Giving notice: enforcing your IP rights when an employee leaves with more than their P45
A resignation letter has been submitted. The Director, who joined the business in its infancy and has been part of every step as it grew and thrived, has decided to move on. Naturally, it’s disappointing to lose such a valuable part of the team, but from time-to-time all businesses lose key employees. The resignation is accepted, and the process to recruit a replacement begins.
But what if that Director takes away more than the 20 years’ experience they have acquired working for the company?
What if they’ve decided to take the website with them because – after all – they were responsible for setting it up? Or, seeing that they were integral in its development, help themselves to some key tooling before they left? They might even think they could make a better job of the business, and start making and selling a copy of its product.
Worst case scenario is that the original business is faced with a facsimile of itself.
But what can be done?
The first thing business-owners should not do is panic.
Let’s look at ways in which a company can regain control of its IP, reputation, and business, based on these imaginary circumstances; plus some tips on how to prevent it happening again:
A former employee is using the company IP address
Ask for it back. The Director has clearly breached their fiduciary duty in registering the business’ domain name in their own personal name. If they ignore this request, then the next step is to file a Uniform Dispute Resolution Action to recover the domain.
The website has been taken over
On the creation of a website, ask the design company to assign all and any IP rights in the website to the business and transfer all domains across to the business. Quick and easy to do at the outset, this will ensure the company owns and controls any IP in the website, which avoids a situation such as a former employee taking control of the website.
Key tooling needed for manufacturing
Get a simple ownership agreement in place that makes clear that: the tooling belongs to the company; the manufacturer cannot use them for anything other than making products for that company, and the manufacturer cannot hold on to them if the company seeks their return.
Copycat product
When creating a new product, look at whether patent protection is viable at the development stage. If not, are there any other options, such as registering for design protection? Have a conversation with the ex-employee as the leave to explain the law so they understand that in terms of ownership, IP developed during the course of their employment still rests with the business. It would also be worth reiterating the law in relation to confidential information.
Similar branding
Look at filing trade mark applications for the brand of the business sooner rather than later. Do not run the risk of a third party registering the company’s trade mark. More often than not, these registrations can be removed. However, the time and cost of such action far exceeds the cost of filing for the trade mark in the first place.
Education
Provide staff with educational workshops every now and again that explain IP rights, and remind them of the value of these rights to a business. This is a good way to ensure employees are aware that they cannot just exploit a former employer’s IP if they leave.
Contractual obligations
It may be worth adding a clause to employees employment contracts making it clear that theft of an IP right is a breach of contract and therefore actionable.
IP rights are valuable assets for any business, one of the most important it possesses. There are many types of IP rights, which offer varying levels of protection; this is not the case of one size fits all, but the sooner a company has a strategy, the quicker it can act and get back to the vital role of focusing on its business.
Making sure you have a strategic IP plan in place at the outset can help avoid the pitfalls. If you need more advice, please contact the author or your usual Barker Brettell attorney.
