Why employment contracts need an intellectual property clause

“Once upon a time there was a man who was engaged by a radio station to prepare a music catalogue under a consultancy agreement. This involved creating a list of pieces of music together with a grading system as to their popularity. The catalogue was original and attracted copyright protection. However, the consultancy agreement had no clause which said who owned the copyright in the catalogue. The radio station was very successful and expanded its services, sending the music catalogue abroad. The man claimed copyright in the music catalogue and after a Court battle won the rights to receive royalties on any exploitation of the catalogue by the radio station. The absence of a clause in the consultancy agreement meant that the author of the catalogue owned copyright in it. This clearly had not been the intention of the radio station.”

This is why it is important that employers ensure that all employment contracts and contracts with any contractor, consultant or designer contain an intellectual property clause. Without it, you may find that you don’t own the rights created by the contractor, or worse, the contractor is entitled to extra payments.

Employees and consultants, however, are treated differently in relation to the ownership of intellectual property rights; here is what you need to know

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