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Employees and intellectual property ownership

Trade secrets are often the foundation of a company’s hold in the marketplace. Although they must be kept close, it is typically necessary for at least some employees to have access to them in the course of their job functions. In fact, they may even be the creators of the intellectual property. An employee who ends the employment relationship may have the information necessary to start or support a rival company. According to the Florida Statutes, this could be considered theft or embezzlement. First, though, the company must establish ownership of the intellectual property.

According to U.S. copyright law, the employer and employee must both sign an agreement if anyone besides the company is to own rights to the copyrighted intellectual property, as long as it was created as a work made for hire. The definition of “work made for hire” can be problematic when proving company ownership unless there is a written contract with terms identifying the work as such.

When an employee creates the intellectual property as part of his or her duties, the work is generally considered the property of the company. If the person in question may be considered an independent contractor rather than an employee, though, the absence of a written agreement providing the company with the rights automatically makes the creator the owner. Therefore, a company that depends on intellectual property should consider the classification of those who will be developing it.

An employer maintains control over the training, equipment and methods of work of all employees, and must withhold income taxes. Independent contractors must maintain their own records, but they have the authority to do the work they are hired to do in the way they deem best. Ideally, employers should evaluate the needs of the employment relationship carefully before determining whether to hire employees or independent contractors.

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