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Employees and Inventorship

Inventorship in a patent application is a typically tertiary concern that receives little attention in the drafting process and can seem unimportant to the uninitiated.

Getting it Right

Inventorship in a patent application is a typically tertiary concern that receives little attention in the drafting process and can seem unimportant to the uninitiated. However, the consequences of making an error with regard to inventorship can be dire, resulting in the potential loss of significant revenue and control over who may or may not practice the invention. However, particularly for an employee-inventor, there are many opportunities to avoid such unfortunate outcomes.

 

Inventors’ Rights

U.S. patent law states that each person who “contributes to the conception of the invention” is an inventor. Each inventor has an undivided equal partial interest in the entire patent. This means that each inventor has the legal right to make, use, or sell the invention, and authorize others to do the same. Moreover, no inventor has any obligation to share in the proceeds of their individual monetization of the invention; each inventor may exploit the invention to their individual benefit.

Accordingly, it is frequently in the best interest of all the inventors to transfer their interests in a patented invention to a single entity, who can then derive value from the patent by making and selling the invention embodied in it, licensing, or various other methods. This is referred to as assignment, whereby an assignee gains the rights of the assigning inventors.  The powers of the entity that the interest of the inventors is transferred to is a completely separate matter, and should be dealt with using corporate agreements, such as an operating agreement.

 

Employee Inventors

In the case of employee inventors, it behooves employers to require employees, as a condition of their employment, to assign their interests in any intellectual property that arises in the course of their employment. Such clauses are often included in employment agreements, employee handbooks, non-competition agreements, and the like. In such circumstances, an employee inventor is under a contractual obligation to assign their interest to their employer, presently and in the future.

 

Consequences of Errors in Inventorship

If there is an error in inventorship, a variety of outcomes are possible. Where an inventor was omitted without deceptive intent, the inventor may be added by a routine procedure in the Patent Office. However, that inventor now has the same undivided interest in the patent as the other inventors who were previously named, leaving the newly-added inventor free to exploit the patent. This can present a problem where the patented invention is already in production, either by the inventors or by license to a third party. The newly-added inventor may subvert these efforts by making their own use of the patent, releasing a competing product or entering into their own licensing agreements.  Moreover, where a patent owner is seeking to enforce a patent in litigation against an alleged infringer, and the infringer learns of the newly-added inventor, the infringer may be able to obtain a license from the newly-added inventor, thus nullifying the claim of infringement.

It is precisely in these scenarios that obligating employee inventors to assign their rights in intellectual property becomes invaluable. For example, if the inventor is no longer an employee, they may benefit little from assigning their interest in the patent. However, if they are obligated to do so, they may have a significant disinterest in doing anything other than assigning their interests, as required.

Bad as these scenarios may seem, there may be worse. If, in the course of litigation involving a patent, it is discovered an inventor was omitted from a patent application, and there is evidence to suggest the inventor was intentionally omitted, it is possible the patent may be invalidated, thus dissolving a potentially valuable asset.

 

What to Do If You Discover an Error in Inventorship

Every effort must be taken to correct the inventorship of the invention. Where the inventor appears willing to cooperate, both in terms of being added as an inventor and in assigning their interest, then adding them is relatively straightforward and painless. However, if the inventor is uncooperative in terms of adding themselves as an inventor, procedures exist within patent law for adding them despite their opposition.

Finally, as a measure of last resort, where the inventor appears likely to do harm to existing business interests that rely on the patent, certain elements of the patent may be eliminated so as to remove that person’s contribution to the invention, thus removing them as an inventor. This is not always an option if their contribution cannot be readily excised, and certainly diminishes the value of the patent.

These entirely unnecessary risks can be avoided with careful review by the inventors, particularly with assistance by a patent attorney.

 

Dan_Pierron_BWDan Pierron is an attorney with Widerman Malek, a Melbourne, Fla. firm practicing in intellectual property including, patent, trademark, copyright, and trade secret law. He may be contacted at DPierron@USLegalTeam.com

 

 


This article appears in the January 2015 issue of i4 Business.
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i4 Business

i4 Business

I4 Business magazine has become one of the most trusted voices for and about the Central Florida business community. Each month through our print and digital platforms, we provide access to meet, to learn from and to learn about some of the incredible entrepreneurs and business leaders, along with economic trends that are shaping our region.

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