Notes on intellectual property rights in labor relationships

Notes on intellectual property rights in labor relationships
Notes on intellectual property rights in labor relationships

Intellectual Property Law has quite detailed regulations on intellectual property rights (“IPRs”) as well as acts of IPRs infringement so that enterprises can identify each occurrence of infringement that has the potential to affect their legitimate interests. However, if being placed in the employment relationship between the Employee and the Employer, it seems that the violations of the Employees against the IPRs of the Employer mainly focus on IPRs regarding copyright, copyright-related rights, and trade secrets – one of the objects protected under industrial property rights. Because the law does not require registration for the above-mentioned objects, the application of security measures to the above-mentioned objects is one of the core factors in establishing and exploiting industrial property rights in the business activities of enterprises.

In some cases, with the Employees’ position, they have opportunities to access or illegally copy or disclose these objects to others that these objects are owned by the Employer. The impact of the Employees’ IPRs infringement is incalculable because for many enterprises, IPRs are the most valuable assets in an enterprise, deciding the existence or termination of its operations. Although when the Employee infringes the IPRs of the enterprise, the Employer can apply the dismissal discipline to the Employee. However, this seems to be just a temporary handling measure of the Employer, not a long-term strategy to protect its interests. Because the business activities of the enterprise may be severely affected, or the enterprise may have to cease operations when the entire value of the enterprise’s assets as IPRs have been provided to its direct competitors. So, what should enterprises do to protect their IPRs against the risk of being infringed by the Employees?

Firstly, the enterprise should promptly carry out procedures for establishing IPRs to protect objects according to the provisions of Intellectual Property Law. For example, enterprises manufacturing goods with specific designs such as cars and motorbikes should register for protection title for industrial property rights to industrial design as soon as the designs of the products are formed. This will help to avoid the risks of the Employee providing to competitors when the product has not yet been registered for protection, leading the major losses. 

Secondly, as recruiting and signing labor contracts with the Employee, the enterprise and the Employee should have an agreement and recording ownership rights over objects of IPRs.  In particular, the agreement should specify all objects of intellectual property that the Employee creates directly related to assigned tasks are the property of the enterprise and the enterprise is the sole owner of the IP assets created by the Employee during the working time for the enterprise and this agreement is binding and continues to be valid even after the employment relationship between the Employee and the enterprise has ended.

Thirdly, enterprises should sign the following agreements with the Employees such as non-disclosure agreements, non-compete agreements. The non-disclosure agreement will clearly define the information that the Employee must keep confidential as well as record the method of management and use of such information. In fact, regardless of the term of a labor contract, when the Employee violates any content relating to commitment to information security, the enterprise has a basis to force the Employee to be responsible, including confidentiality obligations.

Finally, enterprises should form their own internal electronic communication policies. Accordingly, the enterprise will clearly identify all data information, electronic mail stored on computers, internal information systems that the Employees are allowed to access are the property of the enterprise and the enterprise has full control and evaluation without any exception. The Employees are required to comply and cooperate so that the Employer can access and control the equipment used by the Employees at any time if necessary. These policies will help the enterprises protect their documents in the form of electronic data to prevent the Employees’ intention to transmit information under IPR protection via electronic means (such as copying from the computer to another storage device or to third parties, etc.).

In the current era of information technology and engineering development, IP has gradually become an important asset of enterprises, one of the factors that help affirm the position of enterprises themselves in the market as well as the foundation for the development of production and business activities. The protection of IPRs of enterprises accordingly is also facing many challenges. Therefore, enterprises should take the right approach and pay attention to the development of strategic measures to maximize the protection of their intellectual products and related legitimate rights.

The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.