Ownership of Inventions
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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