When Does Your Employer Own Your Invention?

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In general, the person who creates an invention owns it, and the mere fact that someone is employed at the time they create an invention doesn’t have an impact.

With that said, if the employer hired the employee to design a specific invention or solve a specific problem, the employee has a duty to assign the resulting patent. Where the employee is not hired specifically to design or invent, but nevertheless conceives of a device during working hours with the use of the employer’s materials and equipment, the employer is granted an irrevocable but non-exclusive right to use the invention under the “shop right rule.” A shop right is an employer’s royalty or fee, a non-exclusive and non-transferable license to use an employee’s patented invention.

Because these common law rules are a bit vague, most employers include a provision in an employment agreement allocating invention rights. In general, these provisions are enforceable, so long as they are reasonable in scope. However, there are several states that have enacted statutes limiting the application of these provisions. These states prevent an employer from assuming ownership of inventions that are created by employees completely outside the scope of employment.

Even in states without statutory limitations on an employer’s right to contractually require invention assignment, the extent to which a contract provision would likely be enforced to deprive an inventor of rights in an invention would depend on several factors, including the extent to which the product relates to the core business of the employer, the scope of work the employee was hired to do, whether any confidential information of the employer was relied upon to make the product, whether it will be sold in the same channels or to the same customers (in other words, how competitive it is to the employer), and whether significant resources of the employer were involved in the creation of the product.

Ultimately, the biggest determinant of whether or not an employer would ever pursue a claim to the patent depends on how successful the invention ultimately turns out to be or how much it could serve as a detriment to the company from a competition standpoint. If it is unlikely that the invention would be perceived as a threat, it is unlikely it would ever be an issue. Regardless, if it is an overwhelming success, an employee will have the resources to protect itself in any lawsuit.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan

When Does Your Employer Own Your Invention?

In general, the person who creates an invention owns it, and the mere fact that someone is employed at the time they create an invention doesn’t have an impact.

With that said, if the employer hired the employee to design a specific invention or solve a specific problem, the employee has a duty to assign the resulting patent. Where the employee is not hired specifically to design or invent, but nevertheless conceives of a device during working hours with the use of the employer’s materials and equipment, the employer is granted an irrevocable but non-exclusive right to use the invention under the “shop right rule.” A shop right is an employer’s royalty or fee, a non-exclusive and non-transferable license to use an employee’s patented invention.

Because these common law rules are a bit vague, most employers include a provision in an employment agreement allocating invention rights. In general, these provisions are enforceable, so long as they are reasonable in scope. However, there are several states that have enacted statutes limiting the application of these provisions. These states prevent an employer from assuming ownership of inventions that are created by employees completely outside the scope of employment.

Even in states without statutory limitations on an employer’s right to contractually require invention assignment, the extent to which a contract provision would likely be enforced to deprive an inventor of rights in an invention would depend on several factors, including the extent to which the product relates to the core business of the employer, the scope of work the employee was hired to do, whether any confidential information of the employer was relied upon to make the product, whether it will be sold in the same channels or to the same customers (in other words, how competitive it is to the employer), and whether significant resources of the employer were involved in the creation of the product.

Ultimately, the biggest determinant of whether or not an employer would ever pursue a claim to the patent depends on how successful the invention ultimately turns out to be or how much it could serve as a detriment to the company from a competition standpoint. If it is unlikely that the invention would be perceived as a threat, it is unlikely it would ever be an issue. Regardless, if it is an overwhelming success, an employee will have the resources to protect itself in any lawsuit.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan

Source: Smartup Legal

Co-Founder Divorce: Why It’s a Good Idea to Create a Prenup for Your Young Company

Founder disputes are one of the most common risks to a young company, but it doesn’t have to be that way. Whether it is a disagreement over a core issue or the waning interest some experience along the startup road, most companies face turnover in their early days, with key players rotating in and out.

While we know, considering the examples of Facebook and Snapchat, that companies can still go on to greatness despite an early founder breakup, that doesn’t detract from the problems that arise when founders leave while holding onto an equity stake.

