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Intellectual Property - proxy demanded from company

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Hi,

 

I work in the creative industry and about to sign a permanent contract.

 

The contract is quite detailed and I came across a clause that leaves me uncomfortable that reads as follows ( clause 13.8):

 

13. INTELLECTUAL PROPERTY RIGHTS

 

13.1 The parties acknowledge that You may create Inventions (alone or jointly) in the course of your employment with the Company and that You have a special obligation to further the interests of the Company in relation to such Inventions. You shall, promptly following creation, disclose to the Company all such Inventions and works embodying Company Intellectual Property.

 

13.2 You acknowledge that (except to the extent prohibited by or ineffective in law) all Company Intellectual Property and materials embodying them shall automatically belong to the Company as from creation for the full term of those rights and (except to the extent prohibited by or ineffective in law), You hereby assign, by way of present and future assignment, any and all right, title and interest therein to the Company.

 

13.3 To the extent that any Company Intellectual Property does not vest in the Company automatically pursuant to clause 19.2 (and except to the extent prohibited by or ineffective in law), You hold such property on trust for the Company and hereby grant to the Company an exclusive, royalty free licence to use such property in its discretion until such Company Intellectual Property fully vests in the Company.

 

13.4 To the extent that any Inventions created by You (whether alone or jointly) at any time during the course of your employment are prohibited by or prevented in law from automatically vesting with the Company pursuant to clause 19.2, You shall, immediately upon creation of such rights, grant the Company a right of first refusal, in writing, to acquire them on arm's length terms to be agreed between the parties. If the parties cannot agree on such terms within 30 days of the Company receiving the offer, the Company shall refer the dispute to an arbitrator who shall be appointed by the President of the Institute of Chartered Accountants in England and Wales. The arbitrator's decision shall be final and binding on the parties and the costs of arbitration shall be borne equally by the parties.

10

 

13.3 You agree:

13.3.1 to use best endeavours to execute all such documents, both during and after your employment, as the Company may reasonably require to vest in the Company all right, title and interest pursuant to this agreement;

13.5.2 to use best endeavours to, provide all such information and assistance and do all such further things as the Company may reasonably require to enable it to protect, maintain and exploit the Company Intellectual Property to the best advantage, including (without limitation), at the Company's request, applying for the protection of Inventions throughout the world;

13.5.3 to use best endeavours to assist the Company in applying for the registration of any registrable Company Intellectual Property, enable it to enforce the Company Intellectual Property against third parties and to defend claims for infringement of third party Intellectual Property Rights;

13.5.4 not to apply for the registration of any Company Intellectual Property in the United Kingdom or any other part of the world without the prior written consent of the Company; and

13.5.5 to keep confidential all Company Intellectual Property unless the Company has consented in writing to its disclosure by You;

 

13.6 As against the Company, its successors and assigns and any licensee of any of the foregoing, you hereby waive all of your present and future moral rights which arise under the Copyright Designs and Patents Act 1988 and all similar rights in other jurisdictions relating to the Company Intellectual Property.

 

13.7 You acknowledge that, except as provided by law, no further remuneration or compensation, other than that provided for in this agreement, is or may become due to You in respect of your compliance with this clause. This clause is without prejudice to your rights under the Patents Act 1977.

 

13.8 You hereby irrevocably appoint the Company as your attorney in your name to sign, execute, do or deliver on your behalf any deed, document or other instrument and to use your name for the purpose of giving full effect to this clause.

 

I´m specially concerned with clause 13.8 - surely if all creative I produce during my employment is "automatically" company property and I have no rights to it why are they asking me to sign basically what I read as a proxy?

 

Should I insist this is taken off or is it normal to demand this? Think I don´t really understand what the company´s after with it.

 

Is this a red flag? Help!

 

Thanks.

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Yes, thats a correct reading, and it's very common. Anything you create outside the business is yours, but during the course of employment, it's theirs. It's perfectly normal and I don't think they'll want to remove it.

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Thanks Becky.

 

My only query is - doesn't all the creative already belong to the company as per previous points in the clause?

If they're stating that anything I create is by default theirs why do they need 13.8 demanding power of attorney?

 

And also, this only applies DURING the employment period not after, correct?

 

Thanks.

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It is normal and don't forget that the effect of it is limited by the words at the end "the purpose of giving full effect to this clause."

This has the effect that the Power is only to be used for the purposes of clause 13. When clause 13 ceases to have effect such as on the termination of the contract, then any intellectual property you create from then on belongs to you.


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You're probably right, it's not necessary.

 

The other thing to consider is that I believe for a power of attorney to be fully granted in any other respect, the contract needs to be executed as a deed - ie, signed and witnessed. So if it's not a deed, the company couldn't venture outside of the usual contractual scope for any other employee in any event.

 

Which means, as BF says above, it wouldn't apply post termination.

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Thanks Becky.

 

My only query is - doesn't all the creative already belong to the company as per previous points in the clause?

If they're stating that anything I create is by default theirs why do they need 13.8 demanding power of attorney?

 

And also, this only applies DURING the employment period not after, correct?

 

Thanks.

 

I think it's mainly to cover a particular situation - say you work for a software company as a programmer, you come up with a brilliant new bit of software, but you work on it at work - even if only at your lunchtime, if you use company equipment, such as a work PC, then sadly, they can claim your programme belongs to them as "their materials" were used to produce it. If you design a wicked new app at home, in your own time, its got bog all to do with them.


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