Do Your Company’s Inventions Belong To You?  

How to make sure. 

Another in the Smart Start^SM Series.

(Originally printed in Priority Read – Business Law Update, June 24, 2004)

Sometimes inventions are created by accident. A company may find that a patentable concept has evolved by chance during product development or refinement or the course of normal business dealings. That’s great; but unless the company has certain intellectual property policies already in place, it cannot be sure that it will ultimately be able to own and protect that new concept.

Employees’ Rights

As a condition to employment, all company employees should sign an invention assignment document. The document will state that employees agree in advance to assign any company technology developed in the course of their employment to the company. Under U.S. patent law, inventors do not have an implicit obligation to assign company inventions to their employers, so it is important for that to be done by written agreement before any company technology is invented. Once assignments are in place, all inventions developed by employees in connection with their job responsibilities will be owned by the company. Otherwise, the company will not own those inventions.

Employees’ Records

What happens if two or more employees believe they have contributed to an invention? Or, more importantly, what happens if two or more entities claim the same invention? Since the United States still is a "first to invent" country with regard to patents, it is sometimes necessary to provide evidence of an invention date if another entity has come up with the same invention at approximately the same time. One easy way to create such evidence is to have employees involved with technology keep written records. This can be as simple as writing down notes in a bound notepad or logbook. The employee should explain the workings of any technology in writing, with his or her signature and date and the signature of a witness. This simple process can later help to prove who was involved in developing company technology and when it was conceived.

Nondisclosure Agreements

In the United States, once a company invention is publicly disclosed in any way, for example, through an offer for sale or a marketing presentation the company has one year to file its invention. Once the one-year period lapses, the offer for sale or other public disclosure will be a bar to the patentability of that invention. The United States is liberal in this regard; most other countries have an "absolute novelty" requirement. This means that with very few exceptions, no public disclosure of an invention can occur before it is filed with that country's patent office. This is important to recognize if your company has important technology that might be patented in other countries. A simple way to maintain the confidentiality of an invention without triggering the one-year period or forfeiting any foreign patent rights is to have anyone to whom the invention is being revealed sign a non-disclosure agreement (NDA). Executing an NDA before any presentation, offer for sale, or other disclosure outside a company will help preserve the confidentiality of patent rights before the application is filed.

For more information on this subject or to speak with one of our attorneys, please contact us.