Compromise agreements and intellectual property

by Redmans on May 17, 2013

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This post will take a brief look at intellectual property provisions in compromise agreements

  1. What is a compromise agreement?
  2. Why might there be provisions relating to intellectual property in a compromise agreement?
  3. How does my employer protect their intellectual property?
  4. How do I know whether I’m entitled to use particular intellectual property after the end of my employment?

Disclaimer: it’s recommended that you obtain specialist employment law advice from an employment law solicitor instead of relying on the content of this article

What is a compromise agreement?

A compromise agreement is a “creature of statute” – a specific type of contract which allows an employer and an employee to agree that the employee will have no further claim against the employer as a result of any breach of a statutory obligation by the employer. In return, the employee receives some form of compensation – whether financial (i.e. a sum of money) or non-financial (i.e. provision of a good reference, an agreement as to confidentiality etc.). The signing of a compromise agreement doesn’t necessarily mean that the employee’s contract of employment will terminate (although it usually does).

Why might there be provisions relating to intellectual property in a compromise agreement?

Once you finish your employment, your employer will want to prevent you from unfairly using intellectual property against its wishes that it owns. Such intellectual property includes trademarks (logos, brand names, distinctive packaging etc.), copyrighted works (computer software, any written works etc.) and patented works. If you unlawfully use this intellectual property after the end of your employment you would be gaining an unfair commercial advantage over your employer and, understandably, your employer would wish to protect its position to ensure that this does not happen.

How does my employer protect their intellectual property?

Your employer would protect its intellectual property by including specific clauses in your contract of employment and any compromise agreement that you sign when your employment terminates. These contracts would specify who owns the intellectual property produced in the course of employment and what – if any – your rights are regarding this property after the employment relationship ends. Generally, the position is that works produced in the course of employment are owned by the employer, unless there is an agreement to the contrary. There may also be restrictive covenants and confidentiality clauses contained within your contract of employment and compromise agreement which would specify that you have a broad duty of confidentiality and are prohibited from undertaking certain acts after the end of your employment, including, potentially, the divulging of information relating to your employer’s intellectual property.

How do I know whether I’m entitled to use particular intellectual property after the end of my employment?

You should check your contract of employment to determine whether there are any clauses relating to the ownership of intellectual property, confidentiality or restrictive covenants. You should also check the terms of any compromise agreement carefully to make sure that you’re not signing away potentially valuable rights relating to intellectual property.

Redmans Solicitors are employment law solicitors based in London

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