Under these circumstances, ex-founders can create problems in one of two ways – either they can insist on maintaining influence in a company when they are no longer wanted or they can surface years down the road and claim a right to a company’s success that they had no part in creating. Either scenario is obviously problematic. But there are a few things companies can do to protect against the type of consequences that can arise due to a founder split:

  1. Don’t Rely On A Handshake: Step one may seem obvious, but it is surprising how often founders ignore the paperwork and barrel down the road in their haste to create the next big thing. The cost of engaging a lawyer to prepare an Operating Agreement for your LLC (or Shareholder Agreement for your corporation) is easily justified considering that you will have a mechanism in place to address issues like key voting decisions, how new members are admitted, or how distributions are divided. Even the task of sitting down with your team members and talking through some of these issues can be critically revealing and bring conflicts to the surface that are better to get out of the way sooner than later.
  2. Company Buy-Back: Especially for early-stage companies, consider a provision in your governing document that allows the company to buy out a member/shareholder upon majority or super-majority vote. This way, if one of the early members is not working out, there is an agreed upon mechanism to facilitate the breakup, with important issues such as the purchase price owed to the exiting member established by a pre-existing formula.
  3. Vesting And Reverse Vesting: Another protection for co-founders is to agree to a vesting schedule pursuant to which founder equity will be granted over time or upon the completion of certain milestones. For example, a founder is granted 16,000 units but she only receives them on quarterly intervals over 4 years, meaning she gets 1,000 shares a quarter. In that way, founders will not fully “own” their equity stake until they stay involved with the company over a certain period of time. A similar concept is known as “reverse vesting,” where a founder is granted his or her total equity allotment upfront, but the company is entitled to repurchase shares if the founder leaves.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan

Source: Smartup Legal

Can I Get Trademark Protection For A Board Game?

Most savvy entrepreneurs know to apply for trademarks on their product names, company names, logos and slogans. Of those, inventors who make board games often go straight to patent filings and forget about the trademark analysis, as explored in my article here: This article considers a sub-category of trademark law that allows for some interesting board game protection: it’s sometimes known as Trade Dress protection.

Trade Dress protection serves to protect products that, on their face, remind consumers of the entity that provides those products. Take, for instance, a Coca-Cola bottle. Even if the trademarks Coca-Cola name didn’t appear on the bottle, the appearance of the bottle itself instantly reminds consumers of the brand the bottle belongs to. -OR- How about this car

Bottle of soda isolated on white background. Clipping Path                               lamborghini-593105_1280

You don’t need an emblem or a name tag to recognize this design as the legendary Lamborghini.

Trademark law is meant to protect a company’s branding. Of times, the product design goes hand-in-hand with the company’s brand. In those instances, where the product design can be shown to remind consumers of the origin of the product itself – Trade Dress protection can be granted.

So, what does it mean for your board game? It means that, even if you can’t get a patent on your board game, getting a trademark on the board design can still be an option. And, unlike patents that expire within certain periods of time (20 years of utility patents and 14 years for design patents), a trademark lasts for as long as the company uses the mark (which, in this case, is the design itself).

Here is a good example of a board game that has been granted Trade Dress protection.

In some cases, you can even file trade dress on particular “Hexagons” of your board:

IN JAIL JUST VISITING

FREE PARKING

GO TO JAIL

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

Are Templates And Forms Protected Under Copyright Law?

Here is a common question I get from clients: I invented a new type of diagram design related to social sciences. How can I legally prevent anyone else from teaching and displaying my diagram? Let’s say I was the first to invent the Venn diagram. Can I obtain a copyright or a patent prevent anyone from using or displaying it?

You are right to gather that the law surrounding copyrights of diagrams is difficult to generalize. Typically, a “template” or “fill-in-the-blank” diagram is not copyrightable. So a “Venn Diagram” man not be protected by copyright law, since it can be regarded to as a ‘template’.

