Do you know if employees in your organisation are taking home valuable corporate assets every night? What about the information they take home in their heads as they walk out the door? If you think this doesn’t matter, then you are making a major misjudgement about the value of intellectual property (IP).
IP is extremely important, according to David Henderson, managing director of Uniquest, a leading research commercialisation company. “Increasingly, a company’s competitiveness is defined by the innovations and ideas it comes up with. IP is a critical asset and it is not fully recognised in many Australian companies,” he says.
Noric Dilanchian, managing partner at Dilanchian Lawyers and Consultants, agrees. “When you realise the main value of the fastest growing companies in the world is their IP, you begin to see the importance,” he says. “In Australia there is enormous ignorance about how to manage IP.”
HR’s critical role
Given this backdrop, organisations need to take a closer look at how they deal with their IP. John Lee, a principal at specialist IP law firm Griffith Hack believes both the HR and legal departments need to be across the IP issue. “It is an important issue for HR as there is increased value in intangibles such as staff. HR practitioners are the guardians of an organisation’s staff, so therefore they have a vital role in this area.”
Henderson believes that a good IP policy must outline more than just the ownership of any innovations. “It also needs to cover the fact that employment creates a positive obligation on employees to come up with new ideas.” IP that cannot be utilised within the organisation also needs protection as its value can be realised by selling the idea or process. “IBM gets a substantial percentage of its annual profits from the ideas it develops and then sells off,” he notes.
While clear IP policies are vital, detailed employment contracts also need to be in place to avoid lengthy and expensive litigation. Dilanchian believes that many contracts focus too much on traditional issues such as salary and leave, with little attention paid to IP protection.
Keeping it secret
While protecting patent or copyright IP is fairly straightforward, protecting the IP inherent in confidential information is more complex. According to Dilanchian, the value of all the confidential information in the world far exceeds the value of all the trademarks and patents. This is an area where careful documentation is essential.
Lee agrees that confidential information is critical to IP protection. “Most people recognise IP as widgets or inventions, but IP is much broader and can cover systems and processes. If people are introducing new processes into the business, they need to be recognised and protected. IP is anything that gives you or the organisation a competitive edge,” he explains.
Explaining and training
“They don’t have to be experts on patents or copyright, all they need to know is that the organisation encourages them to develop ideas and who to put them in front of when they arise. Staff need an awareness about IP and to know they have somewhere to go with questions,” Henderson explains.
Although protecting their employer’s IP is important, employees also need training about infringing upon another entity’s IP. “This can lead to costly litigation and damages. IP infringement can be as simple as exceeding the number of licensed software users. “Often there is no malice in the act and it is due to a lack of understanding and knowledge, so that is why education is so important,” Lee explains.
Lee argues IP education should be part of the induction process, with an hour or so devoted to the topic. “The objective is to get staff to recognise when there is an IP issue and to ask the question so it can be addressed by their manager, legal or HR. It is not realistic to expect every employee to understand all aspects of IP, but they need to recognise the issue.”
There are other HR processes that need to be geared towards protecting organisational IP. The termination interview is also important, Dilanchian says. “At the exit, the debriefing can involve a discussion about the rights of the employee and areas such as ownership of their contact details.” Although most sophisticated organisations remind employees about their responsibilities in relation to contacts and business processes when they leave, Lee believes protection may now need to extend further.
Tips for managing IP
• Record details for all significant documents.
• Establish a centralised domain-name register.
• Document all names used within the organisation.
• Regularly monitor organisational activities for potential IP.
• Document all valuable organisational processes.
• Seek appropriate legal and expert advice on managing organisational IP.