The question if ownership of an invention is sometimes a
difficult one. Often this question becomes contentious many
years after the invention was devised and a patent application
lodged. The contention may arise because of the economic merit
of the invention which is often not apparent at an early stage.
In order to establish the ownership of an invention it is
necessary first of all to establish who the inventor is and then
establish whether or not the inventor, or some other person or
company, is entitled to the invention.
The first step in establishing the identity of the inventor is
the realisation that a company cannot be an inventor. An
invention can only be devised by an individual person or
persons. Thus, the inventor will normally be the person who
conceives the original idea. If that person instructs a second
person, such as an engineering foreman, to come up with a
prototype then the engineering foreman will normally not be
regarded as an inventor. The reason for this is that the foreman
is regarded as 'a machine' which carries out the instructions
given to it. The engineering foreman may come up with a
particularly good design of the apparatus of the invention which
may be easy to fabricate, economic in the use of materials and
the like, but even so the first person is the inventor. However,
if the engineering foreman comes up with an arrangement which
achieves some result or advantage not contemplated by the
original suggestion, then the engineering foreman may be
regarded as one of two joint inventors of the improved
invention.
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Having determined who is/are the inventor(s), the next question
to be determined (where an inventor is not self-employed) is
whether the employer of an inventor is entitled to the
inventor's invention. This question is determined by a body of
common law known as 'Master and Servant', i.e. employer and
employee and the relationship between them. In many cases, it is
quite straightforward and clear that the employee's invention
belongs to his employer. This will particularly be the case
where the employee is employed, for example, as a design
engineer whose job it is to come up with new products for the
employer. It is also clear where there is a specific employment
contract, or other written agreement, between the employer and
the employee which specifies that any invention made by the
employee belongs to the employer.
In the absence of a written agreement, it is sometimes difficult
to determine who owns the invention. For this reason it is
highly desirable that where a consulting engineer, or other
person who is not a full-time employee, is retained then the
ownership of any invention created by such a person should be
settled in writing at the commencement of the employment. In
this way, a bitter argument at a later date as to who owns the
invention can be avoided. The more important the invention, the
more bitter the argument.
However, it is not sufficient, for an employer to claim an
employee's invention merely because it was made in the
employer's time, using the employer's tools and the employer's
materials. Under these conditions it may simply be that the
employer is entitled to some financial reimbursement for his
time, facilities and materials by the employee rather than the
employer being entitled to the invention. This situation may
arise, for example, where the employee is making a 'foreign
order' in the employer's time and, in so doing, produces an
invention. Much will depend upon the technical field of the
employee's invention and the fields of activity, or even
proposed activity, of the employer. A good general rule to be
applied is to ask the question, 'Is the expectation of the
employer than an invention of this nature made by one of his
employees should be the property of the employer?' For example,
an employer manufacturing furniture or upholstery fabrics would
not expect to own an employee's invention relating to a device
for washing cars, but an employer manufacturing domestic
electrical appliances may well expect to own an improved
electric can opener invented by one of his employees.
There are a substantial number of previously decided cases on
questions of this nature and, therefore, such matters should be
referred to a patent attorney if there is any doubt. In this
connection, it is important to bear in mind that if too many
inventors, or not enough inventors, are named then the eventual
patent may be invalid. In the first case someone who has not
contributed to the invention has been named as an inventor. This
sometimes arises because of a desire not to hurt any feelings by
leaving someone out. In the second case someone who has
contributed to the invention has not been named as an inventor.
In addition, where a patent for an invention is applied for in
the name of an inventor, and the inventor's employer is entitled
to the invention, then even through the patent may be granted in
the name of the inventor, the law considers the inventor to be
holding the patent in trust for the employer. This situation
sometimes arises with inventions made by a director of a
company, the director normally being employed by the company,
and the patent is applied for in the name of the director. If
the company should then experience financial difficulty and be
placed in receivership or liquidation, the receiver or
liquidator of the company will almost certain claim that the
patent is the property of the company and, therefore, should be
included amongst the company assets. This claim will often
frustrate the original intention of the director to accumulate
assets in his own name but liabilities in the name of the
company.
An invention, whether the subject of a patent application or
not, is personal property, is able to be owned by an individual
or a company, and is able to be assigned, or sold, to another
person or company. In addition to assigning either an invention
or the right to apply for an Australian patent, it is normal to
also assign the right to apply for corresponding patents in
foreign countries. However, the overseas patent application
right may be assigned to a person or company different from that
applying for a patent in Australia. It is normal practice to
have an employee execute an assignment in favour of his employer
even though the employer owns the invention of the employee.
Such an assignment confirms the situation and places the matter
beyond doubt. Since this assignment carries the employee's
signature, it will settle any dispute arising at a later date
should the employer and employee fall out or disagree. It is
common practice for such assignments to include a term, or
condition, which requires the employee to assist his employer to
obtain patents in Australia and other countries. Such assistance
may involve the signing of forms for various countries and/or
the provision of technical assistance in overcoming Examiners'
objections.
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Our dedicated team can assist you with all matters relating
to ownership and protection of Intellectual Property. Complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223
9166 to
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