When an individual develops an invention while employed, questions may arise as to who owns the rights to obtain a patent: the employee or the employer? There are many factors that come in to play in this situation.
For one, did the employee ever sign an employment agreement or a pre-invention assignment? Many sophisticated companies will have the employee sign specific documents stating anything that is invented while employed by the company shall be assigned to said company, often times referred to as pre-invention assignment. Some employee agreements have invention clauses in them stating the expectations of the employee while employed.
Often times, employees are “employed to invent”. In this instance an employee agreement may not be formally entered into as continued employment is contingent upon the employee’s inventing or designing skills. However, the employer may still own the rights to the employee’s subsequent inventions. This doctrine is derived from a Supreme Court ruling that stated “Anyone employed to make an invention, who succeeds, during his term of service, in accomplishing that task, is bound to assign to his employer any patent obtained.” United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933).
Despite this ‘employed to invent’ rule, most companies still use a written agreement as it is more reliable and easier to enforce than this implied agreement.
In another case, suppose that an employee did not enter into an employment agreement or pre-invention assignment and was not “employed to invent.” The employee may still not be in the clear. If the employee developed the invention on company time, the company may be entitled to “shop rights” – an implied license under which a company may use a patented invention, invented by an employee who was working within the scope of their employment, using the firms’ equipment, or inventing at the firms’ expense – regardless of whether the invention is related to the company business or within the employee’s job responsibilities. Although the employer is afforded a nonexclusive license to use the invention without paying royalties to the employee, ownership of the invention will be retained by the employee.
As such, before engaging in any “inventive” activity while on the job, employees should confirm whether or not they have signed an agreement with an invention clause in it and determine what the company’s policy on inventions and assignments are.
