Protecting IP When Hiring in Malta: A Contract Checklist

IP needs attention in Malta because ownership is not uniform. Maltese law splits the question by type of work, and each statute has its own default. A contract that only says the company owns everything the employee does may be enforceable, but a contract that says nothing leaves ownership of designs, written content, marketing material and similar work with the person who made it.

Many of the companies that hire in Malta build products that are mostly IP: iGaming platforms, fintech systems, software, and technical content. For them, the value of a hire is the code, the models, the documentation and the know-how. Investors and acquirers will ask how that IP reached the company, and a missing assignment is expensive to fix after the employee has left.

The legal starting points are the Copyright Act (Cap. 415), the Patents and Designs Act (Cap. 417) and Malta’s trade secrets legislation. Full texts are on legislation.mt. Contract terms then sit on top, subject to the Employment and Industrial Relations Act (Cap. 452), which sets the framework every Maltese employment contract must fit within.

Under article 11 of the Copyright Act (Cap. 415), the author of a work is its first owner. There is one important exception for employers. Where a computer program or a database is made by an employee in the course of employment, the economic rights pass to the employer automatically, unless the parties agree otherwise.

That default helps software companies, but it has limits. It covers computer programs and databases only. Written documentation, user interface artwork, videos, training material, photographs and marketing copy fall outside it, so the author keeps those rights unless the contract assigns them. The default also depends on the work being made in the course of employment. Code written on a weekend for a personal project is harder to claim.

• Assign all copyright in work made in the course of employment, naming the main types of work
• Cover future works, so each new piece does not need a separate document
• Ask the employee to sign further documents if registration or enforcement needs them
• Address moral rights as far as the law allows
• Require a list of any pre-existing IP the employee brings, and a licence to use it if it ends up in your product

None of these clauses are exotic in Malta, and a well-drafted Maltese employment contract will usually include them. The point is to check they are there before the start date.

Inventions made in the execution of an employment contract belong to the employer under article 11 of the Patents and Designs Act (Cap. 417), unless the employer and employee agree otherwise in writing. If the job involves inventive work, such as research, engineering or product development, the employer is the owner of the resulting inventions by default.

Grey areas arise when an employee invents something related to the business but outside their normal duties, or uses company time and equipment for a side project. The contract should define what counts as work made in the course of employment, require prompt disclosure of inventions, and set out how the company will handle anything that falls outside the job.

Design work is worth addressing separately. Product designs, packaging and hardware layouts can carry their own rights, and a general reference to inventions may not cover them clearly. Listing designs in the assignment clause avoids the argument.

If patents matter to your business, have a Maltese IP lawyer review the invention clause. The drafting is short, but the consequences of getting it wrong can be large.

Malta protects trade secrets under legislation implementing the EU Trade Secrets Directive (2016/943). Recent commentary cites this as the Trade Secrets Act, Cap. 589, so confirm the current reference with your lawyer before quoting it in a contract. The law lets a business act against unlawful acquisition, use or disclosure of information that is secret, has commercial value because it is secret, and has been protected by reasonable steps.

That last condition is the one employers control. A court will look at what you did to keep the information secret. A confidentiality clause in the employment contract is the minimum. Access controls, labelled documents, a clear information security policy and exit procedures all show that the steps were reasonable.

Confidentiality duties should survive the end of employment and should name the types of information covered: source code, client lists, pricing, product plans, algorithms and so on. Employees also keep the right to use their general skill and experience, so do not try to stretch the clause over everything they learned.

Exit is the moment of highest risk. Plan the last week: recover laptops and phones, revoke system access on the final day, remind the employee in writing of their continuing confidentiality duties, and ask them to confirm they have returned or deleted company files. In Malta the employer must also file the Jobsplus termination form within 4 days, so it helps to run the IP steps from the same checklist.

Non-compete clauses can be enforced in Malta, but only if they are reasonable. There is no specific statute. Maltese courts decide case by case, looking at whether the restraint protects a real business interest and goes no further than needed. A clause that bans a developer from working anywhere in technology for years is unlikely to survive.

Reasonable restraints have clear limits on geography and scope, are tied to the role the person actually did, and carry a proportionate penalty. A restraint of about one year for non-competes and about two years for non-solicitation of clients or staff has been considered by the courts, though every case turns on its facts. The absence of any payment to the employee during the restraint period counts against enforcement, so some employers offer compensation to strengthen the clause.

Non-solicitation and non-dealing clauses are usually easier to defend than a broad non-compete, because they target the real risk: an employee taking clients or colleagues. For many roles, a strong confidentiality clause plus a targeted non-solicit gives better protection than a wide ban that a court may strike down.

Get Maltese legal advice before relying on a restraint for a senior hire. Drafting it to fit the role at the start costs far less than arguing about it after the person has resigned.

When you hire through an Employer of Record, the EOR is the legal employer in Malta, so the statutory defaults give the EOR the employer’s rights first. A good EOR contract deals with this in two places. The employment contract assigns the employee’s IP to the EOR, and the services agreement between the EOR and your company passes those rights straight on to you, with confirmation that the EOR claims no interest in them.

With Employer of Record Malta, this chain is built in. Our own Maltese company issues the employment contract with assignment, confidentiality and, where appropriate, restraint clauses, and our client agreement transfers the resulting IP to you. You can read more about how our Malta EOR service works, including how contract terms are agreed before the offer goes out.

Contractors are a separate risk. The employer defaults in the Copyright Act and Patents and Designs Act apply to employees. A freelance developer owns their code unless the contract assigns it. If a contractor relationship in practice meets at least 5 of the 8 criteria in the Employment Status National Standard Order, the person is legally an employee anyway, with the tax and social security exposure that follows. Our guide to employee misclassification in Malta explains the test.

• Check the employment contract assigns all work types, beyond software alone
• Confirm the EOR agreement transfers IP to your company
• Record pre-existing IP and any licences at onboarding
• Use targeted restraints that match the role
• Collect devices and revoke access on the last working day