17 May Who owns what invention in the workplace?
The model is that the ownership of a patent right initially goes to the inventor. But who owns the rights to inventions made in the workplace? The company? The inventing employee? It depends on the circumstances.
A first question to be asked: Is there an employment agreement signed by the employee that includes the obligation to assign all inventions developed in the workplace to the company?
No? Then you must ask: Was the employee hired to invent or to solve a certain problem? If yes—and the invention is within the scope of that job description—then under those circumstances where you can establish an implied-in-fact assignment, the employee is ordinarily obligated to assign the invention and all patent rights to the company.
If no—and the invention is outside the scope of their job description—what rights, if any, does the company have in that invention?
An employee owns any invention made on his or her own time without the use of company resources. However, if they developed the invention on company time and/or used the company’s facility and/or resources, the company may be entitled to “shop rights” in the invention—regardless of whether the invention is related to the company business or within the employee’s job responsibilities.
In such instances, under its shop rights, a company obtains a royalty-free and non-exclusive right to use any invention in its business developed by an employee during compensated work hours or using the company’s resources without having to compensate the employee. The company cannot transfer its shop rights to another entity and cannot prevent others from using the invention. And the employee-inventor owns the patent rights and the right to license the patent to others.
The bottom line? A company’s rights to inventions can impact mergers, the sale of the company, or the ability to attract investors. To protect your business and secure exclusive rights to your technology, a company should require all employees to sign an employment agreement that includes a description of duties and the obligation to assign all inventions developed in the workplace to the company. This will help avoid battles over ownership of inventions with your employee-inventors.