Protecting innovations helps firms avoid disputes with staff

In today’s labour market, there is a lot of competition for talented employees, especially for businesses in the innovation sector.

There are cases of rivals in the supply market competing for the best people and offering them attractive remuneration.

The worry in this segment is the likelihood of undue disclosure of business secrets to a competitor by the exiting staff. Take the example of this lady who owned a fashion design shop. Her products were unique.

She is the one who did all the designing and trusted her tailors to do the stitching and final work. However, one of her tailors resigned and started his own fashion shop using designs from this lady.

Many businesses face the same problem and this is why today I want employers to understand the nexus between employment regulations and intellectual property laws.

This is especially relevant for businesses in the innovation sector that rely heavily on research and development.

In some businesses all employees are expected to contribute to innovation while in others only a few select staff or a department are expected to contribute to innovation.

However, a number of organisations hire consultants to work on specific projects.

The first thing to understand is the staff’s general terms of employment. Is the employee permanent or hired on contract basis? The business also needs to distinguish between an independent contractor and an employee.

In the case where all staff are expected to participate in innovation, then the employment contract should be general and similar for all. Where it is only a few select members or a department then their terms should be different.

When it comes to independent contractors, the venture contract should include issues of intellectual property.

Why is it important for an employer to safeguard intellectual property in an employer-employee relationship? It must be understood that a worker has access to a lot of the confidential business information.

This should be safeguarded from third parties. Secondly, an intellectual property is not only a right but also an asset. In the same way one takes steps to protect one’s property, it’s also important to secure intellectual property.

My approach to intellectual property protection would be to encourage employers to look at it from an asset management angle and not just creating some rights.

Understanding that intellectual property is an intangible asset of your business will perhaps enhance its management. The employer-employee relationship is never permanent and it is subject to termination at any time.

Therefore, it is prudent to plan for anticipated disputes which may affect intellectual property. Good intellectual property policies mitigate any risks that may arise in the event of a labour row.

There are two main ways an employer can hedge intellectual property risk. One is the strongest and that is, the employer should seek intellectual property protection for all business innovations and in this way, they belong to the company.

If the employee does anything contrary to the employer’s rights, then the business can sue based on intellectual property law angle. The case of the fashion designer and the tailor shows this.

If the designer had protected her work as an industrial design then she would successfully sue the tailor.

The second tool to use to ensure that intellectual property is protected is the employment contract that includes the ownership clause.

Depending on the nature of the contract, the employer can be listed as the sole owner of the intellectual property creations or the staff can be given some ownership as a way of motivation.

Another term to include is the confidentiality and non-disclosure clause where the worker cannot disclose the intellectual property subject matter without consent.

Lastly is the restrictive clause, limiting the employee’s use of the intellectual property subject matter after termination of the contract.

Ms Mputhia is the founder of CM Advocates. Email: [email protected]. Twitter: @cm_advocates.