Intellectual Property refers to intangible property rights. Examples of intellectual property include things like inventions, ideas, creations, products, and original works of authorship.
Who owns an invention or creations depends on a couple of things—who invented it, and the context surrounding its creation. If the invention was created as part of an employee’s job, the invention may actually be the intellectual property of the employer, since it was created in the context of employment.
What is Work Product?
Work product is an employee-created creation or invention that becomes property of the employer. The term “work product,” as well as specific ownership of the invention, may be specifically defined in the employment contract.
What is a Pre-Invention Assignment?
A pre-invention assignment is a contract (or part of a contract) that gives the employer the rights to complete control to patent, copyright, and licensing of everything that the employee creates (all inventions, creations, products), even before the employee creates them.
The employer essentially will have the absolute right to use the employee’s invention as it sees fit. The employee will have no rights to the invention, since it becomes the property of the employer.
There isn’t really a standard form for pre-invention assignments, so it is important to read yours carefully. If you don’t understand the provisions in the agreement, you may want to consult an intellectual property attorney who can explain exactly how the agreement is structured and what rights you have under the agreement.
Many basic pre-invention assignments will have at least three parts: an assignment, a disclosure, and a power of attorney. While the basic idea of the three portions of the assignment may be the same, their effects may vary depending on how they are written. Depending on the company you work for and the nature of the agreement, there may be other provisions as well.
What is the Assignment?
The assignment portion of the agreement requires the employee to legally transfer (or assign) their inventions to the employer. This is the most important part for the employer’s ownership of the invention and the associated patent. Assignments can vary depending on how they are written, so you’ll want to make sure you read this provision very carefully.
What is the Disclosure?
The disclosure provision is important to notify the employer of what exactly it owns. The employee will be required to disclose inventions and inform the employer of the invention’s existence.
Depending on how the agreement is drafted, the disclosure provision may be limited to work that is done related to the employer’s actual or prospective business or any work using the employer’s resources. Other provisions may be much broader, covering anything that the employee creates during their employment.
What is the Power Of Attorney?
The power of attorney provision in the pre-invention agreement allows the employer to register ownership rights without the employee, making it easier to apply for a patent without the employee’s help.
Even if the employee is willing and able to help the company register the invention and apply for the patent, the power of attorney allows the employer to administer ownership rights on its own.
What is the Holdover Clause?
Some pre-invention assignment agreements may include something called a “holdover clause,” which would extend the assignment requirement for a period of time after employment ends. While the employer may use this clause because they’re concerned you may leave employment without telling them about an invention you created during your employment, holdover clauses can be problematic.
In order to be enforceable, a holdover clause must be for a specifically stated, limited period of time, and apply only to inventions created as a result of work done for the former employer. Depending on what state you live in, a holdover clause may be enforceable only if it applies to inventions created using the former employer’s trade secrets, which is an even more restrictive interpretation.
While an employer can’t force you to sign a pre-invention assignment, they can refuse to hire you if you don’t sign.
Does My Employer Have Rights to What I Invent Outside of Work?
Typically, no, but you should take care to read the pre-invention assignment carefully before you sign. Usually, any projects that pursued outside of work are the intellectual property of the individual employee.
Does My Employer Have Rights to What I Made During Employment?
Review your employment agreement to see if there is a clause regarding inventions. If part of your job is to create inventions, your employment agreement most likely includes a pre-invention clause, requiring you to notify your employer of any inventions you create while employed at the company.
What If there Isn't an Employment Contract?
If there is no written agreement, your employer could still attempt to argue that there was an oral agreement in place while you work for the company. Your employer may have a claim to the inventions, but this claim will be harder for them to prove if there is no written agreement.
Do I Need a Lawyer for a Dispute Over an Employee Invention?
It is a good idea to talk to an experienced employment lawyer, who can explain how the laws in your state may affect your intellectual property and employee ownership rules. A lawyer can review your employment agreement and help you understand the best way to protect your intellectual property.
You may also consider consulting an intellectual property lawyer, who can help you understand the best way to protect your intellectual property and inventions that are not covered under a pre-invention agreement.