Invention Ownership Issues Who Owns Your I.P.?ewh.ieee.org/r6/ocs/cs/presentations/2012/120123... · for sale, or selling the patented invention in the U.S. ©2012 Snell & Wilmer

Invention Ownership IssuesWho Owns Your I.P.?

April 24, 2012Albin H. Gess

2©2012 Snell & Wilmer L.L.P.

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


Personal Property

• Patents and patent applications are personal property. 35 U.S.C. § 261


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.


First US Patent

• The first time such a property was created in the U.S.

(July 31, 1790)


First US Patent


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.


First Numbered US Patent

• It was 46 years later before patents got numbers


Cog Wheel


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


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.


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 inventor35 U.S.C. § 115

• The applicant (inventor) is the owner of the application and patent


All Inventors Must Apply

• If there are two or more inventors, all must apply for the patent jointly 35 U.S.C. § 116


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)


Each Joint Inventor Owns the Patent

• Joint inventors own the patent application and patent as tenants in common.


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


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 SA104 F.3d 341 (Fed. Cir. 1997)


Classes of Owners

• There are only three classes of owners: patentee (inventor), his heirs, or his assigns. 35 U.S.C. § 154


Owners Can Transfer Patent Rights

• Transfer of rights to a patented invention occurs by:◦ Writing◦ Common law – Court decisions◦ Statutory law, State or Federal


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)


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

areaWaterman v. Mackenzie 138 U.S. 252 (1891)


License

• Any transfer that is less than these three is a license.Waterman v. Mackenzie138 U.S. 252 (1891)


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.


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


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


Transfer by Operation of Law

• Transfer of Patent Ownership based on statutory law. No writing required.


Three Ways

A. INTESTATEAkira Akazawa v. Link New Tech. Intl.520 F.3d 1354 (Fed. Cir. 2008)

B. SECURED TRANSACTIONSSky Technologies LLC v. SAP AG & SAP America Inc.576 F.3d 1374 (Fed. Cir. 2009)Ruling en banc denied.cert. denied.

C. COMMUNITY PROPERTYEnosys v. Nextel __ F.3d __ (Fed. Cir. 2010)Patent rights acquired during marriage is community property.


Employer-Employee

• Patent Transfer Without a Writing Employer – Employee Relationships

• Employee could also be a contractor

Who owns what?


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.


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)


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)


Garage Inventor

• Scenario C.• Employer gets nothing.• Employee inventor retains ownership

of the invention, application and patent.

• No implied contract.


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)


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.


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.


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.


Commercialize Inventions

• Purpose: To encourage commercializing of the inventions made as the result of the government funded contracts.


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.


Example of Assignment

ASSIGNMENT

WHEREAS, I/WE the undersigned, _____________________, citizen of the United States,residing at__________________________; have invented a new and useful HAND OPERATEDCUTTING TOOL attorney Docket No. ______________for which an application for United StatesLetters Patent was filed on ______________, and assigned Serial No. _________ [Authorization isgiven 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) ofthe invention set forth in said application for Letters Patent and represent that I/we have not conveyed orhypothecated any right or interest therein; and

WHEREAS, _________a corporation of the State of Delaware, sometimes hereinafter referred toas "said assignee," having a principal place of business at __________is desirous of acquiring the entireand exclusive right, title and interest in and to said invention, and any and all patent applications whichmay be filed thereon, and any and all Letters Patent which may be granted or issued therefor in theUnited States and throughout the world, including any and all divisions, continuations, reissues andextensions of any of the foregoing.

NOW, THEREFORE, in consideration of obligations voluntarily assumed by me/us and othergood 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, transferand set over unto said assignee, its successors and assigns, the entire and exclusive right, title andinterest in and to said invention, patent applications and Letters Patents which may be granted or issuedfor 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 heldby me/us had this assignment not been made; and I/we hereby authorize and request the Commissionerof Patents and Trademarks of the United States and duly constituted authorities of foreign countries toissue all Letters Patent relating to the foregoing assigned rights to said assignee, its successors andassigns.


Example of Assignment

I/We agree that I/we will at all times keep said assignee advised of my/our whereabouts; and I/we willpromptly, upon request of said assignee, and without further compensation, but at no out-of-pocket expense tome/ourselves, do all lawful acts, including the execution of all necessary documents and the giving oftestimony that, in the opinion of the assignee, its successors and assigns, may be necessary or desirable forobtaining, sustaining, or reissuing United States and foreign Letters Patent relating to the foregoing assignedrights, and for perfecting, affirming, recording, and maintaining the title of said assignee, its successors andassigns thereto; and that I/we will generally cooperate to the fullest extent in all matters pertaining to saidinvention and patent and said assignee's title thereto.

Dated:__________________ By:__________________

State of CaliforniaCounty of __________

On ________________ before me, ___________________ (here insert name and title of the officer), personallyappeared ____________________ personally known to me (or proved to me on the basis of satisfactoryevidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged tome that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/theirsignature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executedthe instrument.

WITNESS my hand and official seal.

Signature ________________ (Seal)

Documents

Invention Ownership Issues Who Owns Your I.P.?ewh.ieee.org/r6/ocs/cs/presentations/2012/120123... · for sale, or selling the patented invention in the U.S. ©2012 Snell & Wilmer