Protecting Company Intellectual Property Through Employment Agreements and Employee Exit Processes

This article appeared in the February 2022 issue of ALI CLE’s The Practical Lawyer.

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Work environments have become more flexible, in part due to the recent necessity of remote work arrangements, allowing employers and employees alike to seek new opportunities in new geographic markets. In turn, remote work environments have generated increased employee turnover, presenting unique challenges for employers who need to protect their intellectual property (IP) rights. Remote work environments raise additional complications, for example, in situations where the activities involved in creating, maintaining, and using company IP take place at the employee’s residence or with the assistance of the employee’s resources, such as computers, phones, and applications.

Ownership of and disputes over IP rights can be complicated and consume resources. Such intellectual property rights typically include: (i) patents which protect inventions; (ii) trademarks which protect a company’s brand and reputation; (iii) copyrights which protect works of authorship and creativity; and (iv) trade secrets which protect a company’s confidential or propriety information. As a best practice to reduce the risk of IP disputes with employees, it is important to set clear expectations regarding company IP rights at the outset of the employment relationship and to maintain such expectations throughout the course of employment. Addressing these issues upfront can potentially avoid costly litigation at a later date.

This article addresses practices that can be adopted at the initiation of the employee relationship and during the employee exiting process to protect company IP rights and reduce the risk of IP disputes.