When a completed diagram (e.g., on that is ‘filled-in’) is copied, as a whole, without much ‘transformation’, it may be considered a copyright infringement. The extent of transformation required relative to the original work is typically assessed on a case-by-case basis.

In general, blank-forms or templates are not considered a work of authorship sufficient for copyright protection. This is because such templates/forms reflect general IDEAS. Ideas are not copyrightable. Rather the Expression of the Idea is copyrightable. Your words/illustrations/creations used to bring an Idea to life are considered the copyrightable expression. This is why, in general, blank forms are not protectable under copyright law whereas completed-filled-in forms would be protectable.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

Can I Infringe on a Patent Application That Is Currently Pending?

Clients often present to me some ‘patents’ they found through Google and ask me if they infringe the subject matter of the patent. This is a very loaded question and difficult to answer. But before even getting to the answer, it’s important to understand what the “patent” document cited by the client actually is.

First, it is important to distinguish a granted patent from a patent application publication. A granted patent entitles the patent owner 20 years of rights to exclude others from making, using, and selling the patent invention (as listed in the patent claims portion of the publication). A patent application publication (which is what you listed) only discloses to the public that the patent applicant has applied for a patent. It does not mean that a patent has been granted.

Both patent applications and granted patents are published. This means that a single patent filing will publish twice if it passes examination: first prior to commencement of the patent examination and again after examination has determined that the patent application is to be a granted patent. The first publication is mean to put the public on notice of a patent-pending examination, while the second publication is meant to put the public on notice of an actual granted patent.

Almost every non-provisional patent application that is filed to the USPTO gets published 18 months after its earliest filing date (whether the filing date of a related provisional or the filing date of the non-provisional patent filing itself). Sometimes, and for strategic reasons, the patent application may request that the patent application remain unpublished unless a patent is granted (in which case publication occurs post patent-grant).

Until a patent is granted, it is hard to determine what activity would constitute an infringement – simply because we do not know 1) whether the patent application will be issued as a patent by the patent examiner; and 2) what scope of patent protection will ultimately be granted to the patent application. This is an important distinction as the subject matter a patent applicant hopes to obtain patent (and as applied for in the published patent application) usually differs from the subject matter that is actually granted patent (due to patent examination requirements).

So, if you are trying to determine if you would be potentially infringing a patent application – It is important you monitor this application, and any other related application, to see what might issue to patent. Until then, you may act at your own discretion, knowing that there is a risk of patent infringement if the patent is to be granted. Until a patent is granted, infringement cannot occur.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

If I Withdrew My Patent Litigation Claim, Can I Re-File It Later on?

In general, there is no statute of limitations on a claim for patent infringement. However, the Patent Act specifies a time limit on monetary relief for patent infringement claims – damages are available only for infringement that occurs within the six years prior to the filing of the complaint. In general, a voluntary dismissal (unless it’s the second such dismissal associated with that particular claim) just serves to wipe the slate clean – it is as if the suit was never filed. In that sense, it does not serve to toll any limitation period.

In the event the suit has been dismissed twice, the claim is most likely barred by res judicata as the second voluntary dismissal of an action operates as a dismissal with prejudice.

One other issue to point out on the topic of time limitations associated with patent infringement claims, while there is no formal statute of limitations, a defendant can still assert the affirmative defense of laches to prevent a patent holder from pursuing a claim, asserting that the delay in bringing suit is unreasonable, and the defendant will suffer material prejudice due to the delay. There is no formal time for the application of laches – it just depends on the situation.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan

Source: Smartup Legal

Can I Break a Provisional Patent into Multiple Filings?

One provisional may serve the basis to as many non-provisionals as you would like. As long as you file at least one non-provisional within 12 months of the provisional, you can continue to file additional non-provisional claiming priority back to the same provisional SO LONG AS you do not add ‘new subject matter’ that was not covered/anticipated by the provisional.

This means that you can split the provisional into two or more non-provisional utility patent filings claiming priority back to the same provisional, so long as you don’t add anything new to any application. If you have additional subject matter you would like to include, the additional subject matter should be filed in a separate filing known as a Continuation-in-Part (CIP). For CIPs, the new subject matter gets a patent priority date even with the CIP’s filing date, while the originally presented subject matter keeps its original patent priority date.

