MightyRecruiterSuppose one of your engineers develops a break-through product on the job. Is the invention patentable? More importantly, who assumes ownership of the patent? Here’s some useful information for business owners, particularly those with a heavy focus on R&D.
Patenting 101
The United States Patent and Trademark Office (USPTO) grants legal protection to people who create novel, useful and non-obvious inventions. A federal patent prevents outside parties from stealing, copying, selling or otherwise using someone else’s intellectual property. The application process is lengthy and the requirements are strict, but patents give you an easy way to brand and increase your market share.
Business owners stand to gain the most from new innovations, even when a patent application is in review. When you stamp your product with a “patent pending” sign, you’re telling competitors that you’ve staked your claim. Even though you don’t have legal rights until the grant date, few companies are willing to risk meddling with an invention that’s under review.
Patent Vs. Trademark
A trademark is your image. It’s any symbol, picture or phrase that customers associate with your brand or products. Trademarks are also eligible for federal protection, but unlike patents, they’re not restricted to 20 years. Furthermore, a trademark typically belongs to a company. Patents can belong to anyone, and ownership laws are a little more complex.
Ownership
All rights to a particular patent go to the individual inventor, unless that person transfers ownership to someone else. Depending on the size of your operation, you may employ one IT worker or an entire R&D department. Likewise, you may find yourself collaborating with other companies, so it’s important to divulge your intentions right from the start.
- Employee inventions: No employee is legally required to sign over his or her invention, particularly if the device or product was created off site. You can, however, develop a pre-employment agreement that grants you full ownership of all work-related developments. You can also draft an agreement after your employee has been hired. However, you must offer some kind of secondary consideration, such as additional fringe benefits or a stock option. If you hire someone solely to create or experiment with a particular product, you definitely want a clear agreement signed upfront.
- Multiple inventors: U.S. property law does allow for part ownership. If several people create one invention, each person may use the patent independent of the other owners. Any business owner seeking rights to a collectively owned patent must obtain a signed agreement from each inventor.
- Contractor inventions: 1099 situations can be slightly more involved. As a general rule, use the same principles for a contractor that you would you for an employee. Better still, have a lawyer look over your independent contractor agreement.
- Intercompany inventions: These patents are treated as having multiple inventors. If you collaborate with another company, any resulting patent will be dual-owned. Both parties will assume full-use rights without interference. Always have a written agreement before beginning any R&D work with another person or entity.
It’s important that you understand the difference between assigning and using. For example, you may have the right to use a new device or technology if your company supported or funded its development. These are known as shop rights. Although you’re not required to pay royalties, you cannot transfer or assign your use privileges. When it comes to shop rights, it’s best to spend some time researching the patent histories of your employees. Try to get an idea of what kind of resources were involved with each project.
Legal Counsel
Whether you’re signing on a new employee or trying to win rights of a recent development, make sure you get a patent attorney involved. Infringement law is messy, and you want to make sure you’re going through the proper channels.
Legal Disclaimer
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.