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David Prange
Josh Strom

A continuing challenge for companies in the United States is securing the intellectual property rights—and particularly rights to patentable inventions—developed by their employees.

The presumptive owner of a patentable invention generally is the human inventor; the company, despite employing the inventor, does not own the invention simply because of the employment relationship. In most cases, the inventor must transfer ownership of the invention to the company for the company to take title to the intellectual property. If the transfer or assignment agreement is incomplete, vague or uses language addressing future intent, the agreement or relationship may become problematic at the time a related patent is sold or asserted. This article provides several best practices for ensuring that an employee’s rights in a patentable invention are appropriately transferred to the company-employer.

Generally, the lack of an express assignment agreement from an employee to the company-employer may lead to the company not owning an invention made by its employee. This may occur even when the employee creates a patentable invention on the employer’s time using the employer’s resources. Absent an express assignment, the employer has only a “shop right.” A shop right is a nonexclusive, nontransferable, royalty-free license to use the invention. The employee-inventor remains able to license the invention to others, and, in a worst case, competitors of the employer.

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