Exception: if you come up with NEW ideas that aren’t covered by the provisional, but it’s still too soon to file the non-provisional (your product isn’t at its final stage), it would be advisable to file a second provisional. Then, a non-provisional utility patent can claim patent priority back to multiple provisional applications. In this way, you get the earliest possible priority date for each of your inventions.

Consider this article for further reading.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

When Should I Convert My Provisional Patent Application to a Non-Provisional Utility Patent?

I usually get asked the question: If I rush to convert my provisional to a non-provisional patent filing, does that reduce the risk of someone having a third party receiving a patent on the same subject matter?

Typically, there is NO rush in filing the non-provisional utility patent application once you’ve already secured a provisional patent application. Whether you file the non-provisional patent application the next day or 11 months and 20 days from the priority date established by the provisional, your patent priority rights will be the same.

In fact, the long your wait, the longer your effective patent coverage may actually be. Consider that a utility patent grants the inventory rights to exclude others from making, using, and selling the patent invention for a period of 20 years after the non-provisional patent filing date. So, if you have a priority date 1 year prior to the non-provisional filing date, that creates an effective patent priority of 21 years.

But there’s a catch to waiting – Warning: The longer you wait to convert your provisional patent application to a non-provisional, the greater the potential of someone obtaining a patent on the same subject matter as you – even if you have an early patent priority date established by your provisional patent filing.

Here is why: consider that a provisional patent application is never disclosed to the public. It’s kept confidential by the USPTO, and not even patent examiners assess provisional patent applications when they examine non-provisional utility patent applications.

This means that, while you are ‘patent pending’ with a patent priority date secured by a provisional patent filing, another applicant may apply for a non-provisional patent. In some instances, the patent examiner may begin examining their patent application while your provisional patent is still pending under confidentiality. This means that your provisional patent application may not be used as prior art against the subsequent patent filer. In turn, the subsequent patent filer may be granted a patent, even though you had an earlier filed provisional!

Correcting this is an up-hill battle and the subject of a different article.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

I Received a Provisional Patent Filing Receipt in the Mail – What Does It Mean?

A provisional patent application filing receipt indicates that the USPTO has granted you a patent priority date. The patent priority date is the same day as your patent filing date in the case of a provisional patent application filing. From this date forward, you have 12 months to file a non-provisional patent application claiming priority to the provisional. If you miss this deadline, your provisional patent priority date will expire and not be recoverable!

Three important things to note, however.

First – make sure that the filing receipt isn’t accompanied by any other notice. For instance, the filing receipt may accompany a notice to file missing application parts or a notice to file corrected application papers. These notices indicate that your application was filed with defects which, if not corrected within a specified date, will cause your application to be rejected and the patent priority date lost. In some instances, if you’ve already missed the deadline – an extension filing is possible. It is advised that you immediately consult a Patent Attorney if you received such notice.

Second – This document does not mean your patent application was deemed patentable. In fact, in the case of a provisional patent filing, the United States Patent and Trademark Office (USPTO) does not examine the patent application on its merits (e.g., it doesn’t consider the subject matter of your patent app). Rather, it merely makes sure that all of the administrative formalities have been properly accounted for and, with such accounting, holds your patent priority date for twelve months.

Third – A Foreign Filing License (or a Foreign Patent Filing License) is granted. With each patent filing, the USPTO makes sure that the subject matter of the patent filing is not under export control. Typically, inventions that may be modified for use as a weapon, as well as several other inventions under export control, are tagged for confidentiality and prohibited from disclosure outside of the US. (See International Traffic in Arms Regulations (ITAR) and EAR). This happens in a very small fraction of all patent filings. As such, the USPTO requires that all inventions conceived in the US are first filed with the USPTO before the inventor can file outside of the US. Once cleared, a foreign filing license (FFL) is issued to the inventor/applicant.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal