Patent It Yourself - PDF Archive

440 | Patent it YOURSELF
the employer’s business, without paying the employee) on
inventions made using company time, facilities, or materials.
If you have an EA, it will almost certainly require that
you assign (legally transfer) to your employer all inventions,
that are:
1. made during the term of employment (note that
Form 16A asks you to list all inventions you owned
prior to employment—those are excluded from the
agreement)
2. related to the employer’s existing or contemplated
business
3. made by using the employer’s time (that is, the time
for which the employee is paid), facilities, or materials,
or
4. made as a result of activity within the scope of the
employee’s duties.
Note that under items 1, 2, and 4, even if an employee
makes an invention at home, on the employee’s own time,
the employer still can be entitled to ownership.
Also, you’ll usually be bound to disclose all inventions
to the employer (so the employer can determine if they’re
assignable). Lastly, most EAs will require you to keep your
employer’s trade secrets confidential during and after your
employment. Some states, such as California, have enacted
statutes (Calif. Labor Code, Sections 2870 et seq. and 2860)
prohibiting the employer from requiring the employee to sign
any EA that is broader than the foregoing. For example,
under such statutes the employee can’t be made to turn
over all inventions, no matter where and when made, to the
employer. Similarly, the employer is prohibited from providing
an EA that states that everything an employee acquires from
the employer (except salary) belongs to the employer.
EXAMPLE: Griselda is an engineer employed by Silicon
Valley Chips (SVC) to design integrated circuits. Griselda’s
EA requires her to disclose to SVC all inventions
made during the term of her employment at SVC
and to assign to SVC all inventions which relate to
integrated circuits or SVC’s business, or which she
makes using SVC’s time, facilities, or materials. While
employed, Griselda invents a new toilet valve at home
in her workshop. The toilet valve is clearly outside
the scope of SVC’s business and therefore, Griselda
owns it totally. However, she should disclose the valve
to SVC (regardless of whose time it was invented on).
Later, Griselda, while still employed but on vacation, is
cogitating about an integrated circuit design problem
she had last week at work. She comes up with a valuable,
less-expensive integrated circuit passivation technique.
Since this invention relates to SVC’s business, SVC
owns it and Griselda must disclose it to SVC and sign
any patent application and assignment on it that SVC
requests.
If the invention is clearly within the scope of the EA, or
is in a gray area, I still recommend first disclosing it to the
employer. If the employer isn’t interested in the invention
after reviewing it, the employee can apply for a release, a
document under which the employer reassigns or returns
the invention to the employee. (The employer may retain a
“shop right” under the release—that is, a nontransferable
right to use the invention for its own purposes and business
only.)
If the invention is in the gray area and the employer
wants to exploit the invention, the employee can then try
to negotiate some rights, such as a small royalty, or offer to
have the matter decided by arbitration. Failing this, a lawsuit
may be necessary, but I favor employees disclosing “grayarea”
inventions so that a cloud of ownership uncertainty
will not engulf their invention.
Most EAs also require the invention-assigning employee
to keep good records of inventions made and to cooperate
in signing patent applications, giving testimony when needed,
even after termination of employment. Most companies
give the employee a small cash bonus, usually from one to
several thousand dollars or more, when the employee signs
a company patent application. This bonus is not in payment
for the signing (the employee’s wages are supposed to cover
that) but to encourage employees to invent and turn in
invention disclosures on their inventions. Some employers,
such as Lockheed, give their inventor-employees a generous
cut of the royalties from their invention, and some will even
set up a subsidiary entity (partly owned by the employeeinventor)
to exploit the invention. Most, however, prefer to
reward highly creative employees via the salary route.
Legislation has been proposed and engineering organizations
have sought to expand the rights of the employed
inventor. One of these proposals is to change the U.S. to
the German system, where employees own their inventions
but usually assign them to their employers in return for a
generous cut, such as 20% of the profits or royalties.
E. Assignment of Invention
and Patent Rights
Suppose you’re an employed inventor and you make an
invention on your employer’s time and your employer wants
to file a patent application on it. Under the law, every
patent application must be filed in the name(s) of the true
inventor(s). This raises a problem. If it’s filed in your name,
how will the employer get ownership? Since inventions,