Invention Ownership Issues Who Owns Your I.P.? April 24, 2012 Albin H. Gess
How Do We Create Intellectual Property (IP)? PATENTS: Prepare and prosecute patent applications to obtain a patent grant COPYRIGHT: Fixing a work in a tangible medium TRADEMARK: Use of mark in connection with goods or service in commerce 2
Personal Property Patents and patent applications are personal property. 35 U.S.C. 261 3
What Is It? A patent is a grant from the U.S. Government to the patentee, his heirs or assigns, of the right to exclude others from making, using, offering for sale, or selling the patented invention in the U.S. 4
First US Patent The first time such a property was created in the U.S. (July 31, 1790) 5
First US Patent 6
First US Patent Issued to Samuel Hopkins, an individual from Vermont A Process of Making Potash and Pearlash. Patent grant was signed by President, George Washington, Secretary of State, Thomas Jefferson, and Attorney General, Edmund Randolph. Only three patents issued that year. 7
First Numbered US Patent It was 46 years later before patents got numbers 8
Cog Wheel 9
Who Can Create This Property? The U.S. Government For now only a natural person may apply for a patent - 35 U.S.C. 102 The America Invents Act (AIA) changed this. In 2013 a corporation will be able to apply for a patent 10
Only the Inventor Can Apply The Applicant must be the inventor 35 U.S.C. 101 An Applicant for patent should be made by the inventor, except as otherwise provided 35 U.S.C. 111 AIA allows a corporation to apply for patent when it can show ownership, a transfer of title from the inventor. 11
Must Swear That He is the True Inventor Every U.S. application requires an oath by the applicant that he is the original and first inventor 35 U.S.C. 115 The applicant (inventor) is the owner of the application and patent 12
All Inventors Must Apply If there are two or more inventors, all must apply for the patent jointly 35 U.S.C. 116 13
Only Need to Contribute to One Claim Each joint inventor must contribute to the concept of at least one claim in the patent. Ethicon, Inc. v. U.S. Surgical Corp. 135 F.3d 1456 (Fed. Cir. 1998) 14
Each Joint Inventor Owns the Patent Joint inventors own the patent application and patent as tenants in common. 15
Rights of Ownership Tenants in Common Joint Owners Without agreement to the contrary, each joint owner may make, use, offer to sell, or sell the patented invention without consent from or accounting to the other joint owners. 35 U.S.C. 262 16
Rights of Ownership Each joint inventor is capable of granting a license to third parties without consent of the other inventors. Schering Corp. v. Roussel ICLAF SA 104 F.3d 341 (Fed. Cir. 1997) 17
Classes of Owners There are only three classes of owners: patentee (inventor), his heirs, or his assigns. 35 U.S.C. 154 18
Owners Can Transfer Patent Rights Transfer of rights to a patented invention occurs by: Writing Common law Court decisions Statutory law, State or Federal 19
Ownership or Right to Use There are two kinds of transfers: An assignment of ownership interest transfer of title A license to use CMS Industries Inc. v. LPS Int. Ltd. 643 F.2d 289 (5th Cir. 1981) 20
Kinds of Ownership Transfers There are three kinds of assignments: All right, title and interest An undivided part The whole patent for a limited geographic area Waterman v. Mackenzie 138 U.S. 252 (1891) 21
License Any transfer that is less than these three is a license. Waterman v. Mackenzie 138 U.S. 252 (1891) 22
No Oral Transfers Oral agreements to assign patent rights. Dalzell v. Dueber Watch Case Manufacturing Co. 149 U.S. 315 (1893) Oral Contracts to transfer patent rights enforceable in 1893 35 U.S.C. 261 changed this law. No oral assignments possible today. 23
Recording the Written Assignment An assigned document recorded in the USPTO cuts off the rights of any subsequent purchaser for value without notice. 35 U.S.C. 261 24
Notarize the Signatures A notorial certificate on an assignment document is prima facie evidence of the authenticity of the signatures on the assignment. 35 U.S.C. 261 25
Transfer by Operation of Law Transfer of Patent Ownership based on statutory law. No writing required. 26
Three Ways A. INTESTATE Akira Akazawa v. Link New Tech. Intl. 520 F.3d 1354 (Fed. Cir. 2008) B. SECURED TRANSACTIONS Sky Technologies LLC v. SAP AG & SAP America Inc. 576 F.3d 1374 (Fed. Cir. 2009) Ruling en banc denied. cert. denied. C. COMMUNITY PROPERTY Enosys v. Nextel F.3d (Fed. Cir. 2010) Patent rights acquired during marriage is community property. 27
Employer-Employee Patent Transfer Without a Writing Employer Employee Relationships Employee could also be a contractor Who owns what? 28
Three Typical Situations The three common scenarios: A. Employee/inventor is employed to do research and development - hired to invent. B. Employee/inventor is not hired to do research and development but acts within scope of employment or uses employer s resources in making the invention. C. Employee/inventor is not hired to do research and development, acts outside scope of his employment, and uses his own resources to make the invention. 29
Employed to Invent Scenario A. The employer owns the inventions, applications and patents. Contract implied in fact Teets v. Chromalloy Gas Turbines Corp. 83 F.3d 403 (Fed. Cir. 1996) Standard Parts Company v. Peck 264 U.S. 52 (1924) 30
