When Does Your Employer Own Your Invention?

In general, the person who creates an invention owns it, and the mere fact that someone is employed at the time they create an invention doesn’t have an impact.

With that said, if the employer hired the employee to design a specific invention or solve a specific problem, the employee has a duty to assign the resulting patent. Where the employee is not hired specifically to design or invent, but nevertheless conceives of a device during working hours with the use of the employer’s materials and equipment, the employer is granted an irrevocable but non-exclusive right to use the invention under the “shop right rule.” A shop right is an employer’s royalty or fee, a non-exclusive and non-transferable license to use an employee’s patented invention.

Because these common law rules are a bit vague, most employers include a provision in an employment agreement allocating invention rights. In general, these provisions are enforceable, so long as they are reasonable in scope. However, there are several states that have enacted statutes limiting the application of these provisions. These states prevent an employer from assuming ownership of inventions that are created by employees completely outside the scope of employment.

Even in states without statutory limitations on an employer’s right to contractually require invention assignment, the extent to which a contract provision would likely be enforced to deprive an inventor of rights in an invention would depend on several factors, including the extent to which the product relates to the core business of the employer, the scope of work the employee was hired to do, whether any confidential information of the employer was relied upon to make the product, whether it will be sold in the same channels or to the same customers (in other words, how competitive it is to the employer), and whether significant resources of the employer were involved in the creation of the product.

Ultimately, the biggest determinant of whether or not an employer would ever pursue a claim to the patent depends on how successful the invention ultimately turns out to be or how much it could serve as a detriment to the company from a competition standpoint. If it is unlikely that the invention would be perceived as a threat, it is unlikely it would ever be an issue. Regardless, if it is an overwhelming success, an employee will have the resources to protect itself in any lawsuit.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan

,

Are Templates And Forms Protected Under Copyright Law?

Here is a common question I get from clients: I invented a new type of diagram design related to social sciences. How can I legally prevent anyone else from teaching and displaying my diagram? Let’s say I was the first to invent the Venn diagram. Can I obtain a copyright or a patent prevent anyone from using or displaying it?

You are right to gather that the law surrounding copyrights of diagrams is difficult to generalize. Typically, a “template” or “fill-in-the-blank” diagram is not copyrightable. So a “Venn Diagram” man not be protected by copyright law, since it can be regarded to as a ‘template’.

When a completed diagram (e.g., on that is ‘filled-in’) is copied, as a whole, without much ‘transformation’, it may be considered a copyright infringement. The extent of transformation required relative to the original work is typically assessed on a case-by-case basis.

In general, blank-forms or templates are not considered a work of authorship sufficient for copyright protection. This is because such templates/forms reflect general IDEAS. Ideas are not copyrightable. Rather the Expression of the Idea is copyrightable. Your words/illustrations/creations used to bring an Idea to life are considered the copyrightable expression. This is why, in general, blank forms are not protectable under copyright law whereas completed-filled-in forms would be protectable.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

, ,

Can You Add Another Person to Your Patent Application?

“If I filed for a provisional patent as the sole inventor, is it possible to add another inventor when filing for the nonprovisional patent if he makes a contribution to the invention?”

You may add additional inventors to your non-provisional application.  The non-provisional must have at least one inventor in common with the provisional patent application.

It is important to understand, however, that the inventors listed must correspond to the subject matter stated in the patent claims, not the patent specification.  An inventor is someone who contributed to the conception of a patent claim.  Patent claims are not required provisional patent application, but they are required in the non-provisional… so you must carefully assess who may or may not be listed as an inventor in the non-provisional patent application.

In addition, if you are adding an inventor because the inventor contributed additional subject matter after the provisional patent filing – you must be careful.  Adding new subject matter in the patent claims that was not covered in the provisional may cause the patent examiner to decline your priority claim to the provisional application.  This is because the provisional patent application must at least anticipate the subject matter claimed in the non-provisional application.

As such, you must file a non-provisional patent application with the same subject matter as the provisional and then, you must file a continuation-in-part application to cover the new subject matter not covered by the provisional.  This will enable you to preserve your priority claim to the provisional – else, you risk losing your claim!

I would strongly advise that you retain a licensed attorney for the non-provisional filing.  I have not met an inventor who has obtained enforceable and defensible patent protection without the support of a licensed patent attorney.  There is a high risk of abandoning your patent rights to the public domain.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

,

My New Invention Has Many Uses – Do I Need Multiple Patents? Part 3

You’ve decided that the best approach to protect your invention is by filing patents separately for all the different functions/uses and components. This approach, if affordable, provides numerous benefits (e.g., licensing benefits). Starting the filings out as provisional applications while the invention, as a whole, is still undergoing development or ‘proof-of-concept’ can be an affordable means to protecting the various aspects of your invention. If done properly, protections for needless public disclosures may be provided.

Do you want to keep some components a secret?

The subject matter of a provisional patent application is never disclosed to the public. This affords the inventor an opportunity to continue to improve the subject matter without sharing the disclosure to the public in its ‘patent-pending’ phase. It also prevents the subject matter from entering the public domain in case the inventor decides not to pursue a non-provisional patent on the subject matter.

Recommended Approach:

Break your idea up into components (if possible) and file them as provisional applications first. A full patent application (non-provisional) can claim priority to more than one provisional application. However, as soon as you claim priority to a provisional application, the provisional application becomes public record. If you want to keep different segments of your ideas from being disclosed, file them in separate provisional applications.

In this way, when you follow with a non-provisional, you can pick and choose which components are “ready” to become public record, and which ones can remain undisclosed protected ideas. Otherwise, if you put every aspect of your invention into a single provisional application, then the non-provisional that follows will render all of the components available to the public.

 

For the full story please visit Part 1 of this series.

 

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

,

My New Invention Has Many Uses – Do I Need Multiple Patents? Part 2

A single invention (for example – an automated cleaning robot) may have many different innovations (let’s call them ‘components’) making up the entire invention. Inventors often struggle to decide if separate patent application filings are necessary for each innovation. To assist you in deciding, answer the following questions.

1. Could the Components be used independently of the entire invention for a different invention?

If your innovative component can be used across many different platforms, then it is best to focus a single patent application on the component itself. In addition, a patent application on the invention as whole itself may be filed, incorporating by reference the patent application on the component.

In contrast, if your innovative cannot be used across many different platforms, then it’s best to file a patent application on the invention as a whole and detail the innovative component therein.

2. Is there novelty within the Component itself?

Of course, you would feel that your innovative component is ‘novel’ – but would it pass patent examination without the context of the invention as a whole? In order to pass patent examination, the component itself would need to be deemed by the examiner as: Useful, Novel, and Non-Obvious or Inventive.

If the component, independent of the invention as a whole, has a use on its own – it would meet the ‘useful’ requirement. If the component is the first of its kind (or an improved derivative of existing components), then it would meet the ‘novel’ requirement. If the component is more than just a combination of other existing components, then it would meet the ‘non-obvious’ and ‘inventive’ requirements.

For more information visit Part 3 of this series.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

,

My New Invention Has Many Uses – Do I Need Multiple Patents?

A single invention (for example – an automated robot) may have many different uses and functions. Inventors often struggle to decide if separate patent application filings are necessary for each use and function. To assist you in deciding, answer the following questions.

Does the single invention have different uses?

Generally, a patent application should only claim a single use of an invention. The first and foremost reason: If you are claiming multiple uses of the same invention in a single patent application, the Examiner, at his or her discretion, may force you to select a single use and file separate patent applications for each other use.

The second reason is related to the licensing of your patented invention. It’s important to retain flexibility when licensing your invention. You may desire to license a first use of your invention to, for example, a medical device company while licensing a second use of your invention to, for example, a software company. By having separate patent applications, each claiming a different use, you have the flexibility to control your licensing schemes rather than granting all of the uses to a single entity.

Does the single invention perform different functions?

As with the ‘use’ analysis above, a patent application should only claim a single function of an invention. The first and foremost reason: If you are claiming multiple functions for the same invention in a single patent application, the Examiner, at his or her discretion, may force you to select a single function and file separate patent applications for each other function.

The second reason is related to the licensing of your patented invention. It’s important to retain flexibility when licensing your invention. You may desire to license a first use of your invention to, for example, a medical device company while licensing a second use of your invention to, for example, a software company. By having separate patent applications, each claiming a different use, you have the flexibility to control your licensing schemes rather than granting all of the uses to a single entity.

 

For more information visit Part 2 of this series.

