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Your intellectual property materials are valuable assets for your company. Your confidential information specific to your business is priceless information that your competitors would love to know. Therefore, suppose an employee in your company was to share this information. In that case, it could be highly damaging to your business. For example, it can cause lost sales or loss of reputation. This article will explore what you can do to protect your UK business against an employee stealing your intellectual property.
A Current Employee Is Stealing IP
Businesses can be at risk from employee theft of intellectual property because employees need to access business data to do their job. Employees working on product development may use this knowledge against you by setting up direct competition with your business or copying your products or services. In addition, they may be willing to disclose your business’s trade secrets to another competitor.
As with any employee misconduct issue, you should have a set disciplinary procedure that you follow for any data theft. All employees should sign an employment contract explaining the expected standard of conduct. The employment contract should also contain explicit clauses about confidentiality, misuse, and infringement of intellectual property and personal data. An employment contract should also clarify that you own any intellectual property created by employees during their employment in your business. Employees cannot benefit from it themselves.
A Former Employee Is Stealing IP
If a former employee is stealing your IP or provides confidential information to a new employer or a competitor, this is damaging to your business. Depending on whether their employment contract placed obligations on them after their employment regarding IP, you may be able to take action. For example, you might have included a specific ‘non-compete’ clause. This prevents an employee from working in a competing business (or setting up a competing company) for a certain period. Ideally, the employment contract should contain clauses that prevent them from using your intellectual property.
If you discover that a former employee is using your intellectual property without permission, the best course of action is to send them a formal letter. This letter should remind the ex-employee of the continuing obligation to you. You should ask them to return any intellectual property they have taken and delete any software or data files that belong to your business. You should also request that they immediately cease using your IP or sharing confidential information with anyone else.
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Preventing Future IP Theft From Employees
The best course of action is to stop employees from stealing your IP in the first place. Ensure your employment agreements contain explicit provisions relating to your confidential information and intellectual property. Include what information you consider confidential, with examples if necessary.
For employees who have access to IP that must remain confidential, use restrictive terms that limit the employee’s ability to use that information once they have left your company. These should be specific to the information you are concerned about, and you should only use them for employees where it is relevant. Otherwise, a court may view an overly general term as unenforceable.
Additionally, ensure that you share crucial IP only with employees who need to know it. You should keep records of who is allowed to access what intellectual property. This will not prevent an employee from stealing that information. However, a detailed audit makes it easier to know who has access to information. This can make it easier to ensure that those employees are aware of their obligations.
Key Takeaways
If a current or former employee of your business is stealing your intellectual property, there are a few steps you can take to stop them. You can ensure that your employment contracts contain unambiguous provisions regarding confidential business information and intellectual property. For former employees, consider writing a formal letter reminding them of their obligations regarding your intellectual property and confidential information. If the employee continues their behaviour, or the situation is more serious, you can bring legal action against them.
If you need help with safeguarding or enforcing your IP rights against employees, our experienced intellectual property and employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
If an employee is stealing your business confidential information or telling others your business trade secrets, you can follow your business disciplinary procedure to investigate. Having a set disciplinary process in place allows you and your employees to determine what further action is needed.
If an employee needs access to intellectual property or confidential information, their employment contract should reflect this. It should include information about their obligations concerning intellectual property and keeping confidential information private. If an employee is creating intellectual property for your business, you should also have a clause stating that the company owns that intellectual property.
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