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The first step in determining
ownership of a patent is to identify
the inventor (or inventors). In the
UK, an inventor is a person who has
contributed to devising the “inventive
concept” - the innovative technology
the patent seeks to protect. An
inventor will be somebody who
conceives or implements the concept,
or provides solutions to problems
discovered while implementing the
concept. Somebody who has merely
followed instructions to perform
routine tasks, without showing any
initiative or solving any problems along
the way, will not usually be considered
an inventor. Neither will somebody
who has merely managed or financed
the project while making no technical
contribution.
All of the inventors have a right to be
named on the patent application. It is
especially important to name all of the
inventors correctly for the US, where
providing false information about
the identity of inventors can lead to a
patent being invalidated.
Inventors are the default owners of
their invention (and entitled to the
patent rights), unless there is an
alternative agreement in place. This
means that any external consultants
or subcontractors you engage to work
on an invention will own the rights to
that invention; their rights will not be
automatically transferred to you even
though you might have paid them for
their work. So, when engaging external
consultants or subcontractors, it is
important for your contract with them
to assign their rights to you.
In the UK, inventions made by
employees are automatically
transferred to their employer as
long as the employee has been
employed to invent (for example, as
a researcher) or the employee is in a
senior position (such as a director or
senior manager). In all other cases, the
invention belongs to the employee. So,
inventions made by a junior employee
in the sales department, for example,
would belong to that junior employee,
not their employer.
It is important to check whether an
inventor is actually an employee (for
example, a PhD student is not usually
an employee). It is also important to
confirm whether the company the
employee is actually employed by
is the intended owner of the patent
rights. For example, an employee in a
group of companies may sometimes
be employed by a subsidiary company,
whereas the patent rights are to
belong to a holding company, in which
case an assignment would be needed
from the subsidiary to the holding
company.
Where there is even the slightest
doubt over whether the rights to an
invention have been automatically
transferred to the desired owner, the
inventor(s) should be asked to sign
formal transfer agreements.
Special attention is required where
inventions result from collaborations
between two or more parties, where
careful consideration must be given
not only to the transfer of rights
from the inventors but also to the
ownership arrangement between the
parties.
By default, ownership will be shared
equally between the parties. Each
party will be able to make the
invention, but the agreement of
all parties will be required to issue
licences. This default arrangement
might favour some parties over others.
For example, the default arrangement
favours a manufacturer who is in a
position to make and sell the invention,
while another party hoping to rely on
licence income could be prevented
from doing so by the manufacturer
refusing to agree to the licensing deal.
It is important to seek advice on the
best way to structure collaborations
as early as possible for the good of all
parties involved.
The best advice is to take proactive
steps to secure ownership of your
patent rights as early as possible.
Over time, the risk that inventors
or employees will move, die or fall
out increases, making it difficult or
impossible to have transfer documents
signed, leaving unanswered questions
about ownership which represent a
risk to your business. A disgruntled
inventor leaving a business with
valuable patent rights in their name
can hold that business to ransom.
Such risks can cause problems when
seeking investment for your business
or when trying to sell your business,
resulting in deals falling through
or offers being reduced. Dealing
with ownership early on is always
cheaper and easier than resolving
disputes over ownership which arise
once the value of a patent has been
demonstrated, when the commercial
stakes are highest.
Is this your
patent, sir?
Patent rights can have huge commercial value.
They offer the patent owner up to 20 years in
which to monopolise an area of technology,
giving the owner the legal power to exclude
competitors. Given the value of patent rights,
it is important to take steps to ensure that you
actually own them and that no third party can
lay claim to them.
To find out more
contact Chris Froud
Patents
