for the London Free Press – January 21, 2008
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The failure to document the ownership of intellectual property is one of the most common mistakes made by organizations. It can be difficult to correct after the fact.
Intellectual property covers a wide gamut of things ranging from copyright, trade-marks, patents, nondisclosure obligations, trade secrets and license arrangements both in and out.
This commonly manifests itself when other parties create something for an organization. That could be anything ranging from custom computer programming to writing a corporate brochure to creating images for use in advertising material.
Not being able to prove ownership — or indeed, not having ownership at all — can cause significant ramifications to one’s business.
Not being able to prove you actually own the rights to the product you sell can be fatal to getting financing, making a significant sale, or to the sale of your business. It can quickly end that takeover you were counting on as your liquidity event or for your retirement plan.
While it is theoretically easy to document this after the fact, it is often not easy to find the right people, convince them to co-operate, and convince them your view of ownership is the right one. People often disagree on who should own things, especially after it is created.
Asking for someone to sign a document that confirms they don’t own something they created leads to the conclusion that it must have some value.
And if it has value, their desire to get part of that value may colour their perception of who is actually entitled to it.
Without an agreement to the contrary, the starting position is that the contractor, not the organization that hires them to do the job, owns whatever they create.
There are many misconceptions about who owns what, and what rights attach by default.
Situations often come with different points of view, which can lead to different perceptions and conclusions about ownership and other rights attaching to creative works.
It is crucial for those issues to be addressed in writing with contractors. This is true whether one is hiring a large corporation to do some programming, whether borrowing some creative people from the business down the hall, or whether hiring an independent contractor to perform a task.
It is not uncommon for a client to a come to their lawyer saying they think they own something, but a former employee or contractor insists they own it.
Typically this happens when one needs to prove one owns it for some reason. If the other party knows that, it raises the difficulty and price to get it resolved.
The solution to this problem is simple. Put the arrangement in writing before the work starts, and clearly set out the ownership and rights that attach to the material being created.
If there are disagreements over intentions regarding ownership and rights, it is far easier and better to resolve those up front before the work begins