Employer Versus Employee Part I: Invention Assignment

When an employee obtains a patent on an invention conceived while in another’s employ, who owns the patent? The general rule of invention assignment in U.S. common law is that employees retain ownership of patents on their inventions, unless the employee was employed to invent. However, if the employee was employed to invent, then the employer has the right of ownership for patents covering the employee’s inventions. This latter exception is known as the “employed-to-invent” doctrine.

Another question regarding patent ownership also arises in the employment context. Who owns the patent if an employee uses the employer’s equipment and resources in the development of the invention? Under these circumstances the courts may find that the employer owns the patent or may grant the employer a “shop-right,” i.e., a nonexclusive, nontransferable, royalty-free license to make or use the invention during the life of the patent even if the employee was not employed to invent. This is particularly true if the invention process occurred during the hours of employment.

Case history regarding invention assignment is remarkably captivating. Many of the cases involve the U.S. government as the employer. For example, one of the early cases involved a U.S. officer, Sibley, close to the time of the Civil War who had obtained a patent for a conical tent. Sibley had licensed his conical tent patent to the U.S. government for use by the U.S. army. Sidley later assigned half of his license royalties to another officer named Burns. Sibley, however, defected to the Confederate army sometime after he assigned half of his royalty interest to Burns. The Court treated Sibley’s and Burns’ contract (i.e., license) rights separately. Sibley’s rights to royalties were not at issue in the case and had been extinguished because of his disloyalty to the Union. The U.S. Supreme Court, however, affirmed Sibley’s underlying patent rights as support for Burns’ right to royalty payments. (Burns’ had been loyal to the Union.) The U.S. Supreme Court stated:
If an officer in the military service, not specially employed to make experiments with a view to suggest improvements, devises a new and valuable improvement in arms, tents, or any other kind of war material, he is entitled to the benefit of it, and to letters patent for the improvement from the United States, equally with any other citizen not engaged in such service; and the government cannot, after the patent is issued, make use of the improvement any more than a private individual, without license of the inventor or making compensation to him.

In the present case, there is no question of the right of Sibley to the improved conical tent. He received a patent for the improvement in April, 1856, and, by the contract with him, the United States recognized his right to it and to compensation for its use.

See United States v. Burns, 79 U.S. 246 (1870). Other significant cases in the common law history of invention assignment include Solomons v. United States, 137 U. S. 342 (1890); Gill v. United States, 160 U.S. 426 (1896); and United States v. Dubilier Condenser Corp., 289 U. S. 178 (1933).

Related to the history of common law invention assignment doctrines is the law governing pre-invention assignment contracts, which will be treated in a subsequent post.

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