Who Owns Intellectual Property, The Inventor Or The Employer?

Owning an invention patent is definitely a dream come true for most inventors. However, the biggest debate that has continued on in recent years is who exactly is supposed to own an intellectual property (IP) for an invention made by an employee working under a specific organization? When you create an invention during employment, then you own the patent to it. However, there are some cases in which the employer can have full rights to the intellectual property of the invention. These include:

  • You signed an employment agreement where you relinquish the IP to any invention back to your employer.
  • The employer hired you specifically for your invention skills and your sole role in the company or organization was to create and invent products on behalf of the company.

However, it is important to note that the above two scenarios are not the only ones that may give an employer the rights to an employee’s intellectual property. In most cases, employers have the right to get a shop right which is actually a limited right to the patent without having to pay you anything.

In any case keep in mind that just because an inventor is employed by a specific company this does not necessarily relinquish the intellectual property to the employer. Each situation must be critically analyzed so that the interest of the employee and the employer are considered in equal measure.

What are written Pre-invention Agreements?

Pre-invention agreements are basically contractual commitments that are signed by both the employee and the employer. The primary purpose of these agreements is to ensure that all inventions that are made by an employee during his or her time with the employer are assigned to the employer. In this case, generally employees do not have any claim to patents and the IP of any invention is exclusively owned by the employer. With that said, it is important to be careful and thorough before signing such agreements, especially if you feel that your potential invention can be ground breaking in your specific field. Remember, pre-invention agreements are legally binding and must not be violated.

Employed For Invention

There are a number of companies today that hire professionals for the purpose of invention. In this case, the employee has no claim to the IP of any invention. Additionally, no written agreements are needed here. It’s really very simple; if a company hires you because of your design and invention skills, then all inventions you create are owned by the employer. The logic behind this is based on the fact that in most cases, employees who make inventions during the time of their service often use a significant portion of company resources and it’s only fair for the employer to get rights to any invention that may arise.

The Shop Rights

The shop right applies in a situation where the employer does not actually own the right to any IP. The shop right simply allows the employer to have limited rights to a patent and it allows the said employer to use the patent without any charge and on a royalty free basis. The employer gets a non-exclusive, royalty free and non-assignable right to use the intellectual property without any liability for infringement. The Shop right is granted based on the presumed contribution of resources and materials the employer makes towards the invention. However, the following factors must be considered in determining if an employer does have a shop right to any IP:

  • The contractual relationship between the employee and his or her employer
  • Has the employee in writing consented to the use of the invention by the employer?
  • Has the employer assisted the employee in the application of the invention?

Generally, employers will have a shop right to any IP in cases where they have financed the entire invention process or if they offered assistance in the application of the patent. But all the same, the employee still retains full ownership of the patent at all times.

Intellectual Pats welcomes all inventors to call us toll free at 844-884-3504 to speak to a patent attorney to find out more about keeping your intellectual property safe.