Ownership of Employee-Developed “Work Formats” After Resignation (Philippine Legal Perspective)
This article is for educational purposes and does not constitute legal advice. For situation-specific guidance always consult Philippine counsel.
1 What exactly are “work formats”?
In daily HR and IP practice the term usually covers any internally-created template, process map, slide deck, checklist, workflow diagram, spreadsheet model, software framework or other repeatable structure an employee designs so that the company can do a task faster or more consistently. In law these artefacts may be protected as:
- Copyright works (literary, artistic or computer programs)
- Patents / utility models / industrial designs (if the format embodies a technical solution or layout)
- Trade secrets or confidential business information (know-how, methods, data sets)
2 Core statutory framework
| Field | Key Provisions | Ownership Default |
|---|---|---|
| Copyright | R.A. 8293 (“IP Code”) §178.3: work made in the course of employment | Employer owns economic rights if creation is part of regular duties unless a contract says otherwise. Employee keeps moral rights (credit & integrity). |
| Patents / Utility Models / Industrial Designs | IP Code §§30–32, 55 | Employee-inventor owns unless (a) invention made in the course of employment and pursuant to the employer’s assigned tasks, or (b) there is an express assignment. Employer in case (a) owns, but inventor may receive “equitable remuneration.” |
| Trade Secrets | No stand-alone statute; protected by Art. 1157 Civil Code (quasi-delict), Art. 19 & 26 Civil Code (abuse of right), Art. 292 Revised Penal Code (disloyalty of employee), IP Code §168 (unfair competition) | Employer (or data owner) holds protectible interest if reasonable secrecy measures exist. |
| Data Privacy | R.A. 10173 (Data Privacy Act) | Personal data within a format is regulated; rights follow data subjects and controllers. |
| Labor & Civil obligations | Labor Code Art. 294 (d) (loss of trust), Civil Code Art. 1701 (fidelity) | Employee owes fiduciary & confidentiality duties during employment and may remain liable for post-employment breaches (see §6). |
3 Copyright: “work made for hire” under Philippine law
Employment vs Commission: Section 178.3 splits works into:
- (a) Made in the course of employment – employer owns economic rights.
- (b) Commissioned work – creator owns unless there is a written, signed assignment.
Scope test: Courts look at job description, control (tools, schedule), and whether creation was part of regular duties. A format improvised entirely on the employee’s own time and resources is not within the scope.
Moral rights survive forever in the employee-author (e.g., right to be credited or to object to derogatory edits). Employers therefore need a moral-rights-waiver (allowed under §34 IP Code) if they want total control.
After resignation: If economic rights already vested in the employer, the departed employee cannot exploit or sell the same format, but retains moral rights unless waived. If rights remained with the employee (e.g., side-project), the employer may need a backdated license or assignment.
4 Inventions, utility models & industrial designs
Presumption differs: IP Code §30 says rights belong to the inventor.
Two statutory exceptions give ownership to the employer:
- Task-related inventions – created during working hours, using employer resources, and within the employee’s assigned duties (e.g., an R&D engineer hired to design a production line).
- Contractual assignment – a signed IP clause or separate Deed of Assignment.
Equitable remuneration: If exception 1 applies, the employee “shall be entitled to equitable remuneration … taking into account the employee’s salary and the economic value of the invention.” (IP Code §30.2) In practice this is often an inventor-bonus policy.
Patent filings — timing: Philippines follows “first-to-file”; employers must file within one (1) year of public disclosure to preserve rights worldwide (§25).
Resignation scenario:
- If invention was employer-owned, resignation does nothing—former employee must assist in prosecution if the contract says so.
- If employee-owned, the ex-employee is free to patent/licence provided no trade-secret or non-compete violation exists.
5 Trade secrets & confidential formats
Unlike the U.S. Uniform Trade Secrets Act, the Philippines relies on a patchwork of Civil Code duties and unfair-competition provisions:
| Element | What the employer must show |
|---|---|
| Secrecy measures | NDAs, limited access folders, clear “CONFIDENTIAL” markings, policy trainings. |
| Economic value | The format/process gives competitive advantage. |
| Reasonable effort to keep secret | Passwords, need-to-know, exit interviews retrieving copies. |
Post-employment duty: Even without a non-compete, using or disclosing a former employer’s trade secret is actionable (injunction + damages); possible criminal liability under Art. 292 RPC for “revelation of industrial secrets.”
