Protecting IP When Hiring in Portugal: Code, Inventions and Contracts

It depends on the type of work, and Portugal answers each type in a different statute. Software written by an employee in the course of their duties belongs to the employer by default. Other copyright works are presumed to belong to the person who created them unless the agreement says otherwise. Patentable inventions have their own regime in the Código da Propriedade Industrial. Confidential business information is protected by a statutory duty of loyalty while the person is employed, and by trade secret law afterwards.

The pattern matters for employers arriving from other systems. A clause borrowed from a US contract, assigning everything conceived during employment as work made for hire, does not import the American rule into Portuguese law. Where the clause is silent, incomplete or too vague about the employee’s duties, the Portuguese default fills the gap, and the default sometimes leaves the rights with the employee.

Two practical consequences follow. First, the contract should deal with each category separately rather than in one sweeping sentence, because a sentence that works for code does not necessarily work for a training course or a product illustration. Second, the employee’s duties should be described in enough detail to cover what they will actually produce, since several of the statutory defaults turn on whether the work was created in the performance of those duties.

Yes, in most cases, without needing a clause at all. Article 3(3) of Decreto-Lei 252/94, the statute that protects computer programs in Portugal, gives the economic rights in a program created by an employee in the course of their duties, on the employer’s instructions, or on commission, to the recipient of the work, unless the parties have agreed otherwise or the purpose of the contract implies otherwise.

Two further rules sit alongside it. Article 3(2) presumes that a program produced inside a company is a collective work, which keeps ownership with the organisation rather than splitting it between contributors. Article 3(5) disapplies the purpose limitation that article 15(2) of the Copyright Code would otherwise impose, so software is not confined to the use the parties had in mind when the person was hired. Article 3(4) preserves a right to special remuneration in the defined cases where the Copyright Code allows one.

The gap to watch is scope. The default covers the program, and modern products are rarely only a program. Interface designs, illustrations, documentation, training material, marketing assets, curated datasets and the brand itself are protected elsewhere, and none of them inherits the software rule. An express assignment covering every category of work product, together with a duties description broad enough to match the role, closes that gap without argument.

Copyright in Portugal starts with the creator. Article 14 of the Código do Direito de Autor e dos Direitos Conexos makes ownership of a work created under an employment or service contract a question for the agreement between the parties. Where there is no agreement, ownership is presumed to belong to the person who created it, which for an employer means that silence is a loss rather than a neutral outcome.

Where the rights do stay with the creator, article 15 limits the employer’s use of the work to the purposes the parties agreed, and changes to the work need the creator’s consent. That is a difficult position for a company that wants to rework a brand, edit a video, translate a course or extend a design several years after it was made.

Article 14(4) adds a right to special remuneration for the creator in two situations: where the work created clearly exceeds what the job called for, and where it is used in ways that were not foreseen when the pay was fixed. A well-drafted contract deals with both by describing the creative output the role is expected to produce and by making the assignment cover all known and future uses, so that use of the work is not something the employer has to renegotiate later.

Article 58 of the Código da Propriedade Industrial, Decreto-Lei 110/2018, governs inventions made by employees of private companies. Where inventive activity forms part of the job, the right to the patent belongs to the company. Where that activity is not specially paid for, the inventor is entitled to remuneration reflecting the importance of the invention, which is a statutory entitlement rather than a discretionary bonus.

A second situation is easy to overlook. Where an invention falls within the company’s field of activity but outside the employee’s own duties, the company holds a right of option over it, exercisable against payment. Timing is tight on both sides:

• the inventor informs the company within 3 months of completing the invention, or within 1 month of filing a patent application;
• the company then has 3 months to exercise its option;
• the company loses the right if the remuneration is not paid in full and on time;
• an invention filed within 1 year of the inventor leaving is deemed to have been made during the employment;
• disputes go to arbitration, and the inventor cannot waive these rights in advance.

