Intellectual Property (ip) 101

"Intellectual Property (IP) 101"

IP includes patents, trademarks, and copyrights. A patent provides an exclusive right to an invention. A trademark provides an exclusive right to an indication of source of a product. A copyright provides an exclusive right to an original work. A service mark provides an exclusive right to a service or origin of a service.

United States copyrights accrue automatically, but a work must be registered with the United States Copyright Office to perfect the federal copyright. Trademark rights can also accrue without a federal registration, but those rights are weaker, and a federal registration is preferred in almost all situations.

United States patents and trademarks are obtained by filing an application in the United States Patent and Trademark Office (USPTO). An examiner in the USPTO examines the application for compliance with all statutory requirements. The USPTO issues complying applications and rejects non-complying applications. Often, a non-complying application can be amended, thereby placing it in condition for allowance. It is helpful to discuss possible amendments with the examiner in charge of the application prior to filing an amendment. Discussions with the examiner on how best to amend an application increase the chance that the amendment will result in allowance.

Trademarks and service marks identify your business to the purchaser of your product or service. Your mark allows a consumer to come back to you if he or she likes what you provide. If you have a trademark right, using your trademark prevents someone else from using a similar mark that is likely to confuse the public into buying goods from them instead of you.

Patents provide a limited monopoly on your company’s product or process. Monopoly translates into high profit margins due to exclusion of competition. Patents can be obtained on any invention that complies with the statutory requirements, which are that the invention is useful, novel, and non-obvious. The prevailing case law allows patents on just about anything, for example, it allows patents on computer implemented methods of calculating useful results, and on computer implemented methods of doing business.

Obtaining United States patents and trademark rights is expensive, primarily due to the amount of high hourly rate attorney time required to prepare an application and guide it through the USPTO. For patents, part of that cost can be deferred by initially filing a relatively simple provisional patent application. The filing date of a provisional application is prima facie (evidence legally sufficient to establish a fact unless subsequently disproved by additional evidence) proof of the date of invention. A provisional patent application protects for one year the right to pursue patent protection on the novel aspects of a product or process at a very low cost. However, provisional applications do not issue into patents. They simply preserve the filing date for an invention for up to one year. Within one year of the filing date of the provisional application, it must be followed by filing a more formal US application and any foreign applications in foreign countries in which protection is sought. If the formal applications are not filed, the benefit of the early filing date of the provisional application is lost.

Who Owns Your Invention?

Who owns your invention? Who owns your employee’s invention? Invention ownership disputes occur all too frequently. However, invention ownership disputes are easily avoidable with the proper foresight and knowledge.

Our legal system presumes that the inventor is the owner of the exclusive rights in his or her invention. How then, does someone other than the inventor obtain the rights to the inventor’s invention? The answer to that question is by an assignment. The assignment can be an express assignment, which is typically a written document evidencing a contract between the inventor and the assignee in which the inventor sells the rights to the invention to the assignee. However, that type of assignment is not what leads to ownership disputes. Ownership disputes occur when there is no express assignment and both the inventor and his or her employer think that they own the invention. This is because the presumption that the inventor owns the invention is incorrect in certain situations, even without an express assignment.

An employer of one who is "hired to invent" owns the rights to the inventor’s inventions. The Supreme Court came to that conclusion in the Standard Parts Co. v. Peck case in 1924. However, that is the extreme case, since the vast majority of employees are not employed to invent. What about an employee employed to design or construct, such as an engineer? An employee employed in a field of endeavor in order to design or construct is not equivalent to an employee employed for the purpose of invention. That was the conclusion reached by the Supreme Court in U.S. v. Dubilier Condenser Corp. in 1933. However, that conclusion leaves open the question of who owns the invention made by the engineer. The outcome in each ownership case depends on the relationship between the employee, the employer, and the circumstances of the invention.

Even if it turns out that the employee owns his or her invention, if the employee used the employer’s materials or equipment during working hours to make the invention, the law grants the employer a nonexclusive license to the invention. That has been the law ever since the Supreme Court Lane & Bodley Co. v. Locke case in 1893.

It should be apparent that the best way to avoid an ownership dispute is to reduce to a written contract between the employee and the employer who owns the rights to any inventions made by the employee, and that agreement should be defined as early as possible in the employee employer relationship.

Substantial information on patents and trademarks is provided at the USPTO’s website at http://www.uspto.gov.

Copyright Richard A. Neifeld, President, Neifeld IP Law, PC

If you have any other questions or need further information please feel free to contact us via email at http://www.neifeld.com.