Ownership of Inventions
The question of ownership of an invention is sometimes a difficult one. Frequently this question becomes argumentative many years after the invention was conceived and a patent submission lodged. The contention may arise because of the economic merit of the invention which is often not apparent at an early stage. In order to establish the ownership of an invention, it is necessary first of all to establish who the inventor is and then establish whether or not the inventor, or some other person or company, is entitled to the invention.
Who is the Inventor
The first step in establishing the identity of the
inventor is the realization that a company cannot be an inventor. An invention
can only be devised by an individual person or persons. Thus, the inventor will
normally be the person who conceives the original idea. If that person
instructs a second person, such as an engineering foreman, to come up with a
prototype then the engineering foreman will normally not be regarded as an
inventor. The reason for this is that the foreman is regarded as ‘a machine’
which carries out the instructions given to it. The engineering foreman may
come up with a particularly good design of the apparatus of the invention which
may be easy to fabricate, economic in the use of materials and the like, but
even so, the first person is the inventor. However, if the engineering foreman
comes up with an arrangement that achieves some result or advantage not
contemplated by the original suggestion, then the engineering foreman may be
regarded as one of two joint inventors of the improved invention.
Who owns the Invention
Having determined who is/are the inventor(s), the next
question to be determined (where an inventor is not self-employed) is whether
the employer of an inventor is entitled to the inventor’s invention. This
question is determined by a body of common law known as ‘Master and Servant’,
i.e. employer and employee and the relationship between them. In many cases, it
is quite straightforward and clear that the employee’s invention belongs to his
employer. This will particularly be the case where the employee is employed,
for example, as a design engineer whose job it is to come up with new products
for the employer. It is also clear where there is a specific employment
contract, or other written agreement, between the employer and the employee
which specifies that any invention made by the employee belongs to the
employer.
In the absence of a written agreement, it is sometimes
difficult to determine who owns the invention. For this reason, it is highly
desirable that where a consulting engineer, or other people who are not a
full-time employees, is retained then the ownership of any invention created by
such a person should be settled in writing at the commencement of the
employment. In this way, a bitter argument at a later date as to who owns the
invention can be avoided. The more important the invention, the more bitter the
argument.
Requirements
However, it is not sufficient, for an employer to
claim an employee’s invention merely because it was made in the employer’s
time, using the employer’s tools and the employer’s materials. Under these
conditions, it may simply be that the employer is entitled to some financial
reimbursement for his time, facilities, and materials by the employee rather
than the employer being entitled to the invention. This situation may arise,
for example, where the employee is making a ‘foreign order’ in the employer’s
time and, in so doing, produces an invention. Much will depend upon the
technical field of the employee’s invention and the fields of activity, or even
proposed activity, of the employer. A good general rule to be applied is to ask
the question, ‘Is the expectation of the employer that an invention of this
nature made by one of his employees should be the property of the employer?’
For example, an employer manufacturing furniture or upholstery fabrics would
not expect to own an employee’s invention relating to a device for washing
cars, but an employer manufacturing domestic electrical appliances may well
expect to own an improved electric can opener invented by one of his employees.
Consulting Patent Attorney
There are a substantial number of previously decided
cases on questions of this nature and, therefore, such matters should be
referred to a patent attorney if there is any doubt. In this connection, it is
important to bear in mind that if too many inventors, or not enough inventors,
are named then the eventual patent may be invalid. In the first case, someone who
has not contributed to the invention has been named as an inventor. This
sometimes arises because of a desire not to hurt any feelings by leaving
someone out. In the second case, someone who has contributed to the invention
has not been named as an inventor.
In addition, where a patent for an invention is
applied for in the name of an inventor, and the inventor’s employer is entitled
to the invention, then even though the patent may be granted in the name of
the inventor, the law considers the inventor to be holding the patent in trust
for the employer. This situation sometimes arises with inventions made by a
director of a company, the director normally being employed by the company, and
the patent is applied for in the name of the director. If the company should
then experience financial difficulty and be placed in receivership or
liquidation, the receiver or liquidator of the company will almost certain
claim that the patent is the property of the company and, therefore, should be
included amongst the company assets. This claim will often frustrate the original intention of the director to accumulate assets in his own name but
liabilities in the name of the company.
The invention is a personal Property
An invention, whether the subject of a patent
application or not, is personal property, is able to be owned by an individual
or a company, and is able to be assigned, or sold, to another person or
company. In addition to assigning either an invention or the right to apply for
an Australian patent, it is normal to also assign the right to apply for
corresponding patents in foreign countries. However, the overseas patent
application right may be assigned to a person or company different from that of applying for a patent in Australia. It is normal practice to have an employee
execute an assignment in favor of his employer even though the employer owns
the invention of the employee. Such an assignment confirms the situation and
places the matter beyond doubt. Since this assignment carries the employee’s
signature, it will settle any dispute arising at a later date should the
employer and employee fall out or disagree. It is common practice for such
assignments to include a term, or condition, which requires the employee to
assist his employer to obtain patents in Australia and other countries. Such
assistance may involve the signing of forms for various countries and/or the
provision of technical assistance in overcoming Examiners’ objections.
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