Whose Knowledge Is It Anyway? - Brief Article

HR Magazine, Oct, 2001 by Dave Patel

Issues of intellectual property (IP) rights in a knowledge economy will take on increasing importance as employers try to establish brands and as employees fight for ownership over information and knowledge. IP rights in the workplace center generally on three issues: work made for hire, non-disclosure/non-compete agreements and trade secret theft.

The U.S. Copyright Office defines work made for hire as "work prepared by an employee within the scope of employment; or a work specially ordered or commissioned in certain specified circumstances. When a work qualifies as a work made for hire, the employer ... is considered to be the author." Recent court cases in this area, including the U.S. Supreme Court's June decision in The New York Times Co. v. Tasini (No. 00-201), have focused primarily on freelancers and could have been resolved with sound employment contracts.

But the changing nature of work in the knowledge economy may spawn an altogether new challenge for employers as employees either create new ways to serve the company and customer better while working within the company or demand ownership over work they have created.

For instance, Fortune magazine recently reported that several Wall Street brokers had set up a web site outside their firm to attract and advise clients. The initial reaction would be that this was a clear violation of Securities and Exchange Commission rules, the site should be shut down and the employees fired. But are not such enterprising employees what you want? What if the top 20 percent of salespeople at a company had their own web sites? Who owns the customer relationship--the employee or the firm? Remember, all of these employees are working to enhance the bottom line of their employers. For all those "customer-centric" companies, is this not the exact behavior you want from your employees?

As the "Inside Job" article on page 64 points out, employers also face competition from entrepreneurial workers who start their own businesses. Many companies use non-compete agreements to discourage this behavior. But, Intel decided to encourage it and reap the benefits. Intel's New Business Initiative may be a sign of things to come as the war for talent continues at least for the next decade. HR professionals may need to reformulate age-old notions of work product ownership to foster employee initiative, thereby increasing employee retention and productivity.

Another concern brought about by technology improvements will be over trade secret theft. The FBI recently arrested two employees of Lucent Technologies on charges that they conspired to steal Lucent trade secrets and pass them on to a telecommunications company controlled by the Chinese government. Though this type of theft is nothing new, emerging technologies have made it easier to transfer proprietary information.

Much of the United States' rule of law is based on respect for property rights, but technology is blurring the lines of ownership in certain instances. The tension between increased monitoring of employees to prevent theft, and allowing more freedom to spur employee creativity may force radical changes in how we view intellectual property.

Dave Patel is the manager of workplace trends and forecasting at SHRM.