Q: I run a product development organisation where the clients have very onerous Intellectual Property Clauses in their contracts. I now want to create a new employee contract that passes on these same terms to my employees. However, I haven’t found any standard employee contracts that cover these IP issues well and when I went to a law firm to draft a bespoke employee contract the quotations were prohibitively high. Can you recommend any other routes for getting this done?

A: The Employment Rights Act 1996 prescribes that every employed person has the right to be provided with a Written Statement of Particulars of Employment not later than two months after the beginning of their employment. The written statement must include reference to the primary terms and conditions of that particular employment so should be bespoke and therefore unique to the company engaging the employee.

As the written statement references primary terms and conditions of employment there is not normally any provision written in to cover additional clauses such as Confidentiality and the protection of Intellectual Property (IP), however there is no reason why suitable clauses cannot be included in order to contractually bind an employee to the terms from the day they start their employment.

As a matter of course HR Management Support Ltd always advise their clients that some sort of confidentiality clause should be included even if it’s aim is only to protect marketing and sales information. However in a commercial organisation that involves research and product development HR Management Support have the necessary experience and can draft the clauses in order to protect from a design concept to the finished product.

There are four main types of Intellectual Property rights which you can use to protect your inventions or creations:

Patents

Patents protect what makes things work – like what makes a wheel turn or the chemical formula of your favourite fizzy drink.

Trade Marks

Trade Marks are signs (like words and logos) that distinguish goods and services in the marketplace.

Designs

Designs protect the appearance of a product/logo, from the shape of an aeroplane to a fashion item

Copyright

Copyright is an automatic right which applies when the work is fixed, that is written or recorded in some way.

Any or all of these can be included in suitably worded clauses within an employee’s contract of employment.

With regards to confidentiality it may be important that you do not make your idea or invention public before you apply to patent it, because this may mean that you cannot patent it, or it may make your patent invalid.

However, that does not mean that you must never discuss your idea or invention with anyone else. For example, you can discuss it with qualified (registered) lawyers, solicitors and patent attorneys because anything you say to or show them is legally privileged. This means it is in confidence and they will not tell anyone else.

Alternatively, you may need to discuss your invention with someone else before you apply for a patent – such as a patent adviser or consultant, or an inventor-support organisation. If so, a Non-Disclosure Agreement (NDA) can help. NDAs are also known as confidentiality agreements and confidentiality-disclosure agreements (CDA).

No single NDA will work in every situation. This means that you must think carefully about what to include in your NDA.

Companies that work on projects related to Government or Military projects may also require their staff to be given security clearance and sign the official secrets act.

For answers to questions like this or any other employee related issues why not contact HR Management Support Ltd. for guidance and advice

Back to Client questions