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What Legal Effect Does Remote Working Have on Intellectual Property Rights in the Workplace?

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  7. What Legal Effect Does Remote Working Have on Intellectual Property Rights in the Workplace?

Published Date: November 18, 2020

In a recent Savile Row Workplace survey, in partnership with Adams & Adams, and published in October 2020, 88% of the respondents said they prefer to either work from home or a combination of both home and office. Despite this, 67% of those surveyed have not altered their work policies or agreements for remote working, and of those that did, only 7% made any change to their intellectual property management regime.

Intellectual property remains a valuable asset to a business, which needs careful consideration in remote working scenarios, where a company’s rights may be at risk out of a controlled traditional workplace environment. Many businesses may need to rethink their agreements and policies in this new space to mitigate a potential loss of intellectual property rights.

Clauses dealing with intellectual property when working from home

Before making any changes to intellectual property policies and agreements, businesses should have a clear understanding of how intellectual property rights are created, who owns these rights, and what effect remote working may have on these rights. At the outset, it is worth noting the following challenge with the general rule that intellectual property created within the course and scope of an employment contract is owned by the employer. In a remote working environment, one should appreciate that accurately  determining which aspects of creativity or innovation are within the course and scope of an employment contract and which are not,  become considerably more challenging and open to abuse.

The most common of these rights are:

  • Copyrights

These rights evolve automatically through the creation of works such as literary, artistic, musical, or computer programs. Identifying the author of these works is critical in determining ownership, as only in a limited number of circumstances is the first owner of the work not the author. Exceptions to this include works created in the course of employment of another, or provisions of a contract that regulates ownership.

Where remote working does not entail any change to employment, copyrights will likely continue to be owned by the employer. However, if an employees’ obligations are to change due to working out of the office, it may be necessary for any contracts and policies to contain specific clauses on copyright ownership.

  • Patents

A patentee is the person whose name is entered in the register as the grantee or proprietor of a patent. An application for a patent in respect of an invention may be made by the inventor or by any other person acquiring the right to apply, or by both such inventor and such other person.

Any contract is null and void if an employer:

  • attempts to secure ownership of intellectual property made outside of the employee’s course and scope of employment; or
  • tries to limit the employee’s rights in inventions or designs developed by him/her for more than one year following termination of employment.

If an organisation funding the invention is publicly funded (which may include a financial contribution to the place of work) then special legislation governs the commercialisation and ownership of such intellectual property, especially patent rights. Remote working could affect both the relationship between inventor and organisation and the funding of the place of work.

  • Designs

A proprietor is the author of the design; or where the author of the design executes the work for another person, the other person for whom the work is so executed; or where a person, or their employee acting in the course of their employment, makes a design for another person in terms of an agreement, such other person; where the ownership in the design has passed to any other person, such other person.

Any design for another person is owned by that person. However, the meaning of “work for another person” is open to interpretation and, consequently, should be regulated by a written contract and/or enforceable policies. As with patents, the unlawfulness of certain contractual terms mean that additional care should be taken when drafting these terms.

  • Trade marks

Rights in trade marks occur both through registration and through reputation or goodwill of a company symbolised by the trade mark under which that trade mark or goodwill is created. There are both registered and unregistered trade marks.

The applicant for a registered trade mark right needs to be the proprietor, who adopted the trade mark or has the intention of using that trade mark, if the trade mark is not in use by them. Ownership of unregistered trade mark rights is a question of fact related to the public understanding of who is in control of that trade mark.

Remote working, linked with possible changes in employment terms, could raise questions on proprietorship. This may result in user and registered trade marks rights vesting in different persons, reducing the value of the trade mark. Contractual terms and enforceable policies can regulate these outcomes.

  • Knowhow, confidential information and trade secrets

These rights relate to information that is both secret (not being known outside of the organisation) and that which gives that organisation a competitive advantage. To enforce these rights, they need to be capable of being identified, accessed and restricted in agreements between an organisation and employees and contractors.

In a remote working environment, this secret information may be at risk of being exposed to the public domain through practical considerations, such as a stolen laptop or a casual conversation with a spouse. Because of this, along with other common law principles, care needs to be taken when drafting, managing and enforcing contractual terms and policies dealing with this type of protection.

Considerations for a global workforce

As remote working practices accelerate, businesses can look beyond national borders in which to operate and in which to hire employees. Approaches to the contract of employment, policies and laws relating to intellectual property differ from one country to the next and cannot be ignored.

Government also has a role to play because of its protectionist policy on IP transfers in and out of South Africa. From an IP perspective, for example, innovation from a local consultant will likely require government approval to be exported to an overseas client, potentially disincentivising the use of the South African workforce as consultants.

Businesses should obtain specific legal advice to instil intellectual property guidelines and policies for employees to follow when remote working. Furthermore, the validity of the contract or enforceability of related policies and the way in which they are agreed, adopted, or executed is very important under such working circumstances.

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