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April 21, 2022

Intern v intellectual property – who owns what?

Let’s set the scene. Your business is your baby – you’ve helped it grow through the early stages; watched it mature as the years go on; and finally, you’re letting it go off to venture out on its own – it’s now time to sell. The date is set, the value is right, and all that’s left is to sign the papers – but the buyer starts asking questions about whether the business truly owns the intellectual property (IP). It becomes clear they’ve done their IP homework. Confusion fogs your mind, and you start backtracking, trying to remember who worked on the IP – it was only your employees and that *lightbulb moment* INTERN! The fog begins to clear, and you remember where you went wrong.

A common mistake people make when developing their company’s IP is forgetting who worked on it. The general rule is that the creator of IP owns it and therefore using it without their permission can result in infringement. This can lead to all sorts of headaches, not to mention costs, which is why it’s so important to take measures to prevent ever reaching this situation.

Despite what you may hear, it is all about status, but not in the hierarchical sense. If the intern has the status of ‘employee’, this is less of an issue as an employment contract can act as an assignment document, transferring any IP produced by the intern, during their course of employment, to the company. 

However, if the intern does not have ‘employee’ status, which is usually the case, then special care must be taken before they create any new IP. Interns carrying out research and development should sign a contract before starting which clearly expresses that any IP they create will belong to the company. If they’ve already started work, as soon as it is practicable, you should ask them to sign an assignment document which will transfer any IP they have created or will create in the future to the company. It is also wise to have interns sign a non-disclosure agreement/confidentiality agreement to protect the business’ commercially sensitive information.  

Interns are a valuable resource, they’re a way of identifying future talent, and they help the business grow. It is therefore imperative that work they do during their internship belongs to the company and steps are taken to ensure things don’t go awry.

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