrics, musical composition, screenplay, book, graphics, computer programming, test results, trade secrets, proprietary knowledge – anything written or recorded in which copyright can exist.
The term IP is broad and at times nebulous, which is why it is so important to consider the implications of its ownership within a business context.
As a consultant or contractor, you need to be clear in how you deal with intellectual property from three perspectives.
- How you use the IP of others in performing your duties;
- How others (the organisations you are contracted to work for) use your IP; and
- How the IP is shared and with whom (confidentiality).
As a general rule, if a consultant or contractor creates intellectual property in the course of their engagement by an organisation, the organisation paying for the service is taken to own the IP.
For example, Kate engages a graphic designer to create 6 Facebook ads. The designer takes instruction/input from Kate and creates the digital content. Kate pays for the work and owns the IP.
But it doesn’t always work that way. Consider this scenario.
What if the graphic designer has some magical software that creates the Facebook ads dynamically, offering Kate 25 different versions? The ads themselves are not static but a result of the software. In this case, Kate is still getting the ads she wants but the designer owns the IP for the software/system. Kate can’t own the ads because they require the IP of the designer.
When you work for or with others, the arrangement needs to be clear (document it!) so that both parties understand who owns the IP and what constitutes the IP.
Now let’s say Kate decides she loves the magical software… it’s worked fabulously and she wants to take it to the world. In this case, the designer may grant Kate a licence to use the IP. Kate gets to use it but must pay a fee for the privilege and the ownership remains with the designer. IP licensing arrangements like this are a popular way to leverage IP.
What if an employee creates IP?
Most employers would probably say that if an employee creates something during work hours then the employer owns it. But this may not necessarily be so. A recent case highlights the necessity to state how IP is dealt with in an employee’s contract. You can read all about it here.
Your IP is valuable
If you are a consultant or contractor that regularly deals with IP then you need to be proactive about protecting your creative darlings because it’s valuable. Just think of all the time, money and hard work you’ve spent to accumulate your knowledge and build your expertise and systems.
If you don’t value it and put rules in place to preserve your IP assets then you can bet that sooner or later you will come across someone who is ethically challenged and your livelihood may be put at risk.
Our next article will examine how you can do protect your IP with greater confidence.