Most UK employment contracts contain an IP assignment clause that transfers ownership of anything you create during employment to your employer. While this is standard, the scope of these clauses varies dramatically — some are limited to work done in the course of normal duties, while others attempt to capture inventions made in your own time with your own resources. The Patents Act 1977 provides specific protections for employee inventors, including the right to compensation for outstanding benefit patents. Understanding where the line falls is essential before you sign.
What is a IP Assignment and Employee Inventions?
An IP assignment clause in a UK employment contract is a provision that transfers ownership of intellectual property (patents, copyright, designs, trade secrets) created by the employee to the employer. The scope, timing, and compensation for this transfer are governed by a combination of the contract terms and statutory provisions.
Red flags to watch for
Under the Patents Act 1977, s 39, an employer only owns inventions made in the course of normal duties or duties specifically assigned where an invention might reasonably be expected. Clauses that go beyond this may be unenforceable for patents.
The Patents Act 1977, ss 40-43, gives employees the right to compensation if their patent provides outstanding benefit to the employer. Kelly v GE Healthcare [2009] RPC 12 is the leading case. The contract should not purport to waive this right.
While moral rights under the Copyright, Designs and Patents Act 1988 can be waived (s 87), a blanket waiver buried in an employment contract may not represent genuine consent.
If you bring IP into the role, the contract should carve this out. Otherwise, the employer may claim ownership of IP you created before joining.
A clause requiring you to assign IP created after leaving — even if it relates to knowledge gained during employment — should have a reasonable time limit.
Good practice is to include a disclosure mechanism so that both parties can agree on ownership of inventions that fall outside the employment scope.
Your legal rights
The Patents Act 1977, s 39, determines ownership of employee inventions: inventions belong to the employer only if made in the course of normal duties or specifically assigned duties where an invention might reasonably be expected, or if the employee has a special obligation to further the employer's interests. Sections 40-43 provide for employee compensation where a patent is of outstanding benefit (Kelly v GE Healthcare [2009] RPC 12; Shanks v Unilever [2019] UKSC 45). Copyright in works created in the course of employment belongs to the employer under the Copyright, Designs and Patents Act 1988, s 11(2). Moral rights can be waived under s 87.
Questions to ask before you sign
- 1Does the IP assignment clause extend to inventions made outside my normal duties?
- 2Is there a carve-out for pre-existing IP I bring to the role?
- 3Does the contract preserve my right to compensation for outstanding benefit patents?
- 4How are moral rights handled — is there a blanket waiver?
- 5Does the IP assignment obligation continue after termination, and for how long?
- 6Is there a process for disclosing and resolving ownership of inventions made outside working hours?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.