Intellectual property (IP) is a term referring to creation of human mind in the form of a number of distinct types of expressions for which a set of rights are recognized under the corresponding regimes of law. Innovation plays vital role in sustainable growth of an organization and securing the organizations IP assets through proper planning is essential for utilizing the IP assets later for commercial success.
In case of Indian IT industry, whether it is into services or products or both, IP typically means patent, copyright, design, confidential information, trade secret, brand name and domain name etc., wherein handling confidential information or trade-secret needs a lot of care for the reason that it is not registered and moreover, we don’t have adequate laws to protect them. Though there are several IP related issues, however, drawing line between proprietary IP and client’s IP may become a challenge at times, especially when the company is bound by stringent agreements.
IP policy in simple words, is a guideline that defines IP as per company’s business; provides guidelines for creation, protection, exploitation, disclosure, ownership of IP; sensitizes employees about aspects of IP and at the same time guides them regarding the precautions that need to be taken to safeguard company’s IP as well as prevent or minimize IP infringement risk. IP policy also provides guidelines and procedures for disclosure & non-disclosure of intellectual property whether protectable or not; and to develop and enhance environment of innovation and generate creative & novel IP compatible with business goals of the company.
Coverage of policy
Typically an IP policy is applicable to the employees of the company; however, if company works with outside vendors, Freelancers or consultants etc, coverage of policy may be extended to them as well as they have to be involved in the process of creating IP for which ownership and confidentiality issues need to be addressed clearly in the policy.
Meaning of IP
Defining meaning of IP, depending upon core area of business is essential. IP may include Patent, Copyright, Trademark & Domain name, Design, Confidential information or trade-secret that might be proprietary in nature or created by employees during course of employment or by the consultants as a part of contractual relationship with the company. The kind of IP that shall be included in the definition purely depends upon business area and strategies of the company.
“Sensitization of the employees on confidential information and consequences of misappropriating is necessary from time to time. Whom to disclose, when to disclose, how to disclose such information, shall be made clear in the policy. Liability of the employee during course of employment or even after termination or resignation must be dealt with carefully.”
Ownership
Since IP is created by the employees during the course of employment, company would prefer having ownership of such IP with itself. However, in case of patent, the application for a patent shall be filed by true & first inventor, its assignee or legal representative. Therefore, it is extremely important to list out the inventors whose names are going to appear on the patent application, right in the beginning of the project to avoid arising of disputes later on. However, inventor may further assign rights to the company; so that ownership of the patent is with the company. Similarly, in case of copyright, applicant is the company and the employee who creates the work is called as author. When company decides to file application for copyright registration, the author (s) is required to give NOC (No Objection Certificate) to the Copyright Registry stating that he/she has created the work during course of employment and he/she has no objections if the work gets registered in the name of the company. However, proprietary IP, confidential information is exclusive property of the company unless company specifically authorises employee to disclose, use or own it.
Security and confidentiality
Even though most of the organizations have implemented multiple security measures to prevent the loss, misuse and alteration of any confidential information under its control, employees must strictly follow the security measures, which are extremely crucial to secure technical and business information of the company. First of all identification of trade-secrets is very important and it can be best protected by segregating it into low, moderate and high confidentiality type and further by limiting access to it. Employment and non -disclosure or confidentiality agreement may further be used as tools to safeguard confidential information of the company. Labelling documents as “Confidential” is an appropriate way of communicating information as Confidential and serves as an express notice to indicate nature of the document.
Sensitization of the employees on confidential information and consequences of misappropriating is necessary from time to time. Whom to disclose, when to disclose, how to disclose such information shall be made clear in the policy. Liability of the employee during course of employment or even after termination or resignation must be dealt with carefully.
Record of work
Systematic & periodic record of work, research, ideas is extremely critical to serve as an evidence to establish ownership (copyright) or inventorship (patent or design) and date on which intellectual property was created or developed by employee. It could also be helpful to find out infringement of intellectual property, if performed by an employee. Record book shall not be permitted to be taken outside the premises of the company and crucial data or descriptions should be signed and dated by the creator, supervisor, or coordinator of the project.
Liability of employee
Before expecting employees follow the IP policy, they shall be explained essential clauses of NDA and employment agreement that they sign at the time of joining. This will sensitise them about their duties as well as liabilities towards the company. At the time of termination or resignation, exit interview must be conducted and copy of agreements signed at the time of joining must be handed over to the employee to remind him his responsibilities as well as liabilities. Getting confidential or any sensitive information from prior employer and incorporating such information in the work may land up in a very undesirable condition and any such practice must be strictly discouraged by the company.
Idea Disclosure
As far as patents are concerned, the process starts with conception and disclosure of idea. Here again, the activities such as whom to reveal the idea, how to take idea forward, effort needed to convert idea to executable invention, defining inventors, royalty percentage or reward upon commercialisation of the idea, are few of the critical issues that must be addressed in the IP Policy. However, maintaining confidentiality of idea, documentation, assessment of novelty and business relevance of idea and discussion with patent attorney, filing for patent in India or foreign country requires documentation of the process so that there is coordination between date of filing a patent application and disclosure in the form of product launch. Moreover, in the process of patenting, there are several critical timelines and fee that need to be marked and updated from time to time.
IP Policy is important for any organization today and it is helpful to document the way company handles its IP, liability of employees and confidentiality/security of knowledge and data.
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