You can lose your patent rights when you work with others on an invention. Continue reading to understand how to keep your patent rights and not destroy the value of your idea.
Who owns the patent? Patent rights belong to the inventor who conceived the invention unless that inventor assigns the patent rights to another, or the courts apply the equitable doctrines of hired-to-invent or shop rights.
Who is an inventor?
From the start, the inventor owns the patent. However, don’t confuse inventors with visionaries and scribes.
An inventor is a person that conceived of the details of how to achieve an end goal. For example, you might suggest the end goal of space travel to the planet Mars. You are not the inventor of this idea. Instead, you are the visionary.
If you hire individuals to build a life support system, propulsion system, and other systems needed for space travel to Mars, these individuals are the inventors. They figured out how to build these systems for space travel. The mechanical parts, computer systems, methods implemented in these systems are patentable.
The individuals who figured out how to accomplish the end goal are the inventors.
Don’t confuse a scribe with an inventor. A scribe is not an inventor or visionary. A scribe is merely a person that follows the inventor’s directions. For example, operators of computer-aided drafting software are not inventors if all they did was input the drawings of other people’s sketches. They didn’t figure out how to achieve space travel to Mars.
So when you are trying to identify the inventors, you can use this paradigm of visionary, inventor, and scribe. For many start-ups, all three are the same person – you.
Assign the patent rights to a corporation
The inventor owns the rights to the invention unless the inventor assigns the invention to a company. Typically, engineers would assign their inventions to their company as a condition for employment.
With a start-up, the founder may hold the patent rights personally. If there are other inventors, the founder may have the patent rights assigned to the founder. Later on, when attracting investors, the patent rights may be transferred to a company.
Problems may arise when the founder works with other people and businesses on the invention. Others may contribute inventive ideas, and those ideas need to be owned by the founder. If they don’t assign the patent rights to the founder, then the founder can’t patent those ideas. They don’t belong to the founder.
For example, an inventor has a basic idea and works with other people to build a prototype. If they contribute to the overall invention, they need to assign their patent rights to the founder. If these people don’t assign the invention, then you have a problem.
The solution is to get everyone who will work with you to sign an invention assignment agreement before they start working with you.
I suggest that you be overinclusive. Try to include everyone to sign the invention assignment agreement regardless of their role in launching the product (e.g., visionary, inventor or scribe). Have all of the people working with you sign the invention assignment agreement.
If you don’t include inventors who ought to be labeled as an inventor and don’t get an invention assignment from them, problems may arise during litigation. The inventor who didn’t assign their invention rights to the corporation could argue that they have ownership of your patent. If their claim is correct, they can dedicate your patent to the public or sell the patent rights to the defendant you are suing.
As indicated, the inventor initially owns the patent rights unless they assign it to a third party. However, under certain conditions, even if they didn’t assign the invention, the courts may look at the situation and deem that the inventor has to assign the invention rights to a third party.
Under the hired-to-invent doctrine, the courts say that even though a person didn’t sign an invention assignment agreement, they have assigned the invention away. For example, suppose an engineering firm hires an engineer to develop solutions to a client’s problems. In that case, the engineer is hired to invent. Based on the situation, they have to assign their inventions to the company under an implied contract.
The hired-to-invent is an equitable doctrine. You have to sue the engineer or individual to take advantage of this doctrine. Unless there is a lot at stake, practically speaking, you cannot take advantage of this doctrine.
Another way that a person’s invention rights might be taken away from them is under the equitable doctrine of shop rights. Under the shop rights doctrine, if an employee used the employer’s resources to work on their invention, the employer may have an implied license to use the invention. You can still get a patent on the invention. But, your employer will have the right to use the invention without paying you a royalty.
The bottom line is that if you are working on a side project, don’t use your employer’s resources (e.g., computers).