She's left the company – is that her IP or ours?

Jarrod Ritchie, founder and chief executive of Australian-based TPI
has hit the headlines recently because of his dispute with GSK, his former employer.

The dispute, which will be heard by the Victorian Supreme Court next month, centres on allegations by GSK that Ritchie has misused confidential information of GSK’s in setting up his narcotic manufacturing facility with a process that he says is completely new (and for which he has filed provisional patent applications).

In Ritchie’s words, “Our extraction process is quite
different. I have taken nothing from Glaxo other than experience and we are
confident of winning the case.”

Here are a couple of great questions raised byJoanne Sinclair, Consulting Editor here at IP Thinktank. I’ve added some bullet points below each question to stimulate discussion.

1) How do companies manage their IP and HR strategies to retain
talent and innovation (and ideally avoid clashes)?

  • The best remedy, as always is prevention. Make sure the work environment, the conditions and the work is very difficult to beat so that employees don’t want to leave.
  • Have watertight employment agreements in place. Obviously they should include IP assignment and confidentiality clauses, etc. However, non-compete clauses are not such a simple matter. They need to be very carefully considered and many are simply unenforceable. In some situations, confidentiality clauses can be drafted so as to act as an effective non-compete for a limited period.
  • Ensure that your IP capture mechanisms are thorough. Incentives should be set up so that employees really want to disclose new technology as soon as it becomes apparent. The company also needs to have adequate processes to document, analyse and process such disclosures as they become apparent.
  • There’s more…

2) Does the use of knowledge and/or experience gained as an
employee to create intellectual property (after employment) give any rights to the employer? If
so, what are they?

  • The knowledge and experience itself is not owned by the employer.
  • However, the employer can ensure that as far as possible, all IP is properly captured (as briefly mentioned above). This not only extends to invention disclosures for patent filings, but also confidential information and other ‘know-how’ which is very tricky to protect.
  • In some situations, it may be worthwhile having fresh project-specific confidentiality undertakings to be signed by specialised staff each time they commence a new project. These can operate as an effective non-compete for a period of time after employment ceases.

Overall, you need to be rewarding employees in a way that is comensurate with their IP-generation output. Otherwise, they’ll leave and either go to a competitor or set up in (semi) competition, armed with some pretty impressive inside knowledge – even if they choose not to use it directly.

What do you think?

(Thanks to my Consulting Editor, Joanne Sinclair for this interesting piece.)

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