Understanding Intellectual Property Rights in the Workplace – Who owns the IP Rights?

In today’s fast-paced, innovation-driven work environment, employees are encouraged to think creatively and develop new ideas. With digitalization accelerating change through technologies like AI, machine learning, blockchain and predictive tools, both work and personal lives are being transformed. But when an employee creates something innovative while working for a company, a key question arises: who owns the intellectual property—the employee or the company

General Rule – IP Ownership

As a general principle, the employer owns the intellectual property (‘IP’) rights to creations made by employees in the course of their employment. This is based on the understanding that the employee is hired to carry out specific tasks and responsibilities, which often include the development of new ideas and innovations.

However, there are exceptions to this rule. For instance, if the employee and employer conclude a separate agreement  to define IP ownership differently from the general principle, or if  IP was created entirely outside of working hours and without the use of company resources, the employee may retain the IP rights.

Regardless of ownership, moral rights are always reserved to the original author, as these rights cannot be assigned or transferred to third parties.

 Impact of Agreements on IP Ownership

While employers own IP created during the course of employment under the general rule , subject to certain exceptions, this can be further clarified or modified through various agreements entered into between the employer and employee. These agreements, separate from the core employment contract, can significantly affect IP ownership:

1. Employment Agreements: While focused on terms and conditions of employment, these may include general provisions on IP ownership.

2. Non-Disclosure Agreements (‘NDA’s): These require employees to maintain confidentiality over proprietary information and ideas developed during their employment.

3. IP Assignment Agreements: These are separate agreements in which employees formally assign any IP rights in their creations to the employer, providing clearer legal ownership and reducing ambiguity.

These agreements help ensure that both parties have a mutual understanding of IP rights and obligations, minimizing disputes down the line.

UAE Law and Practice: Who Owns What?

Understanding how IP rights are handled under UAE law adds important context to the employer-employee IP dynamic. Article 28 on titled Author’s Economic Rights in His Relationship with Third Parties of Federal Decree-Law No. 38 of 2021 on Copyright and Neighbouring, lays out clear rules on IP ownership in employment settings.

The article reinforces the importance of defining IP terms in employment and related agreements, while also recognizing the contributions of individual creators within a corporate setting.

Unless otherwise agreed in writing, the law provides the following guidelines:

1. Commissioned Works: If an author creates a work at the request or for the benefit of another person, the copyright is attributed to that person.

e.g. an author or creator may enter into a contract with some independent party for the purpose of preparing a work for this third party. For example, the Ministry of Environment may commission a competent person inside or outside the country to prepare a work concerning the issue of Climate Change. In this case, such relation will be subject to the agreed contractual bond, including all details and terms of the work’s utilization and financial rights. However, if the agreed contract does not include those details specifically, then all financial rights shall be granted to the work’s author who shall be entitled to use his work however he may want, whether it is through the work’s publication or presentation in any form. In all cases, as a basic rule, moral rights shall always be reserved to the author, as they cannot be assigned to other third parties.

2. Employee-Created Works (Related to Work): If an employee creates a work during the course of employment that is directly or indirectly related to the employer’s business—or if the employee uses the employer’s expertise, information, tools or materials to develop the work—then the economic rights belong to the employer. However, the law does acknowledge the employee’s intellectual effort.

e.g. if the author/creator is employed by a government authority or some private employer that has commissioned him to prepare a work for his employer specifically (e.g. preparing a computer software), then, all rights of the work shall belong to those employers automatically. In addition, if an author/creator who is not assigned to prepare a work at his workplace, has used his employer’s resources, tools and means to prepare his work, then, the employers shall be entitled to all rights as well (if they so desire).

The author shall have a margin of freedom, even if it is not permitted by virtue of the new Decree-Law that has stressed the automatic transfer of all financial rights to the public authority or private employer. However, if the latter does not want such rights, the author shall be entitled to use his work. In addition, pursuant to the Second Clause of Article (28), the intellectual efforts of someone shall always be taken into consideration. Therefore, if neither the public authority nor the private employer has expressed their desire to use the work, the author shall be free to use his work.

3. Employee-Created Works (Unrelated to Work): If the creation is unrelated to the employer’s business and the employee does not use any of the employer’s resources or information, the economic rights remain with the employee.

e.g. if the author has prepared his/her work without an assignment by his employer, and without the use of the employer’s resources, tools and equipment, then, the author shall be completely free to use his work without any rights for the employer; and that is even if the work is related to the author’s field of specialization at the public authority or the private employer’s facility. In this sense, most academics usually prepare their works at their educational institutions, without formal permission of the institution; as they may use the institution’s tools and means sometimes, since it is customary to forfeit any rights in favour of the author, to encourage him to use his work freely however he may want.

Avoiding Disputes Through Good Practices

Given the legal framework and Article 28 of the UAE Copyright Law and the role of contracts and agreements, it’s clear that misunderstandings can easily arise if IP ownership is not properly addressed from the outset.

To help prevent disputes and ensure fair outcomes for both employers and employees, the following best practices are recommended:

Why Clear IP Terms Matter

Conclusion

Disputes over ownership of IP created during employment are all too common and often avoidable. By understanding the general rules, knowing how different agreements affect IP rights and following best practices, both employers and employees can better protect their interests.

Problems usually arise when contracts don’t clearly state who owns what. If it is unclear whether an invention or creative work belongs to the company or the employee, confusion can quickly turn into conflict. That is why it is essential for employers to include clear IP assignment clauses in contracts.

Clear terms not only safeguard the company’s rights but also set the right expectations for employees. When everyone understands where they stand, it reduces misunderstandings, promotes transparency and builds a healthier working relationship around innovation and creativity.

This article was verified by AIPPI UAE Group and national communications committee member, Ms. Mona Saleh.