Employee Inventors: Patent Strategies in the Workplace
If you are employed to invent, here are some strategies ...
Here are some basic strategies for dealing with your employer, whether or not you’ve signed a pre-invention assignment agreement.
Keep good records
If you’ve signed a pre-invention assignment or are an inventive employee who hasn’t signed one, you’ll likely be able to retain your invention if:
- it was created on your own time and without your employer’s resources, and
- it does not relate to your employer’s present or anticipated business or your work with the company.
If you’re a noninventive employee who hasn’t signed an assignment agreement, you’ll have to give your employer a shop right unless you can show you created the invention on your own time with your own resources.
It should be clear, then, that it’s very important for you to be able to prove you created the invention without your employer’s help. If an ownership dispute ends up in litigation, you’ll have the burden of proof on these issues—this means you must convince the judge or arbitrator. The best way to prove these things is to keep a witnessed inventor’s notebook showing how, when and where you developed the invention.
Keep any other documentary evidence that might also help, such as correspondence, copies of e-mails and receipts for equipment you purchased or leased. You can paste these into your inventor’s notebook or keep them in a separate file.
To Disclose or Not to Disclose
If you’ve signed a pre-invention assignment agreement, it will contain a provision requiring you to disclose any inventions you create to your employer. The purpose of the provision is to allow the employer to evaluate your inventions and determine if the company has any rights (either by assignment or under the default ownership rules).
Read the disclosure clause in your agreement carefully. Such clauses often provide that you need not disclose an invention if you created it with your own resources and it is outside the scope of the employer’s present or future anticipated business. If your invention is covered by your disclosure clause, then be sure to tell your employer about it. If you’re unsure whether or not it is covered, consult with a patent attorney before making the disclosure.
But, what should you do if your invention is clearly not covered by a disclosure clause you’ve agreed to? Or what if you’ve never agreed to such a clause? There are two schools of thought:
- Disclose everything: Some people believe it’s best to disclose all your inventions and discoveries to your employer. This is so even though you haven’t signed a pre-invention assignment agreement or the invention doesn’t fall within the assignment agreement you did sign. Here’s why: if you don’t disclose the invention and later patent it and license or manufacture it, and your employer finds out about it, it could claim ownership. It’s best to have such disputes dealt with before you go to the time, expense and trouble of patenting and exploiting an invention. You don’t want the ownership issue hanging over your head like Damocles’ sword.
- Disclose only when necessary: Some people take the opposite view and say you should disclose your inventions to your employer only when absolutely necessary. They fear that an employer might claim it owns an invention you’ve disclosed even when it really doesn’t, and either sue you or make it impossible for you to continue working for the company without assigning the invention to it, or both. They think it’s better not to disclose an invention when you don’t have to. If it later is patented and becomes successful, you’ll have more financial resources to fight any unfounded ownership claims by the employer.
If you’re unsure about whether you should disclose an invention, discovery, innovation or idea to your employer, consult with a patent attorney before making the disclosure. Some things to think about when deciding whether to disclose or not include:
- the potential value of your invention
- whether the invention is closely related to your work for your employer
- how good your relations are with your employer, and
- your employer’s record in handling employee inventions in the past.
Whatever you do about post-employment inventions, before you start work, it’s wise to provide your employer with a list of all the inventions or discoveries you’ve already created. Some employer’s require this but you should do it whether it’s required or not. Such a list can help you prove that your employer has no rights in an invention because you created it before you worked for the company.
Deal with ownership disputes
What do you do if you and your employer dispute ownership? Your employment agreement, if there is one, may control how the dispute is resolved. For example, the agreement may call for mediation or arbitration of disputes over the agreement's provisions. If not, you can always invite the employer to submit to arbitration or mediation in an effort to avoid a costly courtroom battle. And if all else fails, you could end up in court.
In any ownership dispute, you should seek the advice of an intellectual property attorney before proceeding. The attorney can assess your position in relation to the state law and explain your options, and will work with you to clear ownership so that you can license the invention freely. If the employer claims a shop right, your attorney may be able to reach an agreement as to the extent of this right.
If your employer owns rights to your invention and is willing to transfer those rights to you, then an agreement should be signed confirming the arrangement. Likewise, if it’s unclear whether the employer has ownership rights, the company might be willing to waive any rights it might have. This might happen, for example, if the company is in financial difficulty, is attempting to settle some other dispute with you or believes the invention has no commercial potential. The last reason might be your best bet—every year, employers automatically acquire through pre-invention assignments ownership of thousands of inventions created by their employees that they view as having no potential and never patent or attempt to commercially exploit.
Portions of this article are derived from What Every Inventor Needs to Know About Business & Taxes by Attorney Stephen Fishman.
For assistance with the preparation and filing of a provisional patent application, see Nolo’s Online Provisional Patent Application.