Inventor Rights

Inventorship is a critical legal determination based on contribution to conception: LEGAL DEFINITION: under US law, an inventor is a person who conceived of the subject matter of at least one claim of the patent; CONCEPTION: the 'formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention' (Burroughs Wellcome v. Barr Laboratories, Fed. Cir. 1994); WHAT COUNTS AS INVENTIVE CONTRIBUTION: contributing to the conception of: the key technical features; the solution to the technical problem; the novel elements claimed; WHAT DOES NOT MAKE SOMEONE AN INVENTOR: conducting experiments to test the inventor's conception (reduction to practice without contributing to the conception); following the inventor's instructions; contributing to features that are not claimed; providing the general idea without the specific technical solution; managing the project; JOINT INVENTORSHIP (§ 116): two or more people jointly conceived the invention; joint inventors do not need to: contribute to every claim; work in the same place; know each other before the invention; contribute equally; BUT they must each contribute to the conception of at least one claim; INEQUITABLE CONDUCT: if inventorship is intentionally and incorrectly stated, and the error is material, the patent may be unenforceable due to inequitable conduct (deceptive intent); CORRECTION OF INVENTORSHIP: non-deceptive errors can be corrected under § 256 before or after issuance; LEGAL CONSEQUENCES: incorrect inventorship can: invalidate the patent in litigation; create legal disputes about ownership; constitute inequitable conduct if intentional.

Patent ownership is separate from inventorship and depends on assignment agreements: DEFAULT RULE: patents initially belong to the inventor(s); 35 U.S.C. § 261: patents are assignable by written instrument; THE PRACTICAL REALITY FOR EMPLOYED INVENTORS: almost all employment agreements with technology companies, universities, and research institutions include an invention assignment agreement (IAA); the IAA typically requires the employee to assign to the employer: all inventions conceived using company resources, time, or information; all inventions related to the company's current or planned business; all inventions that are improvements to the company's technology; with a valid IAA, the employer owns the patent (the inventor's right vests automatically or upon execution of an assignment document); WHAT HAPPENS WITHOUT AN IAA: if no assignment agreement exists, the employer may have only a 'shop right' — a non-exclusive, non-transferable license to practice the invention (see shop right doctrine); the inventor retains full ownership including the right to license to others; THE HIRED-TO-INVENT DOCTRINE: even without an explicit IAA, if an employee is specifically hired to solve a particular technical problem and invents the solution, the employer may own the invention under the 'hired-to-invent' doctrine; STANFORD v. ROCHE (S.Ct. 2011): the Supreme Court held that the Bayh-Dole Act does not automatically vest ownership of federally funded inventions in the university — the university must have a valid assignment agreement; a researcher who signed an IAA with a company BEFORE signing one with Stanford → company owned the invention; SOLE vs. JOINT OWNERSHIP: if a patent has two inventors who have assigned to different parties, ownership is split (co-ownership); in the US, a co-owner can practice the invention and license it without the other co-owner's consent and without accounting for profits; this is a problem in joint research — the agreement should specify ownership upfront.

Invention assignment agreements vary in scope and enforceability: CORE PROVISIONS: ASSIGNMENT CLAUSE: the employee assigns to the employer all inventions conceived: (a) during the course of employment; (b) using company resources (computers, time, materials); (c) relating to the company's actual or anticipated business; (d) that are improvements to company technology; DISCLOSURE OBLIGATION: employee must promptly disclose all inventions to the employer; even inventions the employee believes may not belong to the employer; PRE-EMPLOYMENT INVENTIONS CARVE-OUT: the employee should list pre-existing inventions at the time of hire; pre-employment inventions listed in the agreement are excluded from assignment; failure to list pre-employment inventions → employer may claim they belong to the company; CONFIDENTIALITY: employee must keep company inventions confidential; extends post-termination; STATE LAW LIMITATIONS ON SCOPE: CALIFORNIA (California Labor Code § 2870): an IAA provision is VOID if it requires assignment of inventions: developed entirely on the employee's own time; without using company equipment, supplies, facilities, or trade secret information; not relating to the company's business or its actual/reasonably anticipated R&D; not resulting from work performed for the company; many states have similar protections (Delaware, Illinois, Minnesota, North Carolina, Washington); FEDERAL OVERRIDE: if the employee invents under a federal government contract, the Bayh-Dole Act may require assignment to the employer (who must then report to the government); SIGNATURE TIMING: IAAs signed after employment begins require new consideration (additional compensation) in some states; signing an IAA as a condition of continued employment, without additional pay, may be unenforceable; CONSULTANT AND CONTRACTOR AGREEMENTS: non-employee consultants/contractors are NOT employees; their inventions belong to them unless a written agreement assigns them; written 'works made for hire' does not apply to patent inventions (only to copyrights in certain categories); always use a written consultant agreement with an explicit patent assignment clause.

