Employee Assignment Invention

In assigning an invention, usually the employment contract will govern. However, some states have Employee Invention Laws. These laws, in effect, retain personal, nonbusiness related inventions for the employee as long as they are not made on the employer s equipment or time. 

---

The italicized clause in question requires that the employee assign all inventions that he might make or conceive at any time after the date of the agreement—that is, even after his employment by the company had reached its end—as to any subject matter with which the company was or might be concerned. In other words, there was no time limit set on this obligation, nor was its scope limited. The court found this bad, holding as follows ... 

It is a term referring to a non-exclusive royalty-fee license given to a employer where an employee uses the employment s time and/or equipment to develop an invention. Shop-rights come into play when there is no assignment agreement. 

Where the facts show that the employee was specifically hired to make inventions, the inventions that result belong to the employer, and the employee is required to assign them to him. This doctrine applies, however, only to those inventions that fall within the field for which he was actually hired and not to inventions he may make in other areas.. .. if the employee engages in inventive activity that is entirely independent of his job, e.g., work done at home in areas not related to his employment and not involving the use of his employers facilities or time, the inventions that result belong entirely to the employee just as though he were unemployed (2). 

Disputes arising over whether an employee is hired to invent in the scope of his work assignment cause the problems. Employment agreements, which vary widely from corporation to corporation, are placed before a newly hired employee to avoid these disputes. They... 

Only one clause was common to every one of the agreements I studied in detail a duty of cooperation by the employee with respect to patenting of inventions. The second most common feature is a duty on the part of the employee to disclose inventions to his employer. Another common feature was a duty to refrain from disclosing trade secrets belonging to the employer, and a duty on the part of the employee to assign his inventions to the employer. It is fair to state that these are the usual provisions. 

While a promise not to compete was rare, it was commonplace to have a provision that inventions completed within six months or a year after termination of employment would have to be reassigned to the former employer. If this provision were rigorously enforced, a new employer would be reluctant to assign a new employee to any area where he would be likely to make an invention within the first six months or a year. I do not believe such provisions are rigorously enforced. 

IX. Employee-inventors shall participate to the extent of at least 10% in the income generated by their inventions. Patents obtained by an employee resulting from inventions developed on his own time, outside his assigned field of work, will be the property of the employee. 

Where invention ownership issues arise outside of the employer/employee venue, contracts between the parties involved will govern the arrangement much as the employment contract does in the employer/employee venue. In some instances, one of the parties will agree by contract to assign any future patent rights to the other party, often in exchange for a predetermined royalty rate on any products, possibly in... 

This is an extreme example of a clause in a patent assignment agreement which contravenes public policy and is therefore unenforceable. This principle serves as an effective restraint upon unreasonable employee invention assignment agreements. However, the courts have approved asignments of future inventions within the scope of the agreement if the time is definite and reasonable, such as for one year after termination of employment. 

When neither a patent assignment danse in an employment contract or in a policy statement in an internal company document exists, employer ownership of patent rights can be implied for employees who are hired to invent, i.e., those hired either for a specific project or problem or for their expertise in a specific area. If the inventor is an officer or director of a corporation or other business entity, a special obligation to assign may exist as part of the officer s or director s fiduciary duty toward the entity. 

Employees can be inventors, but companies are assigned the rights to their inventions... 

---