 

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

,

How to Protect Your Idea When Building a Team

An old African proverb comes to mind when writing on this topic: “By ourselves, we can move quickly. Together, we can go far.” Ideas aren’t meant to be confined to a single mind. They’re meant to be shared and formed into a common vision. I’ve seen many entrepreneurs with good ideas afraid to share their good ideas with others. They either believe that they can do it all themselves or, more often, fear misappropriation, loss of ownership, and competition.

As a result, they remain soloist amongst teams, undertaking the task of building a company with a fraction of the resources they need to realize their visions. Very few have succeeded as soloists… come to think of it, no one comes to mind.

This article hopes to provide those entrepreneurs with a means to ease and mange what I believe to be the most common cause of the soloist entrepreneur – the “I don’t want to share my idea mentality.”

Collaboration is a right of passage for entrepreneurs. It is the natural transition from a single person’s idea to a team mission of realizing a collaboratively improved idea. This right of passage represents the entrepreneur’s becoming of a leader.

As an Intellectual Property Attorney, I would encourage collaboration because it is a much more certain path to an ideas successful realization of an idea. But, as that same Intellectual Property Attorney, here is the order in which I would recommend your approach on – of course – an entrepreneur’s shoe string budget:

  • File for IP Protection – You can file these under your own name, claiming exclusive ownership. But a good strategy and incentive for building a company with committed team players is to license and assign the rights to the IP to your company. Now, everyone has some skin in the game and everyone is equally protected. Often times, you can first license the idea to your company, reserving the right to revoke the license if your team members don’t follow through with their contributions.
  • Don’t be afraid! Share your idea with those you trust. Get their feedback. Build their support. Start to build a team. So what if the idea ends up being not all yours and only yours? You’ve got a team! Now, I’m not saying to share your idea with big corporations. Rather, I’m suggesting that you reach out to your personal and professional network with your idea.
    • Pros: By adding more minds into the mix, you begin to build an idea into something worth protecting and pursuing. More importantly, in the process, you’ve enabled those collaborators to feel ownership in the idea – which I find to be the best motivator in getting people to help you realize the idea.
    • Cons: Your idea is completely unprotected at this point, and you aren’t asking ones you trust to sign a Non-Disclosure Agreement. Keep in mind though – this trustee may always betray your trust and steal away with your idea… and they law doesn’t provide you with any recourse to claim that idea as yours in such circumstances.
  • Solidify your commitment to the idea and, preferably, with a team sharing a common vision for the idea. Before spending money on forming a company and securing your intellectual property, you want to make sure you (and the rest of the team) are committed to realizing the idea. As a patent attorney, there is nothing that makes me feel worse than having my clients pay me for a patent on an idea that they don’t end up realizing.
  • Craft a Customized Non-Disclosure Agreement and IP Assignment Agreements – Not the template kind. But the kind that ensures that not only are your disclosures protected in confidence, but that any ideas that the recipient may derive from your disclosures are subject to your first right to use and ownership. Sometimes, this agreement is reached in exchange for reasonable compensation for the contributions. Having an NDA will enable you to reach out to individuals, contractors, and entities that you may need to contract with or employ in order to realize your idea. Without such an NDA coupled with an IP Assignment Agreement, you may reserve your IP rights, but will not have any rights to the contributions made by those who you’ve shared your idea with!

If you are interested in more detail related to your situation it is best to speak with an attorney.

Andrei Tsygankov is the Co-Founder and COO of SmartUp® and a partner at Founders Legal (Bekiares Eliezer LLP). As an attorney, Andrei specializes in corporate, commercial, trademark, and international business matters.

andrei

,

Who Should I Assign My Patent Rights To?

In order to transfer patent rights from an inventor (Assignor) to an entity (Assignee), the inventor must sign an assignment agreement. Upon execution, the assignment agreement become a legally binding and enforceable contract.

With the assignment, each inventor transfers the patent rights embodied in the patent or patent application to the Assignee. In turn,the Assignee has the right to make/use/sell the invention, or file subsequently patent applications claiming priority to the subject matter disclosed within the assigned patent application. Upon assignment, the inventors will no longer have any rights to the invention.

Having the application assigned to the entity who will be making/using/selling the invention may be recommended. If the rights are not assigned to an entity, then they remain with the inventor. In the case of multiple inventors, the rights remain with the inventors jointly. This means that each inventor may use those patent rights without the consent of the other inventor. This creates problems, friction, and is a recipe for conflict.