An assignment transfers ownership but inventors may retain certain rights: AFTER A FULL ASSIGNMENT: the inventor generally loses all ownership rights in the patent; the employer has full rights to: license; enforce; abandon; sell the patent; the inventor has NO right to practice the patent without the employer's license; the inventor has NO right to sue infringers; the inventor has NO right to collect royalties (unless the IAA provides for inventor compensation); INVENTOR RECOGNITION RIGHTS: US: inventors have the right to be named on the patent (§ 115); being named as an inventor is a legal right and a matter of professional reputation; COMPENSATION FOR INVENTORS: US: No legal requirement to compensate inventors for assigned patents (absent contract); some companies have voluntary inventor compensation programs (relatively rare; nominal in most cases); GERMANY (Arbeitnehmererfindungsgesetz — German Employee Invention Act): one of the most inventor-protective laws in the world; employer must formally claim the invention from the employee; if claimed, employer must pay 'reasonable compensation' to the inventor; compensation is calculated based on: the patent's commercial value; the inventor's contribution; the inventor's position in the company; significant litigation in Germany over inventor compensation; JAPAN: Patent Act Article 35: employers must provide reasonable benefit to inventors; compensation amount is negotiated or set by the employer's internal rules; significant Japanese court decisions have required substantial compensation for major inventions; CHINA: Chinese Patent Law Article 16: the employer must provide inventors with a bonus and remuneration; specific amounts set in the law (minimum) or employment contract; STARTUP CONTEXT: some startups give inventors equity (stock or options) in the company as recognition of their contribution; MORAL RIGHTS: some countries recognize inventors' moral rights (right to be named; right to object to false attribution) independently of economic rights.

The shop right doctrine gives employers a limited license to use employee inventions in certain circumstances: DEFINITION: the shop right is a non-exclusive, royalty-free, non-transferable license that arises by operation of law when an employee invents something using the employer's resources and time, even without a formal assignment agreement; WHY IT EXISTS: courts created the shop right to protect employers who invested in developing an invention that the employee technically owns (due to lack of an IAA); it would be inequitable for the employee to exclude the employer from using an invention developed on company time with company resources; ELEMENTS REQUIRED: (1) the employee used the employer's time, materials, or facilities to make the invention; (2) the employee was not 'hired to invent' (if hired to invent, the employer owns the invention outright under the hired-to-invent doctrine); (3) there is no explicit assignment agreement covering the invention; WHAT SHOP RIGHT PROVIDES: the employer can PRACTICE the invention; the employer does NOT need a license from the employee to use the invention; BUT: the employer CANNOT: transfer the shop right to a third party; exclude others from practicing the invention (only the inventor-owner can do that); WHAT SHOP RIGHT DOES NOT PROVIDE: the inventor still OWNS the patent; the inventor can license the patent to third parties (including competitors); the inventor can enforce the patent against infringers (except the employer who has shop right); PRACTICAL IMPACT: companies avoid relying on the shop right because: it is limited (non-transferable; non-exclusive); the inventor can license competitors; the inventor (not the company) controls enforcement; PREVENTION: the shop right issue is entirely preventable with a properly drafted IAA; all employment agreements with R&D employees should include an invention assignment provision; DISTINCTION FROM ASSIGNMENT: shop right = license (limited use right); assignment = full ownership transfer.