Intellectual property created by furloughed employees: who owns the rights?

13 April 2021 | Legal updates

Intellectual property created by furloughed employees: who owns the rights?

One of the most challenging parts of managing the Covid-19 pandemic as an employer is navigating the finer details of the Coronavirus Job Retention Scheme – or furlough scheme, as it’s more commonly known. Our intellectual property solicitor Gemma Pickavant takes a look at the rights and ownership of intellectual property and how those laws apply to employees who have been furloughed.

As a company you should not be encouraging employees to continue working for you while they are on furlough. But what should you do if an employee creates intellectual property while on furlough which you want to exploit? More importantly, who owns any intellectual property a furloughed member of staff creates?

IP created during employment

Under the Copyright, Designs and Patents Act, where an employee creates work that is protected by intellectual property rights during the course of their employment, ownership of the intellectual property in the work is vested in the employer company.

Employment during furlough

Under the Coronavirus Job Retention Scheme (CJRS), employees who are on furlough cannot carry out any work for their employer or any organisation linked with it. This includes unpaid work and providing services or generating revenue for any such organisation.

IP created by employees during furlough

Difficulties arise when an employee creates intellectual property which could be used by the employer whilst they are on furlough. For example, if an employee is doodling while on furlough and creates a new company logo which the company decides to adopt, who owns the intellectual property in the logo? The simple answer is, there is no straightforward answer. If the employee is part of the company’s marketing team and was involved in redesigning the company’s logo before being put on furlough, it is likely that the intellectual property rights would belong to the company, as it could be argued that the employee was carrying out their duties. However, companies need to think carefully before asserting their ownership of intellectual property rights in this scenario – if a furloughed employee has been found to be working while on furlough, the company will in breach of the CJRS.

If, on the other hand, the employee is not usually involved in the marketing team and has designed the logo for fun, it is likely that the intellectual property rights would belong to them.

Avoiding disputes about IP with furloughed employees

If an employee does create intellectual property whilst on furlough that you want to exploit, arguing with the employee over who owns the intellectual property rights is likely to be tricky and lead to poor employee relations. In order to successfully prove that the company owns the intellectual property rights, you will need to prove that the employee created the work while carrying out their duties as an employee (in breach of the CJRS). Where feasible you should instead try to reach an amicable solution with the employee which is likely to be in everyone’s best interests.

One solution to consider is requesting that the employee assign any intellectual property rights in their work to the company. This will ensure that the company owns the intellectual property without having to determine who the original owner is.

For advice about any of the issues in this article, get in touch with our intellectual property team, who can advise you on the best course of action.

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