gavelEvery employer that engages in research and development work should obtain a present assignment of patent rights in future inventions from every employee.  The U.S. Supreme Court underscored this fact in the recent case of Standford v Roche.

Stanford University’s research employee worked on a project to detect HIV infection.  In the employment agreement, the employee “agree[d] to assign” to Stanford all inventions resulting from his employment.

Stanford arranged for the employee to perform work on the HIV project at Cetus, a small research company that had specialized DNA amplification capabilities.  As a condition of having access to the Cetus facilities to perform the Stanford work, the employee signed an agreement with Cetus saying that the employee “does hereby assign” to Cetus his inventions made as a result of his access to the Cetus facilities.

Get the picture?  The Stanford agreement was an agreement to assign in the future.  The Cetus agreement was a present assignment of rights to future inventions.

Stanford applied for and obtained patents on the HIV testing procedure.  Meanwhile, Roche acquired Cetus and commercialized the HIV test in the form of test kits, which are now widely used.  Stanford sued Roche for patent infringement and the lawsuit made it all the way to the Supreme Court, which found in favor of Roche.  The Supreme Court ruling has great importance for employers.

The bottom line:  An employee inventor is free to assign an invention made for an employer to someone else unless the invention is already assigned to the employer, even if the research was funded by the Federal government.  An obligation of the employee to assign inventions to the employer in the future is not good enough to preserve the employer’s rights in the invention.

Why it’s important:  Your employee can assign your invention to anyone, including your competitor, unless you already have an assignment from the employee.

If you are an employer, be sure to obtain a present assignment of future inventions from every employee.  If you are contracting for development of an invention or product, obtain a present assignment of future inventions preferably from both the development partner and each person working on the project.  You’ll be glad you did.

— Robert Yarbrough, Esq.