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Who says lightning never strikes twice? We were recently asked to assist a client whose ex-employee appeared to have taken company intellectual property (IP). We soon realised that we had advised the same client on a similar matter a few years earlier, when this same ex-employee’s previous employer had accused him of doing the same thing to them!

Businesses need to be proactive when it comes to safeguarding their assets. So what can employers do to guard their valuable business assets?

time to get proactive

We have put together a list of some measures businesses should consider implementing from an employment and IP perspective:

  1. Trade mark and domain name protections – sometimes disgruntled ex-employees will seek to sabotage their former employer by registering trade marks or domain names that resemble their former employer’s brands. Having trade mark registrations in place makes it much harder for an ex-employee to register their own similar trade marks. Trade mark registrations also open the door to the UDRP or auDRP mechanisms to counter cybersquatting and take control of domain names without having to go to court.
  2. Workplace policies – ensuring internal policies are up to scratch is a simple way of providing employers with the ability to monitor employee conduct. For example, an IT policy which focuses on allowing businesses to monitor employee emails and downloads, as required. If any concerns exist, emails, downloads and printouts should be monitored in the lead up to employee departures, and potentially even other steps taken to prevent documents being downloaded to USB memory devices.
  3. Employee exit interviews – completing thorough exit interviews is a great way to remind departing employees of their obligations which continue post-employment to keep information they have acquired during the course of their employment confidential and not disclose it to any one, particularly their new employer.
  4. Managing relationship transition – if the employee is responsible for contact with customers or clients, having a plan to contact those clients and manage a hand-over to a new primary contact. This should pre-empt any opportunity that the employee may otherwise have to contact them about their departure.
  5. Gardening leave – broadly, depending on the terms of the employment agreement, this option allows businesses to direct an employee to serve their notice period without working. Although the employee remains employed during such period, they are removed from the operation of the business.
  6. Deeds of confidentiality and restraint – requiring employees to sign a suitable deed will strengthen legal protections should an employee leave and misuse confidential information, either unilaterally or with a new employer.

employee obligations

Regardless of business practices, employees must comply with relevant obligations which they owe to their employer, such as:

  • Contractual requirements – including with respect to confidential information and IP, and potentially post-employment non-competition, non-solicitation and non-dealing restrictions (if enforceable).
  • Fiduciary duties – these are duties that may apply outside an employee’s express contractual obligations, including not to misuse confidential information gained in their position of employment.
  • The Corporations Act 2001 (Cth) – imposes a form of confidentiality obligation, specifically that employees (and directors and other officers) of a corporation who have obtained information as a result of their role must not improperly use the information to gain an advantage for themselves or another person or to cause detriment to the business.

If you suspect an employee has breached any of these obligations, there are remedies available, including the potential for an injunction against the employee preventing them from working for another employer or requiring them to return confidential information.

we are here to help

There is no better time to implement these practical steps to protect your business. If you require assistance understanding how you can best protect your business from an IP and employment perspective, please contact our Intellectual Property or Employment, Safety and Migration teams.

stay up to date with our news & insights

from IP to trade secrets, how to protect your business’ valuable assets

16 April 2021
nils versemann adam foster

Who says lightning never strikes twice? We were recently asked to assist a client whose ex-employee appeared to have taken company intellectual property (IP). We soon realised that we had advised the same client on a similar matter a few years earlier, when this same ex-employee’s previous employer had accused him of doing the same thing to them!

Businesses need to be proactive when it comes to safeguarding their assets. So what can employers do to guard their valuable business assets?

time to get proactive

We have put together a list of some measures businesses should consider implementing from an employment and IP perspective:

  1. Trade mark and domain name protections – sometimes disgruntled ex-employees will seek to sabotage their former employer by registering trade marks or domain names that resemble their former employer’s brands. Having trade mark registrations in place makes it much harder for an ex-employee to register their own similar trade marks. Trade mark registrations also open the door to the UDRP or auDRP mechanisms to counter cybersquatting and take control of domain names without having to go to court.
  2. Workplace policies – ensuring internal policies are up to scratch is a simple way of providing employers with the ability to monitor employee conduct. For example, an IT policy which focuses on allowing businesses to monitor employee emails and downloads, as required. If any concerns exist, emails, downloads and printouts should be monitored in the lead up to employee departures, and potentially even other steps taken to prevent documents being downloaded to USB memory devices.
  3. Employee exit interviews – completing thorough exit interviews is a great way to remind departing employees of their obligations which continue post-employment to keep information they have acquired during the course of their employment confidential and not disclose it to any one, particularly their new employer.
  4. Managing relationship transition – if the employee is responsible for contact with customers or clients, having a plan to contact those clients and manage a hand-over to a new primary contact. This should pre-empt any opportunity that the employee may otherwise have to contact them about their departure.
  5. Gardening leave – broadly, depending on the terms of the employment agreement, this option allows businesses to direct an employee to serve their notice period without working. Although the employee remains employed during such period, they are removed from the operation of the business.
  6. Deeds of confidentiality and restraint – requiring employees to sign a suitable deed will strengthen legal protections should an employee leave and misuse confidential information, either unilaterally or with a new employer.

employee obligations

Regardless of business practices, employees must comply with relevant obligations which they owe to their employer, such as:

  • Contractual requirements – including with respect to confidential information and IP, and potentially post-employment non-competition, non-solicitation and non-dealing restrictions (if enforceable).
  • Fiduciary duties – these are duties that may apply outside an employee’s express contractual obligations, including not to misuse confidential information gained in their position of employment.
  • The Corporations Act 2001 (Cth) – imposes a form of confidentiality obligation, specifically that employees (and directors and other officers) of a corporation who have obtained information as a result of their role must not improperly use the information to gain an advantage for themselves or another person or to cause detriment to the business.

If you suspect an employee has breached any of these obligations, there are remedies available, including the potential for an injunction against the employee preventing them from working for another employer or requiring them to return confidential information.

we are here to help

There is no better time to implement these practical steps to protect your business. If you require assistance understanding how you can best protect your business from an IP and employment perspective, please contact our Intellectual Property or Employment, Safety and Migration teams.