Are employers required to report intellectual property theft to the owner of the IP?

Question

Let’s say company A hires an employee from company B. Unbeknownst to company A, the employee steals IP when they leave company B and incorporates it in their work for company A. If later company A becomes aware of the actions of the employee and that some of their own IP is based off of company B’s IP, are they required to inform company B of the employee’s actions?

Ex: An employee brings a design model from their previous employer and includes it in work for their new employer. A coworker discovers the true origin of the cad model and informs a supervisor. At this point the stolen cad model has been used to build off of and the employer has profited from the stolen IP. What is the new employer required to do if anything?

Answer 1

Under U.S. law, absent some express contractual obligation of Company A with Company B, or a relevant court decree, or disclosure obligation arising in the context of a lawsuit brought by Company B against Company A, there is no general affirmative duty to pro-actively disclose the use of Company B's intellectual property on the part of Company A.

It will often be prudent for Company A to take some actions to mitigate its exposure to liability to Company B if its unauthorized use of Company B's intellectual property s ever revealed. But it doesn't have to self-incriminate itself (even though entities have no right to be free of self-incrimination).

Other countries might have other disclosure requirements. There are more than one hundred relevant jurisdictions and I certainly don't pretend to know the law in all of them.