June 9, 2015
From Employment Law Daily Wrap Up-Strategic Perspectives

By Pamela Wolf, J.D.

In the current environment of an increasingly mobile workforce, employers face real challenges to their ability to protect intellectual property. Greater employee turnover, increasing use of independent contractors, and the sheer volume and ease with which IP can be transferred all contribute to the problem, according to a panel of Polsinelli attorneys who discussed these and other challenges. Among the most important questions that employers must answer are what exactly qualifies as IP and who owns it? And, of course, employers must make sure they protect it.

Independent contractors. Independent contractors present a problem in that they are using their expertise not just for your company, but for their other clients as well, observed Polsinelli ShareholderJim Swartz, who works in the firm’s Atlanta office. Employers need to think about what steps they can take to “cabin” IP information that is accessible to independent contractors, as well as to clarify understanding about exactly who owns what, Swartz suggested.

Adam Weiss, a shareholder in Polsinelli’s Chicago office, added that it’s important for independent contractors to know that they also represent the company—customers, after all, really can’t tell who is an independent contractor and who is an employee. With that in mind, employers should make sure that independent contractors understand what the company is about and what is the company’s IP. Weiss suggested that companies use a clear written agreement that states who owns what: what the independent contractor has developed and what the company has asked the independent contractor to develop.

Social media questions. Social media has become an increasingly important means of communication for companies and their employees, which gives rise to the question of to whom the information on social media belongs, Polsinelli Shareholder Karen Glickstein pointed out. It’s hard for an employer to protect a customer list when the same information is available on a LinkedIn page (perhaps via “connections”), she observed. Shareholder Steve Fox, who practices in the firm’s Dallas office, said he doesn’t see companies litigating over the secrecy of customer lists because of social media, but rather the secrecy of the customer relationship, such as how much business the company does with that customer.

Glickstein also cited a few court cases that exemplify some of the social media issues facing employers, such as whether an executive can take his Twitter handle and followers with him when he leaves (Phone Dog v Kravitz); who owns websites, blogs, and online content (Artis Health v Nankivell); who owns a mixed personal and professional social media account that may be considered an asset of the company because it’s been used to promote it (In re CTI, Inc); and who owns an employee’s LinkedIn account (Eagle v EdComm, Inc).
Most of these issues can be dealt with “on the front end,” according to Swartz, by helping employees understand what the company defines ownership to mean and by using written agreements.
Courts are also beginning to see lawsuits raising issues of misrepresentation where social media indicates, incorrectly, that an employee is still affiliated with a company when that is not the case, according to Glickstein. With that in mind, Weiss suggested using exit agreements that incorporate an agreement that the company owns the marks and employees cannot use them when they leave the company. Companies can obtain the same agreement during the hiring process, Fox added.

Polsinelli's annual Labor, Employment and Employee Benefits conference titled "Taking the Lead: Legal Strategies to Break Away from the Pack, took place on June 3, 2015 at the Chicago Botanical Gardens in Glencoe, Illinois. To view more information about the event, click here.

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