You’re a Solo Inventor If …
You’re a solo inventor if you conceive your invention completely by yourself and are not anyone’s employee or perform work for others as an independent contractor (non-employee). If you qualify, you will be the unquestionable sole inventor and original owner of your invention.
EXAMPLE: Kilroy, a retired engineer, spent much of his “golden years” working on inventions. Among them was an interlocked pallet and container system designed to prevent spillage from crates on top of pallets. Kilroy worked for himself and conceived his invention himself. He obtained two patents for the system. Kilroy was a true independent inventor and was the sole inventor and owner of his invention. (Kilroy v. Commissioner, T.C. Memo 1980-489.)
CAUTION: Beware of Holdover Clauses. If you’ve worked in the past as an employee or independent contractor, be sure to read any employment or contractor agreement you signed. Such agreements typically contain provisions requiring you to assign your patent rights to the employer. Moreover, they often include “holdover clauses” providing that you must assign your inventions for some time after your employment ends. So, even if you’re self-employed now, an agreement you’ve signed in the past could come back to haunt you.
You’re a Joint Inventor If …
Inventions are often jointly invented by two or more people. Joint inventors are also joint owners of their invention. Joint owners (sometimes called co owners) share in the ownership rights to an invention. If you’re a joint owner, your life is more complicated than that of a sole owner. The most important consequences of joint ownership are that:
- Absent an agreement to the contrary, joint owners each own a pro-rata undivided interest in the entire invention—for example, if there are three joint inventors, they each own a one-third interest in the whole invention. Every joint owner must be involved in any action before the PTO, such as filing a patent application, and they must all join in any patent infringement suit. A patent on a joint invention issued to only one inventor is invalid.
- All joint owners of a patented invention must consent to an assignment of all rights to the invention. That is, none of the owners can give up all rights to the invention without obtaining agreement from the other owners. (35 U.S.C. § 262.) Generally, the joint owners decide amongst themselves how to split the revenue from sales and licensing (for example a 50-50% split). If the joint owners cannot decide and a dispute results, a court will make the final determination.
- Most important of all, unless they agree to the contrary, any joint owner of a patented invention can make, sell or use the invention without the other owners’ consent and without compensating them. For example, one owner can enter into a non exclusive license with someone to manufacture and sell the patented invention and keep all the revenue. The easiest way for the joint owners of a patented invention to protect their interest is to enter into a Joint Ownership Agreement, as provided below. (Note: this rule only applies to joint owners of patented inventions. It does not apply to trade secret ownership or to inventions that are licensed before a patent is obtained.)
Portions of this article are derived from What Every Inventor Needs to Know About Business & Taxes by Attorney Stephen Fishman.
For More Information:
- Voluntary or Involuntary Joint Ownership
- Purchase Joint Ownership Agreement with Explanations
- Filing a provisional patent application: see Nolo’s Online Provisional Patent Application.