Texas Border Business
By J. Fernando González
This question does not have a simple answer. The particulars are heavily dependent on the state in question, and individual cases get decided on many subtle factors, but the general pattern is that the individual creator owns a copyright or patent right unless an agreement exists to change that, and trade secrets are owned by the employer. Copyrights and patents have different law that applies, and both are created by the Federal law, but state law often decides ownership.
You own a copyright the instant you write software, write text, take photographs, compose music, or create artistic works and graphic designs. You can register a copyright to add some extra protection (specifically, it adds extra treble damages against an infringer), but registration does not change the ownership. If an employment agreement or contract includes the phrase work for hire, then the owner is the party that paid for the work. If you do freelance work, you should charge a lot more for a work for hire since you would have to license it back from the owner if you wanted to use it for your portfolio.
For patents, you generally own patent rights to an invention you created while employed unless you signed an employment agreement assigning invention rights, or if you were hired specifically to invent the design. The latter is called the hired to invent doctrine and can be in effect even without a written agreement. Even if there is no agreement for assignment, the shop right doctrine grants an implied license to the employer to use the invention internally if it was developed within the scope of your employment and/or using employer’s equipment. The shop right cannot be transferred to another party, but in some cases has been allowed to transfer when a company was acquired. Transient and contract workers can create issues, too, as in one case where a candy company obtained a shop right for a chocolate spray pump that was created in their facility by an independent subcontractor engineer that was actually working for a third party at the time.
Employment agreements usually state that inventions are owned by the employer if they were created within the scope of employment or if the invention is “related” to the business. Cases have decided that “related” includes a lot more than one might expect. If any other employee is working on that idea, even if it’s not part of your particular duties, it is related. If the employer is thinking about eventually expanding their business into that area, it is considered related.
Trade secrets are generally owned by the employer even if they were created by an employee, and the Texas Uniform Trade Secrets Act established that threatened misappropriation can be used against former employees that go work for a competitor or start up a new business even before any trade secret information can be used. Employment agreements should make clear how trade secrets are managed in a company.
Some states, like California, have explicit legal protections for employees who invent or write on their own time without using any employer resources. Those protections exist to give employees more tools against unscrupulous employers that would try to steal ideas that they don’t have right to, but the employee would still have to prove that no work was done on company time or equipment. That’s not always easy.
It is imperative to have an attorney review any employment contracts before taking a job, to ensure they are legally enforceable in your state, but also to ensure they are reasonable.