January 19, 2020

What is intellectual property, who owns it and how to protect it

Photo by Patrick Tomasso on Unsplash

What is intellectual property, who owns it and how to protect it

Updated: 27 January 2021

It’s important to know what intellectual property (IP) is and who owns it so you can protect it.

Here’s a guide. 

IP meaning

Here’s what I mean by intellectual property - in simple terms, it’s an idea or proprietary knowledge.

This may include an invention, trademark, design, brand or the application of an idea. The idea has to be new or original. 

Some IP examples

Below are some examples of IP, while the list is long, it's not exhaustive:

  • algorithms; 
  • business names including domain and and domain names; 
  • circuits including circuit layout rights, integrated circuit, circuit layout or semiconductor chip layout or design, plan, drawing or design, or scientific, technical or engineering information or document;
  • charts and manuals including data and logic flow charts, user manuals, data structures;
  • computer program; 
  • content and designs for all websites and apps including written material, photographs, graphics, music, audio and video; 
  •  copyright or other rights in the nature of copyright subsisting in any works or other subject matter in this Schedule;
  • databases and database contents;
  • drawings and designs including but not limited to computer generated graphic symbols; 
  • e-commerce systems; 
  • invention or discovery;
  • logos; 
  • object code; 
  • patent or application for patent, right to apply for patent or similar rights for or in respect of any other Intellectual Property; 
  • product names; 
  • screen displays including but not limited to graphic user interfaces, web pages;
  • search engines;
  • software including text based HTML code;
  • source code;
  • trade secrets including but not limited to know-how, or right of secrecy or confidentiality in respect of any information or document or other Intellectual Property referred to in this Schedule.

Who owns the intellectual property

Employees vs contractors

Intellectual property created by an employee for an employer is owned by the employer, even if there’s no written or verbal contract in place.

As for contractors, the opposite is true. It’s the contractor that owns the intellectual property unless a written contract states the principal (entity that hired the contractor) is the owner.

What you need to protect your IP

For hires, a written contract is the best way to protect precious business intellectual property - and that applies for both employees and contractors. 

Even though a business automatically owns employee created IP, its important to let the employee know this to avoid any IP breaches. 

Transfer of IP deed or agreement

In many cases, contractors are also asked to sign a transfer of IP deed or agreement, this provides extra assurance to the employer and any investors (in addition to their employment or contractor agreement) that the IP has transferred and is owned by the business. 

Usually an IP assignment deed is the preferable format for an IP assignment because you have 12 years to enforce a deed compared to 6 years for an agreement. We wrote about the difference here

For your patents and designs, avoiding publicity is important

Patents + designs - avoid publicity

For patents and designs, beware of publishing your patents or designs if you are thinking of protecting your patent or design rights and have not applied for IP protection yet. 

Practically this means not posting about it on social media, presenting on it in public or disclosing it in trade journals. 

If you need to disclose your patent or design, a non disclosure agreement or deed is a good idea to protect your IP.

As always, get advice if you are in doubt.

Do you have questions or comments about intellectual property? Be sure to leave them below. 





About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, CPA and owner of a business consultancy, Vivian is well-positioned to advise Australia's top entrepreneurs. Entrepreneurs benefit from Vivian's commercially focussed legal advice, business experience, and commitment to deliver the best quality business legal services to entrepreneurs.

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