You’re about to file your patent application. You’re sure the invention it covers will be profitable. Your employees and research collaborators contributed to this invention. You’re pretty sure they all agreed that you would be the owner of the invention.
How do you confirm ownership of the invention and entitlement to the patent? Can you rely on pre-existing agreements with employees and collaborators? Will your firm own the patent merely because it was developed by your employees?
Relying on existing agreements and your rights as an employer without first obtaining an express assignment of all IP rights underlying the invention and a proper review of those existing agreements can be dangerous.
Here’s why.
Who is entitled to a patent?
Usually, a patent will only be granted to:
- the inventor; or
- a person entitled to have the patent assigned to the person on grant (like an employer of the inventor); or
- a person who derives title from either of those persons (like under a written assignment).
Who is the inventor?
The inventor is any person whose contribution to the invention was necessary for the final concept of the inventive concept. The inventive concept is distinct from its verification and reduction to practice (e.g. checking and testing the invention). Verifying and reducing the invention to practice does not affect the identity of the inventor. After a patent application is submitted, others (e.g. disgruntled employees or research collaborators) can allege they made a material contribution to the invention, and that the patent should be granted to them instead of the applicant, or as a joint owner with the applicant. If the matter is litigated, an expensive and time consuming judicial analysis of the invention and the development process may be required to determine the correct inventor.
Who is entitled to have patents assigned to them?
Certain relationships may give rise to an entitlement to the patent. For example, when an employee is employed to carry out research to achieve a solution to a particular problem capable of patent protection, where that invention is made within the scope of the employee’s employment, the employer will likely be entitled to the patent. However, where express or sufficiently clear agreements with the employer are absent, the employer relies on an implied term of assignment, or common law or equitable principles that apply because of the special nature of an employment relationship.
Employees may have several grounds to dispute the employer’s entitlement in those circumstances, including:
- that the employee was not actually an employee, but an independent contractor to which the common law or equitable principles of assignment do not apply;
- that the acts of invention were outside the person’s employment or duties as an employee.
For example, in Victorian University of Technology v Wilson,[1] the inventors were academics at a university. These inventors were engaged by the university to undertake academic research for the purpose of preparing and presenting academic papers. The engagement didn’t include inventing internet based e-commerce systems the subject of the patent. So, notwithstanding the universities’ IP policy assigning IP rights in the course of the inventor’s employment to the university, the university did not have a claim to the patent application. In Spencer Industries Pty Ltd v Collins,[2] a sales manager, with machinist qualifications and technical skills, had no duty to invent products for his employer, nor was given any direction to do. Accordingly, the employer had no right to the patent application.
Who can derive title to a patent?
Written agreements entered into between the entity that eventually becomes the patent applicant and research collaborators before an invention is conceived can provide for an assignment of IP underlying the invention. However, the scope of the assignment may be unclear, particularly where the parameters of a research project change after the research programme commences. Further, it may be unclear in what capacity employees of the research collaborator are researching, or whether employees of the research collaborator have properly assigned their IP to the research collaborator (for the purposes of the research collaborator’s assignment to the patent applicant). In those circumstances, research collaborators (or their employees) under such agreement may dispute whether all of the IP rights on the subject of patent application were captured by the scope of the assignment.
What not to do before filing a patent?
Some advisors recommend the patent applicant obtain a written acknowledgement from research collaborators and inventors, confirming a previous assignment of IP rights underlying the invention to the patent applicant. Our view is that this may be insufficient in many circumstances. The risk is particularly high when the relationship or agreement which the patent applicant is seeking to confirm is uncertain. Confirming an assignment that purportedly arises from an uncertain relationship or agreement arguably makes the confirmation itself liable to attack on grounds that the relationship or agreement (although confirmed) never in fact resulted in the assignment. We are unsure how confirming an assignment which never in fact occurred assists the patent applicant. These advisors may be seeking to rely on equitable principles (which, to date, are undeveloped on this issue), or hoping the Courts apply a commercial construction (though nothing binds them to do so). We recommend a much less risky approach that does not invite a future costly dispute.
What to do before filing a patent?
Patent applicants should, wherever practicable, obtain from research collaborators and employee inventors an express assignment of any IP rights subsisting in the patent application (that have not already been assigned). This should be obtained as close as possible before the filing of the patent application. This will, so far as possible, put entitlement issues beyond doubt. There is unlikely to be any additional cost involved, but may save patent applicants substantial time and money in the future by avoiding a potential dispute.
If you have any queries about protecting your IP, please contact Rhys Williamson.
[1] (2004) 60 IPR 392.
[2] (2003) 58 IPR 425.
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