That last pair of rules is the reason an engineering or research hire deserves more than a standard template. The one-year rule protects a company against an employee who waits until the notice period ends before filing, while the ban on advance waiver means a contract cannot simply sign the inventor’s entitlements away. A simple disclosure procedure, with a named recipient and a logged date, is usually enough to keep the three-month clocks visible on both sides.

During employment, protection comes from the law itself. Article 128(1)(f) of the Código do Trabalho imposes a duty of loyalty that includes not disclosing information about the employer’s organisation, production methods or business. Breach of that duty is a disciplinary matter, and in serious cases it can support dismissal for just cause.

After the contract ends, the statutory duty falls away and two other sources take over. The first is the contract: a confidentiality clause that is expressed to survive termination, defines the categories of information covered and deals with the return or deletion of materials and accounts. The second is trade secret law, in articles 313 and following of the Código da Propriedade Industrial, which transpose the EU trade secrets directive of 2016. Article 313 defines what qualifies as a protected secret and article 314 lists the unlawful acts, including breach of a confidentiality agreement or duty.

Trade secret protection depends on the information having been treated as secret, so the practical work is operational rather than legal. Access limited to the people who need it, offboarding that removes accounts on the last day, and documents marked and stored as confidential are what make the statutory protection usable if it is ever needed.

Personal data is a separate regime and should not be folded into the same clause. The GDPR applies in Portugal, supplemented by Lei 58/2019, whose article 28 covers employment relationships, and the supervisory authority is the CNPD.

They are, within limits, and only if the employer pays for them. Article 136 of the Código do Trabalho makes a clause restricting the employee’s activity after the contract ends void unless three conditions are met: it is in writing, in the contract or in a termination agreement; the activity to be restricted could genuinely cause harm to the employer; and the employer pays compensation for the period of the restriction. The compensation can be reduced to reflect significant training costs the employer paid for.

The maximum duration is 2 years. It extends to 3 years for roles of particular trust, or with access to information that is particularly sensitive from a competitive point of view. Where the employer dismissed the person unlawfully, or the employee resigned with just cause, the compensation increases to the base salary in force at termination, and what the person earns from other work after the contract ends is deducted from what the employer owes.

The tax treatment surprises people. Money paid for accepting an obligation not to compete is not employment income. It falls into category G, incrementos patrimoniais, under article 9(1)(d) of the IRS code, which covers amounts received for assuming non-compete obligations whatever their source or form. It is taxed with the individual’s other income at the general rates and reported by the payer on the annual Modelo 10 under code G, which means payroll is the wrong place to process it without advice.

Because the clause has to be paid for, it is worth reserving for the roles that need it rather than including it in every contract. Where the risk is the loss of confidential information, a surviving confidentiality clause costs nothing and protects more. Where a departure is already in progress, the compensation and the restriction belong in the termination documents, which our guide to terminating employment in Portugal covers alongside notice and severance.

The contract should answer each of the Portuguese defaults in turn, in language that matches the role rather than a global template. A workable set of clauses covers:

• a duties description wide enough to cover what the person will actually create;
• an assignment of copyright and related rights in every category of work product, for all known and future uses;
• confirmation of the software position and of ownership of associated designs, data and documentation;
• an invention disclosure procedure with a named recipient, matching the three-month periods in article 58;
• a confidentiality clause that survives termination, with return and deletion of materials;
• a non-compete only where the role justifies one, with the duration and the payment written in;
• who owns the equipment, which also has to be settled in the written agreement where the person works remotely.

All of it has to be in Portuguese employment law terms, because that is the law that will apply to an employee working in Portugal, whatever the contract says about governing law. That is the point where companies without a Portuguese entity usually decide how to hire. As Employer of Record Portugal, we employ the person through our own Portuguese company and issue a compliant contract that carries the assignment, confidentiality and invention wording the role needs, so the rights in the work sit where your business needs them.

Contracts are usually ready within hours and onboarding typically takes one to two days for EU nationals once we have the details, on a flat fee of €499 per employee per month. Our EOR services in Portugal page sets out what is included, and if you are comparing providers our guide to the best EOR provider in Portugal lists the questions worth asking about contract drafting before you sign.