In running your business, you (or your business) are likely to become the owner of intellectual property (IP). IP comes in many different forms. If you design or create artwork for beautiful objects, you will own the copyright in those designs or artworks; if you design apps or computer games, that will also result in copyright ownership; if you’re an inventor, hopefully you’ll be able to register a patent or two. You might also be able to license that IP to others and generate even greater revenue from it.
In the absence of agreement to the contrary, the employer, not the employee, owns IP created during the course of employment. For example, if you employ an artist to help with your designs, you own the artwork created. If you discover that a former employee is exploiting your IP, you are entitled to protect your interests.
In addition, you probably possess very important confidential information: your trade secrets. These may include recipes or formulae for creating your products, customer lists and/or supplier and buyer agreement terms, business development plans, strategic objectives and investment terms, non-public information behind web-site firewalls requiring authorised log-ins and/or passwords to unlock them could also fall into this confidential category.
If you employ people in your business, they may be in a position to exploit your IP or confidential data for their own gain, possibly by using their knowledge to assist a competitor. If they’re not properly trained, they may even do this inadvertently, which can still create vulnerabilities for your business, both in terms of the competitive edge that you may lose, but also since such disclosures could be unlawful of themselves (e.g. breach the competition and cartel rules, which apply to businesses small and large).
Employees generally have a duty of confidentiality towards the business that employs them, and aspects of this duty continue after termination of the contract. Even if an employment contract is silent on this, there is probably an implied duty of confidentiality. However, we always advise including an express term to this effect.
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