Do I own my Invention?

Introduction:  Do I own my invention?  It depends.  What past agreements have you signed and what do the agreements say?  Typically, the agreements in question are current or past employment agreements.

The Court of Appeals for the Federal Circuit looked at this question and found an agreement signed by the inventor prior to the conception of the invention failed to convey ownership of the employee’s inventions to the employer.  See Omni Medsci Inc. v Apple Inc., Case 20-1715, (CAFC August 2, 2021).

Discussion:  Employers frequently require employees to sign employment agreements at the date of hire. These employment agreements typically require the employee to assign ownership of an employee invention that arises from or during employment.  The terms of these agreements vary and it is important to review the agreement (even an agreement signed with a past employer) when evaluating whether to exploit the invention and pursue patent protection.

As stated, the terms of these agreements vary widely.  The agreements may not be valid.  You need competent legal review.

In the recent case of Omni Medsci v Apple, the inventor was an employee of the University of Michigan.  The inventor had signed an agreement with the University stating that “Patents and copyrights issued or acquired as a result of or in connection with . . .  activities conducted by the (employee) and supported directly or indirectly . . . by funds (of) the University . . . shall be the property of the University.”

The employee’s agreement with the University further provided that patents, etc. resulting from activities which have received no support, direct or indirect, from the University shall be the property of the inventor.  Further the agreement stated that in situations involving University supported activity and independent activity of the employee, the intellectual property shall be owned as agreed upon in writing and in advance of an exploitation thereof by an agreement between the University and the employee.  In other words, the parties agreed to agree at a future time.  There was no agreement regarding jointly support inventions at the time the employee signed the agreement with the University.

The employee filed and was awarded several patents.  The University asserted that it owned the patents and the employee never appealed from the University’s decision.  However the patents were, in fact, awarded to the inventor.  The inventor/employee assigned ownership to his company, Omni Medsci.

The employee later sued Apple for infringement of the patents.  Apple sought to dismiss the lawsuit on the basis that Omni did not own the patents.  The dispute was therefore centered upon the terms of the original employment agreement with the University/employer.

The Court ruled that the agreement did NOT constitute an automatic assignment of ownership but rather was a statement of future intention to assign ownership to the University (in certain circumstances).  Therefore there was no existing agreement regarding invention ownership.  Thus the inventor was deemed to be the owner of the patents and entitled to sue Apple for infringement.

The Court confirmed that language of an employment agreement can constitute a present agreement of the employee/inventor to assign ownership automatically to the employer of a future invention.  Alternatively, the employment agreement may merely express a promise to assign patent rights in the future.  The issue is what does the employment agreement say.  The Court noted that the general rule is that the invention is owned by the inventor.  There must be an express grant of the inventor’s rights to the employer if the employer is to obtain those rights.

Here the Court determined the above quoted text of the employment agreement did not presently automatically assign the inventor’s rights to the employer, but rather, at most, “reflects a future agreement to assign rather than a present assignment”.  The Court confirmed its “focus here is not on any magic words, but rather on the absence of an active verbal expression of present execution” in the above quoted language of the employment agreement.  The Court looked at the grammar.  Was it a present assignment or simply an agreement to agree in the future, based upon the specific circumstances in which the innovation was conceived?   (Note the employment agreement outlined three different scenarios for possible creation of an invention, each with differing outcomes regarding ownership.)

Conclusion:  The Court looked at the specific words and tense of those words, i.e., present or future tense.  The Court felt the text indicated a future agreement would be made regarding ownership.  (From my distant days in law school, an agreement to agree to something in the future is not enforceable.)

The Court suggested language would be deemed to be a present intention to assign ownership, i.e., “the inventor ‘agrees to grant and does hereby grant’ title to the patent”.  The Court explains that this language constitutes a present automatic assignment of a future interest, i.e., a patent arising in the future.

The distinctions are subtle.  You need to look carefully at the agreements you may have signed in the past to determine if you are the actual present owner of the invention.

Note further that this is just a part of the analysis that you should perform regarding the current or past employment agreements.  Other topics include the scope of work you agreed to perform during employment and whether the invention is related to that work, whether the invention was created using employer resources or funding, when was the invention conceived and reduced to practice (practicality demonstrated), etc.

Finally, the Omni Medsci decision drops hints that there is a story behind the story.  First, the employee/inventor took an approximate 1 year leave of absence from the University.  During this time, the employee filed multiple applications for patent.  Second, it appears that Apple did not argue that the work subject of the patents was related to the employee’s work for the University.

 

© David McEwing, 2021