Failure to secure ownership of intellectual property is one of the most costly mistakes for any small business owner. It is also one of the most easily preventable.

This is what company owners and executives should know:

Under federal copyright law, the ownership of copyrights and inventions belongs to independent contractors and employees, unless there is a written agreement to the contrary in place. It mandates that employees and independent contractors who invent products, write materials and develop software may be the owners of the intellectual property rights.

Also, an employer may only have a limited license in an invention that an employee creates while on the employer’s time clock.

Fortunately, this type of catastrophe can be avoided. All U.S. states permit employers to require their employees to sign copyright, intellectual property and invention assignment agreements that give all rights to the company.

A well-drafted agreement can be less than a single page in length and should be written by an attorney. It states that the contractor or employee legally assigns all rights to the business. In addition, these agreements require the employee to assist the company’s counsel in securing and enforcing the rights.

Another thing business owner and executives can do is to ask employees to say upfront what pre-existing inventions should be excluded from the agreement. The agreement should, however cover all new inventions that are in any way related to the business, even if developed during the employees’ non-working hours.

These simple procedures let business owners avoid serious aggravations and loss of irreplaceable property. To learn more about protecting intellectual property give Filler & Associates a call.