Owning Your IP: Employment & Independent Contractor Agreements with Devin Miller of Miller IP Law

2022-02-17

When time is of the essence and work needs to be executed, we often forego formalities and hop right into execution. Hiring a contractor or friend to help you with the work. This was the case with my friend Pat (name changed) who paid a friend to build a proprietary software product for her company. A lot of problems came up in the process and the relationship was terminated. Pat wanted the IP to finish the product but there was no formal agreement in place and Pat did not own the IP. Long story short, the relationship went south and it ended up in litigation. The end result was an additional 7 figure payout to obtain the rights to the code so the...

When time is of the essence and work needs to be executed, we often forego formalities and hop right into execution. Hiring a contractor or friend to help you with the work.

This was the case with my friend Pat (name changed) who paid a friend to build a proprietary software product for her company. A lot of problems came up in the process and the relationship was terminated. Pat wanted the IP to finish the product but there was no formal agreement in place and Pat did not own the IP.

Long story short, the relationship went south and it ended up in litigation. The end result was an additional 7 figure payout to obtain the rights to the code so the company could finish & release the product. A very costly encounter for Pat that would have been circumvented with a written agreement.

Today we discuss:

Why your IP needs to be protected before you hire
How to best protect it with anyone who touches your product

Challenge today?

Is your IP protected
- Freelancing platform
- Software / product Development contractors
- Website development
- Video creation
- Training manuals/courses

Why is this important to the company?

Becomes a problem when…
- Changing the terms of the agreement (product development)
- Not having rights to the video content you paid for

Rick’s Nuggets

Employment/ Co-Founder Agreements
What happens when someone leaves
Who owns what? Messy & difficult
Without an operating agreement:
- You don't own and may have a non exclusive right to the IP

How do we solve the problem?

Get this in place BEFORE you pay anyone!!!
Components that protect you
Outline the role/position
- Work for hire
- Fiver not protected
- CIAA
Indicate when the relationship concludes
- Indicate that their role is either an employee or an independent contractor
- If they are employee, indicate the extent they can make decisions for the company or represent the company (or not), information they keep confidential, non-competes, etc.
- If they are an independent contractor, indicate that they are not an employee of the company, do not represent or make decisions on behalf of the company, the company doesn’t pay their insurance or taxes, they are a separate legal entity, shorter term arrangement, you don’t exert control of the contractor, etc.
* Duty to assign the rights to you
- Whether they are an employee or an independent contractor, make sure to include a clause indicating that they have a duty to assign any materials, work product, patents, trademarks, copyrights, and so forth that they created. If they are an employee this includes any work product created during their employment and using any information or assets of the company. If they are an independent contractor, this includes any work product and intellectual property created while the independent contractor is working on the project.
Exclusive rights
- To the extent that the employee or contractor maintains any rights to the intellectual property or other works, they give the business an exclusive license to the IP/works free of charge