6 Contractual tools and post-employment restrictions
- IP-assignment clause: “All intellectual property created within the scope of employment or using Company resources is hereby assigned …”
- NDA/Confidentiality clause: Survives beyond separation; typical carve-out for information in public domain.
- Non-compete clause: Valid only if reasonable in time & geography, and indispensable to protect legitimate business interests (SC cases: Rivera v. Solidbank, G.A.R. Philippines v. Paras). Over-broad bans are void.
- Exit clearance: Return devices, delete cloud copies, sign certificate of no-IP claims.
- IP policy & inventor incentive scheme: Encouraged by IPOPHL; helps show equitable remuneration and clarity.
7 Philippine jurisprudence snapshot
| Case | Gist / relevance |
|---|---|
| Ching v. Salinas (G.R. 174215, 23 Feb 2011) | Trade-secret misappropriation by ex-employees may justify both civil damages and criminal indictment for unfair competition. |
| Design Coordinates, Inc. v. SIDC (G.R. 197522, 5 Jan 2022) | Clarified that the person who pays for a commissioned architectural design does not automatically own derivative economic rights unless the contract expressly assigns them—applied to works made by consultants, but logic parallels employee formats. |
| Asia Brewery, Inc. v. Court of Appeals (G.R. 103543, 5 Dec 2007) | Packaging get-up deemed company property; former marketing manager’s competing use restrained under unfair-competition theory. |
| Birkenstock Orthopaedics v. Phil. Shoe Expo (G.R. 194307, 13 Aug 2019) | Recognised trade-dress/trade-secret overlap; stressed need for “conscious effort” to maintain secrecy—vital for employers arguing ex-employee theft. |
Note: Supreme Court decisions directly on employee-developed software templates remain scarce; courts analogise from these unfair-competition and copyright cases.
8 Interface with Data Privacy Act
If a format contains personal data (e.g., HR onboarding templates with employee info), the employer is the “personal information controller” and must ensure:
- Lawful processing (consent, contract, legal obligation, etc.)
- Secure disposal after an employee leaves. Ex-employees retaining copies could face penalties under §§25–34 DPA.
9 International treaties & cross-border work
- Berne Convention – automatic copyright protection recognised in 181+ countries.
- Paris Convention – national treatment for patents; employee-inventor abroad may still need to assign rights to PH entity to maintain consistency.
- TRIPS – minimum standards; enforcement provisions guide Philippine courts to award actual plus moral damages and attorney’s fees.
10 Practical compliance checklist
For employers
- Define scope of duties in job descriptions—tie creative work to official functions.
- Issue an IP Policy (IPO-endorsed) requiring immediate disclosure of inventions/formats.
- Use three documents: Employment Contract + IP Assignment + NDA (or an omnibus).
- Implement secrecy controls: rights-managed repositories, audit logs, off-boarding wipe.
- Offer inventor rewards to motivate disclosure and avoid “garage patents.”
- Register eligible works (copyright deposit, patent filing, trademark for get-up).
For employees
- Read IP clauses before signing; negotiate ownership or revenue-share if you will create.
- Keep private projects separate (devices, accounts, off-hours).
- Document personal contributions—could support residual rights after exit.
- During exit, clarify which materials are personal vs company property and secure moral-rights acknowledgement if desired.
11 Enforcement & remedies
- Administrative: IPOPHL’s Intellectual Property Rights Division (IPD) – faster and cheaper (180-day decision goal).
- Civil: RTC – Special Commercial Courts → injunction, impoundment, actual + moral + exemplary damages, attorney’s fees.
- Criminal: Art. 292 RPC (up to 5 years imprisonment), IP Code §§216–217 (copyright), §84 (patent).
- Customs & border measures: IP Code §§118–124 to seize infringing copies being imported by ex-employees turned competitors.
12 Conclusion
Ownership of work formats after an employee’s resignation hinges on (i) the IP category, (ii) statutory defaults, and above all (iii) clear contractual allocation and secrecy practice. Philippine law generally favors the employer for copyright (when the creation falls within regular duties) but favors the employee-inventor for patents (absent a task-related exception or assignment). Trade secrets remain protectible only if prudently guarded. By addressing these issues up-front—through written assignments, inventor incentives, and robust exit procedures—both employers and employees can avoid the costly litigation that so often follows a talented creator’s departure.