INVENTORSHIP AND OWNERSHIP OF U.S. PATENTS - Patent law

Inventor ship determines initial ownership of the claimed invention and thus properly determining and listing inventor ship is in some cases every bit as important as properly listing the names of the owners on a deed to a very valuable property. The ownership of a patent vests, at least initially, in the inventor. If there is more than one listed inventor, than each inventor becomes an equal, joint owner of the entire invention.This means that neither the relative weight of each individual inventor’s contribution nor the order in which the inventors are listed on the patent application has any legal significance with respect to the initial ownership of the invention. Furthermore,under the law, joint ownership of an invention means joint ownership in the entirety.Any inventor of the patent can grant, assign, license, or otherwise dispose of his ownership right as he sees fit. Even if an individual co-invented the subject matter of just one claim among many in a patent, that individual’s right applies to the entire patent. Since the holder of a patent has the right to exclude others from practicing the patented invention, and each inventor has a right to the entire patent, a single listed inventor could assign the right to the entire patent to others as he might see fit,without consulting with or remunerating his co-inventors.

Does this sound like a recipe for disaster? It might be if one is not a ware of the ramifications of co-inventor ship and does not prepare in advance. In practice, mostastute re searchers will have an agreement in place before setting out on a joint venture.The most typical situation occurs where inventors work for a company or corporation.In exchange for their employment (e.g., salary), employees typically agree in advance to assign the rights of any of their inventions to the company. This is standard in the employment contracts of most companies in which intellectual property or patents make up or are likely to make up any of the value of the company’s business. A second example is the establishment of a collaborative research agreement between entities,in which establishment of patent ownership rights at the outset can be critical.An assignment of less than the entire rights of the invention by the patent applicant sis more commonly referred to as a license. It is possible that according to some employment agreements, the inventor is allowed a share of any of the profit that the invention makes. For example, universities in the United States typically provide a sharing arrangement with employees (e.g., professors) for profitable inventions discovered by the employee and assigned to the university. While one theoretically has the right to bargain with his future employer regarding what rights he will retain to any of their future inventions, as a practical matter this is not done except in very special situations.

Where invention ownership issues arise outside of the employer/ employee venue, contracts between the parties involved will govern the arrangement much as the employment contract does in the employer/employee venue. In some instances, one of the parties will agree by contract to assign any future patent rights to the other party, often in exchange for a predetermined royalty rate on any products, possibly in addition to various milestone and support payments. Alternatively, the parties might contract in advance not to license any co-invented subject matter to any other parties absent agreement from all of the patent holders. No matter what the arrangement, it is important that all the parties involved appreciate the fact that each inventor is a joint owner of the entire invention and thus plan their agreement accordingly.

When the rights to an invention are assigned from one party to another, that assignment needs to be recorded at the USPTO in order to function as notice of ownership. This is important because if the assignment is not recorded, then it is possible that the original assignor could assign the patent rights to a different party,in effect selling the same invention more than once.7 If the second party is not aware of the first assignment, and the first party does not record his assignment within3 months with the USPTO, it is possible the first purchaser could lose his rights to the second purchaser.8 Many inventors may have had the experience of marching down to one of their company’s patent administrators or paralegals and signing forms of assignment, which effectively pass possession of their invention from them to their employer. The signed assignment grants the employee’s rights in the invention to their employer, and the employer will subsequently record this at the USPTO. Should the employer then assign the invention to yet another party, that assignment will also need to be recorded at the USPTO as will any further assignments. Licenses are not required to be recorded at the USPTO although they may be if desired by either or both of the parties to the license.

While we have seen that many of the ownership issues that arise from inventor ship may be obviated by carefully assigning the rights to the invention in advance, this does not completely eliminate the need for proper determination of inventorship. For example, contracts assigning invention may still allow for the inventors to receive acertain percent of royalties should the invention become profitable (e.g., university inventors). However, as we will see in the next section, proper determination ofinventorship goes beyond the issue of ownership; proper inventorship goes right tothe heart of the validity of the patent it self.


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