Businesses across all industries are increasingly gathering dynamic and agile thinkers to brainstorm ideas at hackathon events.  These are short-duration, high-intensity think-tank sessions, aimed at solving problems or generating ideas to take the business to the next level, sometimes with prizes or bonuses awarded for the best ideas.  But there’s one important hack to use before the hackathon starts, to ensure that everything goes smoothly after the event.

One of the central concepts of hackathons is that the clever thinkers who come together and think up the good ideas may not be usually employed in those areas.  In this way, hackathons aim to harness the latent creativity of a range of people across organisations and industries.

We are increasingly hearing of clients and industry groups holding hackathons.  Some of these are in-house events for employees only, and others invite outside participants to also lend their brainpower.  The latest hot topics often revolve around things like artificial intelligence, automation and mobile software apps, but any spark big or small might be all the idea required to create something useful and profitable, or generate efficiencies and innovation within a business.

New ideas mean the potential creation of intellectual property.  For example:

  • Software coders generating code?  That creates copyright.
  • The next top-secret idea to solve an engineering or technical problem the business is facing?  Possibly a nascent patentable invention, and at least a trade secret or confidential information.
  • A new brand concept and marketing campaign set to wow the public?  Trade marks and branding.
  • Updating the shape and appearance of a product?  It’s possibly a new and distinctive design.

Who owns the intellectual property in the work product arising from these events?  After all, the hackathon host generally wants to be able to freely obtain rights to use the work output, but particularly where the event is a collaboration between a number of parties, individual participants might assume that they can also take their innovations with them to the outside world.

In-house hackathons may seek to utilise employees’ talent, but if the innovation is outside the scope of what participants are normally employed to do (or beyond the terms of employment agreements), there is a risk that the company may not own the arising intellectual property.  The default position in Australian law is that an employer will generally own the intellectual property in work product created by employees within the scope of their employment.  This default can be modified in individual employment agreements, for example, to broaden the scope of things which are included.  Australian intellectual property law does not recognise “shop rights” (this may be different in other countries), so using an employer’s resources and equipment to create is not enough, by itself, for an employer to claim ownership of arising intellectual property rights.

The hackathon host or sponsor will also not automatically own intellectual property in the output created by outside, non-employed participants.  If anyone in this category comes up with the next big, profitable idea, there is a real risk of dispute down the track about ownership of rights and royalties.  Some companies hosting or sponsoring hackathons aim to foster collaboration with participants in return for the ability to harness and use the innovation created, but there ought to be a clear, written understanding around who has the right to do what with intellectual property created.

There may be arguments that because the attendees knew the purpose of the hackathon, the host or sponsor organisation therefore implicitly has a licence to use for its own purposes the intellectual property created.  But the best hack to smoothly ensure the ability to use intellectual property created during a hackathon is to make the price of admission a written agreement that deals with the confidentiality and ownership of intellectual property.  This ought to include a written assignment of ownership of intellectual property rights if the host is to own all rights.  Alternatively, if the participants are permitted to take away their ideas for their own future ongoing development, there ought to be a written licence to allow the host to also use the intellectual property, including details around any fees and limitations of use, and good record keeping around who came up with what so that it’s clear who owns what rights.