Who Owns Your Invention?

Who owns your invention? Who owns your employee’s invention? Invention ownership disputes occur all too frequently. However, invention ownership disputes are easily avoidable with the proper foresight and knowledge.

Our legal system presumes that the inventor is the owner of the exclusive rights in his or her invention. How then, does someone other than the inventor obtain the rights to the inventor’s invention? The answer to that question is by an assignment. The assignment can be an express assignment, which is typically a written document evidencing a contract between the inventor and the assignee in which the inventor sells the rights to the invention to the assignee. However, that type of assignment is not what leads to ownership disputes. Ownership disputes occur when there is no express assignment and both the inventor and his or her employer think that they own the invention. This is because the presumption that the inventor owns the invention is incorrect in certain situations, even without an express assignment.

An employer of one who is “hired to invent” owns the rights to the inventor’s inventions. The Supreme Court came to that conclusion in the Standard Parts Co. v. Peck case in 1924. However, that is the extreme case, since the vast majority of employees are not employed to invent. What about an employee employed to design or construct, such as an engineer? An employee employed in a field of endeavor in order to design or construct is not equivalent to an employee employed for the purpose of invention. That was the conclusion reached by the Supreme Court in U.S. v. Dubilier Condenser Corp. in 1933. However, that conclusion leaves open the question of who owns the invention made by the engineer. The outcome in each ownership case depends on the relationship between the employee, the employer, and the circumstances of the invention.

Even if it turns out that the employee owns his or her invention, if the employee used the employer’s materials or equipment during working hours to make the invention, the law grants the employer a nonexclusive license to the invention. That has been the law ever since the Supreme Court Lane & Bodley Co. v. Locke case in 1893.

It should be apparent that the best way to avoid an ownership dispute is to reduce to a written contract between the employee and the employer who owns the rights to any inventions made by the employee, and that agreement should be defined as early as possible in the employee employer relationship.

Copyright Richard A. Neifeld.

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