Shop Right Scenario B. The employer gets a royalty free non-transferable license. Contract implied in law. Shop Right Solomons v. U.S. 137 U.S. 342 (1890) U.S. v. Dubilier Condenser Corp. 289 U.S. 706 (1933) The employee retains title. Wommack v. Durham Pecan Co., Inc. 715 F.2d 962 (5th Cir. 1983) 31
Garage Inventor Scenario C. Employer gets nothing. Employee inventor retains ownership of the invention, application and patent. No implied contract. 32
Ownership Under Federal Law Federal Statutes Restrict Ownership of Inventions By Employees Working Under Government Contract. 42 U.S.C. 2457 (NASA) 42 U.S.C. 5908 (Department of Energy) 35 U.S.C. 200-212 (Bayh Dole Act of 1980) 33
NASA 42 U.S.C 2457 Government takes title if invention is made during research and development work performed under government contract or is related to work performed under government contract. 34
Department of Energy 42 U.S.C 5908 Government takes title if invention is made during research and development work performed under government contract or is related to work performed under government contract. 35
Contractor Takes Title 35 U.S.C 200 et seq. Bayh Dole Act Gives universities, non-profits and small business contractors working on projects funded by the Federal Government the right to take title to inventions arising from the Federally funded work. 36
Commercialize Inventions Purpose: To encourage commercializing of the inventions made as the result of the government funded contracts. 37
Inventor is Owner Under Bayh-Dole Board of Trustee of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., et al., (US 2011) Decision June 6, 2011 Question Presented: Whether a contractor s right under Bayh-Dole to inventions made under the contract can be terminated unilaterally by the inventor assigning his rights to a third party. Yes, rights to an invention belong to the inventor. The employer does not automatically get title under the Bayh-Dole Act. 38
Example of Assignment ASSIGNMENT WHEREAS, I/WE the undersigned,, citizen of the United States, residing at ; have invented a new and useful HAND OPERATED CUTTING TOOL attorney Docket No. for which an application for United States Letters Patent was filed on, and assigned Serial No. [Authorization is given hereby to insert the application serial number and filing date when it becomes available]; and WHEREAS, I/we verily believe myself/ourselves to be the original, first and sole inventor(s) of the invention set forth in said application for Letters Patent and represent that I/we have not conveyed or hypothecated any right or interest therein; and WHEREAS, a corporation of the State of Delaware, sometimes hereinafter referred to as "said assignee," having a principal place of business at is desirous of acquiring the entire and exclusive right, title and interest in and to said invention, and any and all patent applications which may be filed thereon, and any and all Letters Patent which may be granted or issued therefor in the United States and throughout the world, including any and all divisions, continuations, reissues and extensions of any of the foregoing. NOW, THEREFORE, in consideration of obligations voluntarily assumed by me/us and other good and valuable consideration, and for the further consideration of the sum of One Dollar ($1.00) paid to me/each of us, receipt of which is hereby acknowledged, I/we do hereby sell, assign, transfer and set over unto said assignee, its successors and assigns, the entire and exclusive right, title and interest in and to said invention, patent applications and Letters Patents which may be granted or issued for said invention in the United States and throughout the world, including all divisions, continuations, reissues and extensions thereof, and all international priority rights associated therewith, all to be held by me/us had this assignment not been made; and I/we hereby authorize and request the Commissioner of Patents and Trademarks of the United States and duly constituted authorities of foreign countries to issue all Letters Patent relating to the foregoing assigned rights to said assignee, its successors and assigns. 39
Example of Assignment I/We agree that I/we will at all times keep said assignee advised of my/our whereabouts; and I/we will promptly, upon request of said assignee, and without further compensation, but at no out-of-pocket expense to me/ourselves, do all lawful acts, including the execution of all necessary documents and the giving of testimony that, in the opinion of the assignee, its successors and assigns, may be necessary or desirable for obtaining, sustaining, or reissuing United States and foreign Letters Patent relating to the foregoing assigned rights, and for perfecting, affirming, recording, and maintaining the title of said assignee, its successors and assigns thereto; and that I/we will generally cooperate to the fullest extent in all matters pertaining to said invention and patent and said assignee's title thereto. Dated: By: State of California County of On before me, (here insert name and title of the officer), personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 40