Does my employer own inventions I created on my own time?

Question:

I work for a furniture manufacturing company, coming up with new designs and styles for sofas and chairs. In the past year or so, I’ve become interested in reclining furniture, specifically how to give the user more precise calibration options (which parts recline, by how much, and in which directions). My company makes only basic recliners, so I’ve been working on my own time to develop an internal mechanism that would allow for the function I want. I’m pretty close to perfecting my design, and I want to apply for a patent. But an engineering friend of mine said my employer might actually own the rights to my invention – is that right?

Answer:

Your employer might own the rights to the invention, or at least some of them. It depends on whether you have signed your rights away, whether and to what extent you have used your employer’s time, space, materials, and other resources to create your device, and how close your invention is to the work you were hired to do.

First of all, have you signed anything that gives your employer the right to inventions you create during your employment? Many employers use invention assignment agreements with the employees they hire to create, design, and build their products and processes. Typically, this type of agreement requires you to disclose any inventions you create during your employment, to assign the rights in that invention to your employer, and to assist your employer in getting a patent to the invention. (These contracts aren’t enforceable in every state, though. For example, in California, employers can't make employees sign over the rights to works created entirely on the employees' own time and without using the employer's resources. See Who Owns Patent Rights for more information.)

If you haven’t signed this type of contract, your employer might still have ownership rights to your invention if you used your employer’s materials, space, equipment, intellectual property, or other resources to create it. And, the closer your invention is to the type of work your employer does – and you were hired to do – the more likely it is that your employer owns the invention. In other words, if you were hired to invent, the things you invent are more likely to belong to your employer.

Even if you haven’t signed away your rights, and your device was created entirely on your own time and your own dime, your employer may still have “shop rights” to use it. Under the shop rights doctrine, you get to patent your invention, but your employer gets a license to use it, for free, without royalties. (You can learn more about shop rights in Who Owns Patent Rights.)

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