We continue to provide our legal services through the COVID-19 lockdown. Please visit our COVID-19 Hub for legal insights, or contact us directly.
Get in Touch Menu

Check for intellectual property provisions in your employment contracts

01 August 2014

Although a business may create intellectual property (IP) during the course of its operations, in reality this IP is created by individuals.

This may be by commissioning a third party to produce the intellectual property rights for it, or through the efforts of its own employees. It is vital that a business is aware of the rights which such individuals have in relation to this IP and adequately deal with this issue in any proposed employment or consultancy agreement.


 Many types of IP rights created by an employee during the course of his employment will vest in the employer automatically without a need for a formal assignment to be signed by both parties. However, there are some exceptions to this general rule and employers should ensure that when drafting employment contracts an IP provision is included. For example, when registering domain names of a business, it is very common for an employee mistakenly to register the domain name in his own name rather than that of his employer. The owner of the domain name is then listed at the registry as being the employee and not the business.

Furthermore, where a business is very IP intensive and employees are engaged in research and development, it would be sensible to incorporate a more elaborate IP clause in their employment contracts. In particular, a business should take advice where patents are created by its employees, because certain statutory rights to compensation arise in favour of employees, if the patent created by them is of “outstanding benefit” to the business.


If the contract with a consultancy firm, or any other service provider, is silent in relation to ownership of the IP, the legal title will vest in the developer.  It does not matter if a business has paid for the developer to create the work. It is therefore crucial that any contract with a consultant, who is creating IP on behalf of the business, deals with the question of the ownership of any resulting intellectual property rights.


It is important to remember that any provisions dealing with an assignment of IP will only be valid if the agreement has actually been signed by the relevant individual. The business must always obtain the signatures of those involved.

We're here to help
Kym Fletcher LLB (Hons) Euro
Consultant, solicitor
View profile
Kym Fletcher
Related services
Share this article
Resources to help

Related articles

Corporate & commercial issues: COVID-19 FAQ


The global outbreak of coronavirus (COVID-19) and the government’s resulting emergency measures have had severe implications for many businesses. Read on for answers to some frequently-asked questions on corporate &…

Sophie Martyn BSc (Hons)
Associate, solicitor

Fixed price legal advice for SMEs & the Coronavirus Business Interruption Loan Scheme


The Coronavirus Business Interruption Loan Scheme (CBILS) has thrown a much-needed lifeline to businesses experiencing cashflow difficulties as a result of the coronavirus outbreak. The eligibility criteria of CBILS was…

Chris Wills LLB (Hons)

Commercial contracts & coronavirus: What are the implications?


As the coronavirus (COVID-19) pandemic develops, we have seen significant disruption to businesses across multiple sectors in the UK. Understandably, this has led to widespread concern about the implications for…

Sophie Martyn BSc (Hons)
Associate, solicitor
Contact us