Patent Ownership FAQ

Whether you work at a large Fortune 500 company or a small business, if you are an inventor and you've patented a fantastic product, you might wonder, "Who owns the rights to the patent?" Is it you or your employer?

This FindLaw article discusses Frequently Asked Questions (FAQs) about patents and invention ownership.

What is a patent?

A patent is a type of intellectual property protection granted by the United States Patent and Trademark Office (USPTO). Patent protection provides exclusive ownership rights to inventors or assignees for a specific period of time. These rights allow patent owners to exclude others from:

• Selling the patented invention
• Using the patented invention
• Making the patented invention
• Importing the patented invention

What rights does an inventor have in a patent?

Inventors hold their patent rights until they transfer (assign) them to someone else. Employers may require employee inventors to assign their rights to their patents to the company.

Can multiple people own a patent?

Yes, many inventors can hold the same patent. Each inventor is a part owner if they contributed to the invention. Unless the inventors have otherwise agreed, each is free to use the invention without interference from the others. So, each inventor can independently make, use, sell, license, or assign the invention.

If an employer wants complete control over an invention, the employer should arrange for all employees who have worked on an invention to assign their rights to the employer through an assignment provision or assignment clause in their employment contract. These agreements are common in the employment relationship.

How does an employer gain ownership of employees' inventions?

While the U.S. Patent Act (35 U.S.C.) has provisions on employer-employee relationships and patent ownership, no laws require an employee to assign an invention to an employer.

Employers can ensure their ownership through several types of agreements. If an employee invents something within the scope of their employment or uses the employer's resources, the employer may have a legal claim to the invention.

In an invention-assignment agreement, a company requires an employee to sign over all work-related inventions. Some state laws like California prohibit employers from requiring employees to sign over inventions conceived outside of work on their own time.

These agreements may be part of an initial employment agreement or made at a later point. If an employer makes such an agreement with the employee, the employer must offer some consideration.

Consideration is some valuable benefit, other than continued employment, to the employee. The employer could offer stock options to the employee in exchange for such an agreement.

If a company hires an employee to invent, the employee will likely have an obligation to assign invention rights to the employer. It is important to document the employee's hiring for invention purposes in case a dispute arises. Having a written agreement is the best insurance.

Who owns the inventions of outside contractors?

Companies sometimes hire outside contractors to help work on research or development projects.

If a contractor invents something, ownership of the invention may be complex. Under ideal conditions, all inventors concerned will have signed an assignment agreement.

What are "shop rights"?

Shop rights are a company's right to use technology whose development it supports. This is not the same as an assignment. It gives an employer who provided funding or work time for the project nonexclusive royalty-free rights to use technology. The employer holds personal shop rights and cannot assign or transfer them.

To ensure that an employer will have shop rights, the employer should inventory patents granted to its employees and check records to determine how company time and resources were used in their creation.

What happens if different inventors work for different companies?

Companies often collaborate on inventions. Each company might end up being a part owner of the patent. Each company would be free to use or license the invention without being accountable to the other companies.

Before collaborating with other companies, businesses should create a written agreement that outlines each company's rights to the invention. It's essential to have a clear understanding outlining the rights and responsibilities of each party. This is important to have in place for confidential information and future inventions.

How can I check the ownership of a patent?

As a business owner, it is important to protect your own intellectual property. It is also important to not infringe on others' ownership of IP protections. You can check the ownership of a patent by searching the USPTO database.

How long does patent ownership last?

Patent ownership durations vary:

• Utility patents last 20 years from the date of filing your patent application.
• Design patents usually last 15 years from filing, though the length is only 14 years for design patents filed before May 13, 2015.

The scope of employment and the employer's business may impact the period during which an employee's work may result in patent ownership rights for the employer.

Speak to an Attorney About Your Patent Rights

If you have questions about patent protection, consult with a patent law attorney.

For more information on employer rights or employee rights on patents, visit FindLaw's Law Regarding the Rights to Inventions Made by Employees page.

For more information about other intellectual property rights, such as copyright law, trademarks, or trade secret information, visit the FindLaws Intellectual Property section.