September 27, 2017
The old concept of a patent used to be that an individual inventor comes up with a brilliant idea, files a patent alone and sets up a company to commercialize the invention. As technology becomes more complex and cooperation becomes a norm, it becomes much harder to come across a lone inventor. A lot of times, a team of researchers works on a project within a company or research facility. What are the rights of those researchers? How about the rights of the company or research facility? We should distinguish two concepts: inventorship and ownership.
Inventorship in Patent Application – Who Is an Inventor?
In short, the question of inventorship is identifying who came up with the idea.
U.S. patent law views an invention roughly as a two-step process: (1) conception and (2) reduction to practice. An idea is conceived, and the conceived idea is reduced to practice, i.e. a working example is made, or at least enough proof is presented that such a concept can be realized. Without any of these two, an invention is not patentable.
Similarly, a patent application is made up of roughly two parts: (1) claims and (2) specification. Claims describe what ideas are claimed as patentable inventions. They define the scope of the patent rights. Specification describes how such ideas can be realized in practice.
However, when determining who an inventor is, only the conception is relevant. Under U.S. law, an inventor is a person who took part in the conception of the ideas of a patent application. But not everyone who contributes his or her conception to an invention becomes an inventor. The contributed conception must be important enough to be included in a claim of the patent.
Let’s think of an example. An inventor comes up with a patent application for a wooden chair claiming new ergonomic arm rests. She is not a woodworker, so she hires a woodworker to make a prototype chair, with detailed instructions about how the chair should be made. The woodworker suggests to the inventor that a different kind of fasteners commonly used in the industry should be used to secure the legs. In this case, the woodworker is not a co-inventor because the patent claim is not about fastening legs to a chair. The inventor can write in the specification of her patent application about how to fix the legs of a chair as suggested by the carpenter. But as long as it is not in a claim, the woodworker is not a co-inventor.
On the other hand, let’s say the woodworker’s assistant suggests another way of making ergonomic arm rests, and the inventor likes the idea. She then adds a claim to include the assistant’s idea. The assistant then becomes a co-inventor.
Once you are listed as an inventor of a patent, your name is engraved in the patent, as the name of an architect is engraved on the plaque of a building to commemorate the designer. But does the architect own the building? It is a separate question.
Patent Ownership – Who Owns Patent Rights?
The question of ownership is the question of who can enforce the patent rights.
Patent ownership, like any other form of intellectual property, is property. It is like the ownership of a house. An inventor can sell her patent ownership to somebody else, just like she sells her house. Once the ownership is sold, an inventor cannot enforce those patent rights to others. An inventor may also license the patent ownership to a third party, similarly to leasing her house.
Under U.S. law, a patent owner has a right to exclude others from making, using, and selling his or her invention. So once an inventor transfers all her rights to a third party, the inventor cannot prohibit that third party from making, using, and selling the invention. Instead, the third party who purchased the rights now has those rights.
The relationship between an inventor and a patent owner is similar to an architect and a building owner. An architect designs a building, but a building owner has ownership of the building. The name of the architect is forever engraved on a plaque of the building. But unless the architect is also the building owner, the architect cannot use, sell or lease out the building, or evict its tenants.
A tricky situation often arises when an employee working for a company comes up with an idea and patents it. Believing that the idea will be a big hit, the employee may want to quit the job to set up his own startup company. Of course the employee is the inventor, but is the employee the patent owner as well?
More often than not, an employment agreement usually contains a provision that assigns any intellectual property rights acquired by the employee during his employment at the company. This means that a patent ownership of an employee inventor will be assigned to the company. In other words, even if the employee’s name may be forever engraved on the face of the patent, the inventor cannot enforce ownership rights.
This is fair game for both the employee and the company, because often the employee’s invention is a byproduct of work at the company, or the invention was developed using the resources of the company. Or sometimes the employee is hired specifically to work on an invention. More importantly, the employment itself is part of the deal so that the employee receives a wage compensation for giving up intellectual property rights.
Of course, it would be absurd to require the employee to give up all rights even if the invention has nothing to do with the job. In that case, even if an assignment clause provided the employee to assign all rights created during the employment, the provision may be made unenforceable. States differ in acknowledging the scope of enforceable assignment provisions. However, the bottom line for an employee is that once an employment agreement is signed, patent ownership may be gone if the invention has any bearing with his or her employment. So if any employees have ideas that they may want to file patent applications for in the future, it may be wise to disclose those ideas as their own at the time of employment, and put them in writing in the employment agreement.
Now for an employer, what if you forgot to have your employee sign an employment agreement? Can you go after the employees who already quit, and make them sign a post-employment assignment?
That may not be very easy. It is because you are now asking your former employee to give up his or her own rights, while you do not give anything in return. Nevertheless, the company may claim its rights to the former employee’s patents, depending on the character of the employment. If the employment was of a typical employer-employee relationship, and the invention is within the scope of employment, then the company may have ownership. If, on the other hand, the employment was more like hiring an independent contractor, where the employee had control over what to do to complete the job, the employee may have ownership. If the employment was made specifically to work on an invention, the company may have ownership. However, all these considerations are fact-specific, and it is better for both parties to avoid ambiguity by putting things in writing in advance. Therefore, it is crucial for an employer to clear the intellectual property rights assignment issue at the time of employment, before it is too late or grows into a headache.
Author: Wooshik Shim, Patent Attorney
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