One of the sticky areas of intellectual property is who owns the rights to an invention created by an employee during his or her work for an employer. In general, current US intellectual property law starts with the assumption that the inventor owns the right to an invention. It's generally considered prima facie evidence to support patent ownership. But some exceptions do exist.

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The first and most obvious situation when the employer owns the rights to an invention is when the Employment Agreement officially assigns invention rights. To be valid, the Employment Agreement must be written and it must detail the nature of the invention or provide a sufficiently specific description of the invention. The terms of the assignment cannot be grossly unfair. This last criteria is referred to as an unconscionability standard. Technically, the inventor can always assign invention rights to anyone, including employers, but not all states actually recognize assignments pursuant to Employment Agreements unless the employee signs a state-certified written notice of its effects on his or her rights as an inventor. States requiring such notification include:

  • California
  • Delaware
  • Illinois
  • Kansas
  • Minnesota
  • North Carolina
  • Utah
  • Washington

In these states, the court looks closely to ensure that the inventor receives appropriate compensation. Even in states that don’t recognize these limitations, gross unfairness or lack of compensation can make the Patent Assignment void.

The second situation in which the employer owns the rights to an invention occurs when the contractor or employee is hired specifically to create the invention. In this case, the requirements for fairness and communication are even stricter than with a standard Patent Assignment. Even if the invention is the whole object of the employment, an agreement that is grossly unfair may be overturned. So long as there's sufficient consideration for the hiring, however, these assignments generally hold up better in court than do general assignments, despite the stricter standards. However, as with general assignments, the contractor or employee must be fully informed of the effect of the assignment on his or rights to the invention.

Get Started Protect your intellectual property Create IP documents and ask a lawyer your questions.

Get Started Protect your intellectual property Create IP documents and ask a lawyer your questions.