Employee Inventions Ownership

Guide to Intellectual Property

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• Introduction
• Patent Law
• Copyright Law
• Trademark Law
• Trade Secret Law
• Licensing Your Intellectual Property
• Employee Inventions Ownership
• Invention Financing and Joint Ownership
• Licensing Agents
• Soliciting Potential Licenses
• Protecting Confidential Product Information
• Royalty Payments
• Warranties and Proprietary Rights
• Contract Termination
• Intellectual Property Legal Help

If an individual invents something while they are working for someone else (i.e. their employer), the ownership of the product or intellectual property will depend on the capacity in which the individual was employed. If an individual created the work on their own, in a way completely unrelated and unconnected to their job function, the individual owns the intellectual property. On the other hand, if the individual created the intellectual property while functioning within the scope of their employment, the law determines that the employer is the owner of the intellectual property and has all legal rights and claims that any owner would have. Essentially, if a company hires an engineer to invent and create for the company, the company owns all of the things the employee engineers and creates.

Rules Governing Invention Ownership And Employment

Generally speaking, ownership of an invention is based on the context within which the invention was created. If an invention is created by an employee who functioning within their defined role in a company, that individual is producing the invention for or on behalf of the company. Thus, inventions created that are within the scope of employment are the property of the employer, not the employee. If created while at work and as part of a job function, ownership of the intellectual property lies with the employer.

Invenstions Written Employment Agreements and Contracts

With respect to inventions made in employment situations, the ownership of an invention is based on the context within which the invention was created. Thus, whether or not it is expressly stipulated in the employment agreement, inventions created as part of a job function will almost always be viewed as the property of the business, not the individual. In some cases, written employment agreements will stipulate that anything produced for work purposes will remain the property of the business. Employment agreements that stipulate that the inventions of an individual remain the intellectual property of the individual are binding as well. In cases like this, even if the invention is created for a business while the individual is working within their defined role at the company, the individual still retains ownership rights over the invention. Due to the fact that most businesses hire people to invent and innovate for the purpose of making a profit, employment agreements that give all intellectual property ownership rights to the individual employees are both rare and largely impractical. Additionally, employment agreements may contain disclosure provisions that require the employee to disclose any and all inventions created while employed at the company. This gives the business the option to decide whether they are interested in pursuing any of the creations or inventions made by individuals during the course of their work within the company.

Pre-Invention Assignments

Pre-Invention Assignments are included in many employee agreements and serve to give the employer rights to all inventions of the employee. Under a pre-invention assignment, the employee must turn over all ownership rights over anything invented or created while the employee works for the employer. The pre-invention assignment occurs at the outset of employment before anything is actually invented or created by the employee during the course of employment.

Employed To Invent Doctrine

Pre-invention assignments occur most often when employees are employed for the specific purpose of inventing or creating a new product or system that the employer is interesting in. The presumption under the Employed to invent doctrine is that the employee will have some success in their job, and whatever is produced is to be the intellectual property of the owner alone.

Shop Rights

A shop right is a nonexclusive license granted to the employer that allows the employer to use an invention of an employee without paying royalty fees. Shop rights allow the employer to utilize the invention regardless of whether the employee-inventor remains employed within the company. With shop rights, the employee-inventor can still seek to patent the invention and can license use of the invention out to other businesses, but the employer who has the shop rights cannot be precluded from using the invention, even once it becomes patented. Essentially, the inventor is protected from all infringements on their intellectual property except by the use of their current (or former) employer.

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