Contractors’ Questions: How to get my Intellectual Property protected when IT contracting via an umbrella company?

Contractor’s Question: I'm a programmer in-between IT contracts, whose only ever worked inside IR35, but in the future I want to focus a lot more on my brand.  

Specifically, I want to start producing and monetising my own products through a limited company but the inside IR35 contracts I’m au fait with insist on using an umbrella company. And those umbrellas have boilerplate agreements, including regarding Intellectual Property (IP).  

When bringing up IP with umbrellas, they are disinterested, and so it remains unclear to me what IP contract I would need in place. Would such an agreement be between me and the umbrella, me and the agency, or me and the end-client?  

For the record, I have spoken to a couple of IP lawyers and even paid to have contracts reviewed, but I'm yet to find an IP lawyer who deals with IR35 as well. 

Am I beating my head against a brick wall here? Am I better off just focusing purely on outside contracts, and forgetting my dreams!? 

Expert’s Answer: Yes, you are unlikely to get anywhere with an umbrella company, insofar as they will have no interest at all in your Intellectual Property terms. And nor need the umbrella have any interest in your IP. The only party that could infringe any IP you may have is the party to whom you provide the actual work -- the end-client. 

IR35 and IP  

You mention IR35, but IR35 has no bearing at all on this issue. The IR35 rules affect how your company is paid. 

So what can you do to protect your IP given that most clients want the IP in work-done for them to be protected, as a minimum requiring that they (the client) has the benefit of all work done for it? 

First, you should identify those elements that you own the rights in and which you want to protect. Your ‘brand’ would not normally come into this unless the client wants to use your brand identity, as brand is normally protected under copyright rules, requiring no additional protection.  

That said, I would always recommend trademarking your brand.  

What about other IP rights?  

If you have developed something, e.g. a system (in which you have rights), other than as part of the client’s work and want to allow the client to use it, the correct process would be to licence use of the system on terms that protect the IP, limiting its use to the client and on terms set by you.  

Work conditional on the licence  

Since the system would not be provided to the umbrella company or an involved agency, you should ensure that the client agrees to the licence before any other work is undertaken, making the work conditional on the licence being agreed.  

This should have no bearing on the payment arrangements or contract with the umbrella company or agency involved, other than to the extent the client needs to know that working for the client will be conditional on the licence being agreed. If the client is to be allowed to use your brand, then this should be included in the licence. 

Recommendations 

So my recommendation is that you get a licence agreement drawn up; tell the umbrella and any agency that the provision of your services will always be conditional on prior agreement by the client to the licence, and your rights should then be fully protected provided your agreement is concluded directly with the client. 

Incidentally, existence of the licence and your activity in providing related work would be evidence supporting that the arrangement is outside IR35. Good luck! 

The expert was lawyer Adrian Marlowe, CEO of recruitment law firm Lawspeed, and chair of The Association of Recruitment Consultancies.