Ownership of Employee Inventions

Who Owns Ideas Made in the Workplace?

General Rule: Employers own the rights to ideas and inventions conceived of by employees while on the job using company resources.

The legal issue fundamentally deals with intellectual property rights ownership. Typically, the main question is “Who owns the rights to an idea?” Does the employee who conceived it or the company or organization employing the individual own the invention?

Practical Solution: The easiest method to stop disputes from starting is to spell out ownership of patents, trademarks and copyrights in the Employment Agreement.

You should have your business attorney draft a good contract that carefully articulates ownership of intellectual property. Many times this is included in sections that discuss confidential information and trade secrets.

No Contract? What happens if there is not Employment Agreement or if the contract is silent concerning Intellectual Property rights? The result is frequently litigation with the courts determining ownership. Unfortunately, the legal issues are quite complex.

For Hire: If an employee is engaged to invent a new product, it is called an “invention for hire.” This is the property of the employer when it was conceived using the employer’s equipment and property and on the employer’s time.

Incidental Invention: The more difficult circumstance is when an employee comes up with the new idea even though not specifically hired to invent. The law is less clear and sometimes the employer and employee must share the rights.

If you have a question., call Ronald J. Cappuccio, J.D., LL.M.(Tax) at (856) 665-2121