To prevent the conflict, the inventors may form an entity together. The each inventor may have a stake and voting rights in that entity. Then, the inventors may assign their patent rights to that entity. In turn, the patent rights will be controlled by a single resolution of the entity. Such resolutions may be collectively enacted by a vote of the members of the entity (e.g., the inventors). Additional details about how a company can control patent rights can be found here.

 

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

, ,

Who Should I List as an Inventor in My Patent?

Legally, an inventor is anyone who has contributed to the conception (not the realization) of what is claimed as the invention you wish to protect. So, if an employee conceived of Feature 4, but you only wish to Patent Features 1-3 and 5, the inventor does not need to be listed in the patent application. In general, however, it’s good practice to list everyone that has made a contribution to the conception of the invention.

Scenario One
When a first co-founder provides all of the ideas for the invention, and the second co-founder performs the steps in making the ideas into a developed app, the patent application should only list the first co-founder as an inventor.

Scenario Two
If the founders conceived of the ideas for the invention but hired employees/contractors to develop the app, only the founders should be listed as inventors.

Scenario Three
If an employee provides an idea for the invention, but his employer provides all of the resources and financial support in realizing the invention, the employee must be considered an inventor. However, in this scenario, the employee may be obligated by Employment Contract to assign his patent rights for the invention to his employer.  In this instance, the employer may be considered an ‘assignee’ of the invention and will own all of the rights to the invention. The employee’s listing as an inventor will merely be a formality.

You can read our latest blog article on assignments here: Who can be considered an inventor on my patent application?

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

,

Should I Assign My Patent Rights to My Company?

I recommend that my clients assign their patent rights to an legally formed entity in which they are an owner (their own company).  As general practice, patent rights should be assigned to the entity practicing those patent rights.

Firstly, assigning the rights to your company gives the company a legitimate right to make, use, and sell the patented invention.  If you don’t assign those rights, you must at least license those rights to the entity in a licensing agreement.  The licensing creates a substantial amount of work that can be avoided with a simple assignment of your rights.  Although the license documents may seem like “formalities” (since you are also the owner of the company), because the company is a legal entity, it has several benefits such as, for example, protection from product liabilities associated with the product (protections that an individual does not have).  Without adhering to proper practices, you would risk exposing yourself, personally, to that liability.

Second, you should be putting the public on notice that your company has the patent rights to the product it is selling.  We recommend using our Patent Seal certificate to meet the legal notice requirements.  Without putting the public on notice, you will be required to identify and directly notify your market for products that may practice your invention or portions thereof. There is a nice explanatory video here.

Third, by assigning your patent rights to your company, you build your company’s asset valuation. This will add to the company’s valuation as an intangible asset which is of substantial interest to both investors and lenders.  Investors appreciate the value of an intellectual property portfolio held by a company, and it is common practice for a company to put up its patent rights as collateral for a loan.

In order to transfer your patent rights as an inventor, you, in your capacity as the inventor, must sign an assignment agreement to your company.  Upon execution, you transfer your rights as the inventor in the current applications (and any subsequently filed, related domestic or international applications) to your company, where you will have the rights to the application as an owner of the company, along with the other owners of the company.

In turn, your company will be named as the Assignee-Application on any subsequent filing (and appear on the publications of any application).  This means that your will receive all of the rights to the patent/trademark application and will have the right to subsequently file applications claiming priority to the subject matter disclosed in this application.

For those hesitant to share your patent rights with the current or future shareholders of your company – consider the following.  If you do not choose to assign your rights to an entity, you may form a single-owner entity as a holding company.  The owner of this entity may be you as an individual or, alternatively, a subsidiary of your company.  The single-owner entity serves to segregate the intellectual property (IP) rights from your company, while still maintaining them in your own entity with protection against liabilities under the law.  In turn, the holding company may license the patent rights held to the company that actually practices the invention (or any other entity to which it desires to license those rights).  The entity may collect royalties (i.e., payments for the use of the invention) in exchange for the licensing the rights.  In this way, you may also use this holding company to transfer funds from your company that uses the IP to your company that owns the IP.

The difference between as “assignment” of rights and a “license” to the rights should be understood.  An assignment is a full transfer of the rights from one party (assignor) to another (assignee).  The assignor loses all of their rights after the transfer, and the assignee gains them.  A license, on the other hand, is a limited and temporary transfer of rights.  As the licensor, you may allow but regulate the use of your invention by third parties (licensee) as you please (e.g., limits in time, territory, users, costs, etc.).

 

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri