Ownership of Inventive Patents and the Role of Employment Contracts

When an employer files for a patent on an invention created by an employee, it often leads to questions about patent assignment and the rights of both the inventor and the company. This article aims to clarify these issues, highlighting the nuances of patent law and employment contracts. If you are in a similar situation, understanding these legal complexities can be crucial.

Patent Assignment and Employment Contracts

Generally, many employees are bound by employment contracts that include a clause requiring them to assign any patents arising from their work to the company. However, there are instances where an employee might have full rights to the invention. This article explores the conditions under which an inventor might retain ownership of their patent.

Conditions for Retaining Ownership

Without a specific provision in the employment contract mandating the assignment of inventions to the company, an employee might have the right to retain ownership of their patent. Several conditions must be met for this to be the case:

The employee was not hired to invent. The invention is not related to the company's products or field of expertise. The employee was not required to assign their inventions as part of their employment contract or company rules. The employee did all of their inventing during their own time, not using company resources. The employee used equipment that did not belong to the company during the invention process.

The Role of Equitable Estoppel

Even if the aforementioned conditions are met, there is a possibility that the company might still believe they own the invention. This belief can arise from actions or statements made by the employee or the company. In such cases, equitable estoppel could come into play.

Equitable estoppel may apply if the company spent money on a patent application, expecting to own the patent, but the employee remained silent about not intending to transfer rights to the company. This situation is delicate and should be handled with caution.

Leveraging Commercial Value of the Invention

Should there be a legitimate reason to object to the assignment of the invention to the company, it is important to consider whether the invention has commercial value. If the invention can generate revenue through commercialization or licensing, it might be worth taking legal action. However, this decision should not be made without consulting a patent attorney who can provide specific guidance based on the unique circumstances of the case.

It is crucial to weigh the potential benefits against the risk of legal action and the consequences of a possible lawsuit on your professional reputation and employment status.

Cautions and Considerations

The vast majority of patents have little commercial value. Companies often pursue patents for various reasons, such as rewarding inventors, enhancing company reputation, or protecting existing product lines. Patents can be a tool for preventing competitors from making a cheaper or better product using the patented technology. However, this does not guarantee that the invention will be commercially viable.

If the invention has significant commercial potential and is worth pursuing, it would be wise to engage a patent attorney. They can help navigate the legal complexities and ensure that your rights are protected. However, if the potential for commercial success is low, retaining the invention might not be worth the risk of conflict or the legal costs involved.

Ultimately, the decision to assign the invention to the company should be made thoughtfully and with the advice of a legal expert. If you are obliged to assign the invention to the company, it is important to cooperate and avoid any unnecessary conflict. Being seen as a difficult or uncooperative employee could harm your professional reputation and career prospects.