Enterprise

Who owns intellectual property, employer or employee?

IP

Who owns the intellectual property, the employer or the employee? FILE PHOTO | NMG

Dear Cathy,

Question: I run an advertising agency and have employed a young graduate as the creative director. His role includes developing concepts and content for various advertisements. During a staff review meeting, he wanted to know if he would be paid extra remuneration for the content he had been creating and also sought to find out if we would co-own the final work. I need a lawyer’s perspective before responding to him, what is your view on this? Edward

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Dear Edward, in a sector such as yours there is a lot of creativity and innovation. One of the critical success factors in the entertainment sector is creativity.

I suppose that it is a plus for you when your employees can generate innovative and engaging content.

The elephant in the room do employees own a part of the content they create and are they entitled to remuneration?

The general position is no they do not own any of the works nor are they entitled to any extra remuneration except in some special circumstances.

One such exception is if their employment contract entitles them to a little-known right known as “ technovation rights.”

Secondly, if you have an agreement with them as to co-owning and remuneration.

The general law on this is that all the works created by an employee during an employment engagement belong solely to the employer.

Therefore, it does not matter if the employer earned a lot of revenue from the work or if it transformed the organisation.

Section 31 of the Copyright Act is to the effect that works created under an employment contract or commissioned works that are, where you hire someone to do a specific task, for example, where you hire a content creator to do certain works, then the work belongs to you.

Therefore, do not be afraid to respond formally and let him know that all the content belongs to you and that he is not entitled to remuneration.

The law notwithstanding it is good to consider ways to retain and motivate creative staff.

Do you have a human resource expert you can speak with on how to motivate your creative director for his extra input? If not have you thought of ways to motivate and retain your team?

One way could be by offering him co-owning rights to the works he has created.

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In as much as the law does not obligate you to do this, it is a show of goodwill and grace on your part.

As a co-owner, your creative director will have certain rights over the works just as you do.

You could consider remunerating your creative director.

You could either pay him something in recognition for his extra work over and above his salary or you get into a revenue-sharing arrangement with him.

This is where he would earn a certain percentage of the income that his creations bring.

I believe that such arrangements will further motivate your staff to even improve their delivery.

You will, however, need to be careful in how you enter such arrangements with them to ensure that your organisation and the work itself are protected.

Take the example where you agree to co-own the work with your staff. What would happen if your staff exited employment?

Would they continue to co-own the work or would you buy them out? How far can they go in making decisions that affect the work? What would happen in the event of a decision deadlock?

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You will still need to talk to your lawyer to get the right documents.

Ms Mputhia is the founder of C Mputhia Advocates.