The legal ownership of intellectual property ("IP") may be unclear if one party uses IP created by another but has no clear legally binding contract, preferably written. Stop reading if that point is understood with respect to employment and independent contractor agreements. What follows is detail.
Various types of contract can avoid numerous IP risks, issues and problems.
Two types discussed here are contracts for employees and contracts for independent contractors. For different perspectives on the subject see Consultant or contractor intellectual property and Employee or independent contractor?
To identify whether there is any IP needing treatment see the reading list at the end of this post.
If there is no clear contract then a legal advisor must read the legal tea leaves. The advisor should first collect the leaves by asking for: (1) a detailed chronology of events, (2) a list of documents, (3) copies of all evidence, including those documents. This work is mentally demanding and time consuming, hence costly.
In the absence of a clear written contract the required advice or judgment call is about this legal question -
Was the author or creator on developing the IP:
Without a clear contract the answer to that question may be - yes, no, maybe - or something else.
IP law regarding IP ownership is easily summarised. Just because one business pays money for creative or intellectual work to be done, and a person or other business performs and delivers the work, does not mean that IP rights (eg under copyright law and patent law) are sold to the first mentioned party.
To illustrate, a business may be left with no IP ownership even if it engages and pays an individual to write software or to do marketing work resulting in the creation of delivered files with text, photos, videos or other content.
This employee or contractor IP ownership question is a common trap for new businesses and start-ups. More so than established businesses they fall into dispute by avoiding or overlooking use of customised written contracts with collaborators. The management term, "collaborator", can include entities working in a collaborative arrangement, eg employees, independent contractors, volunteers, partners, and joint venturers.
In legal disputes the transition from "issue" to "problem" is crystallised by letters of demand. In IP ownership disputes they typically end with demands and threats about injunctions.
In a fully blown dispute with many facts and documents to be assessed, it can easily cost A$1,200 to have a lawyer prepare a decent letter of demand. "Decent" means a letter which at least: (1) sets out key facts supported ideally by documentary evidence, (2) lists the legal consequences under specific areas of law, and (3) sets out clear demands and a deadline.
To save legal costs by avoiding a written contract is a decision to make with good counsel. This is because of the complexity of considerations. Here's two aspects to the complexity.
These complexities lurk when there is no clear contract. If a dispute arises for legal tea leaf examination the many questions to be examined include those below.
For each bullet point the first option is suggestive of an employer-employee legal relationship.
To avoid uncertainty, complexity, mess and costs, a contract solution is almost always readily available.
One or more parties should commission a lawyer to prepare a customised written contract. This is because unlike IP law, with contract law no short summary can be given for the type of required contract and its wording. With contracts there are simply too many variables - legal, managerial, operational and economic. Given the variables often it helps greatly if the lawyer has experience with the relevant industry.
The costs of preparation of a contract vary between situations. It may cost as little as $1,200 to prepare an appropriate contact between collaborators, eg a services agreement with assignment of all IP rights or a software development agreement with an exclusive IP licence of rights, eg for a specific party, territory, duration and subject matter.
The bottom line is that contract preparation legal costs are almost always a lot less than disputes.