Fostering Invention

Anywhere you have good employees doing good work someone will inevitably come up with something brilliant, and unless clearly defined in the employment contract, there can be confusion as to who owns these ideas. Therefore, consulting with a professional patent agency, such as Invent Help, is advisable. Intellectual property clauses are commonly left out of contracts but they deserve careful consideration as illustrated by the following examples.

Example A: Darren from Research and Development is named as an inventor in a patent application filed in the name of the company he works for. The company is eventually granted the right to stop competitors from infringing the claims of the patent. The company owns the invention because it paid Darren to invent it during work time using company resources.

Example B: James from sales comes up with something clever. He visits his patent attorney and eventually files a patent application in which he is named inventor and applicant. James owns the invention because he is not employed to invent things.

Both of these examples seem straightforward and most would not question the ownership of the intellectual property. Alarm bells will begin to sound, however, when one discovers that James’ idea concerns subject matter important to the business of the company, and that James:

a. came up with his invention during work hours;
b. used company resources for the development of his idea; and
c. allowed the company to use his invention during his time there.

One could be forgiven for assuming that the company would be entitled to some rights in the intellectual property developed by James. However, the law in some countries Australia and the United Kingdom is unanimous in that an employee’s invention remains his or her property with two exceptions.

The first exception is where an employment agreement states that any invention made during the course of employment becomes the property of employer. The second is where the employee is employed to invent things and the invention was made during the normal course of employment.

If a dispute regarding ownership of an invention arises in the workplace other employees may be tempted to demonstrate less ingenuity. One way to limit the number of useful inventions that employees keep to themselves is by introducing an incentive scheme. Such a scheme may also provide an opportunity to revisit employment agreements with a view to incorporating intellectual property clauses.

The inclusion of an incentive scheme, for example a royalty or profit sharing arrangement, in examples A and B would result in advantages for the inventors and the company:

• Darren would be rewarded if his invention was successful by receiving a percentage of the royalties and would be encouraged to come up with new inventions.
• James would save on the costs of intellectual property protection, thereby lowering his financial exposure to the risk of the invention being unsuccessful. He would also be able to utilize all of his company’s contacts and resources during development, thus saving himself both time and money.

The company would have to share the benefits of both inventions with the inventors but the exercise encourages cooperation. At the very least, the company would have helped foster an environment where there were clear and real benefits to thinking outside the square. As you can see, the process is complicated and having a patent agency like InventHelp to guide you is recommended.