Tuesday, September 24, 2013

Who Owns Lighting Invention?

Dear Rich: I am an engineer employed by a large corporation that owns multiple businesses and often buys new businesses and sells them off depending on market conditions, etc. Over the past couple of years, I had been designing and experimenting with electrical circuits related to commercial lighting. Until recently my employer was not in this business but then recently purchased a lighting company. I was working on this stuff before my employer purchased the lighting company, and also, I do not work on lighting designs for my employer—the lighting business is in another state. I also have no contact with the lighting business whatsoever because I design electronics for the a different industry. When they hired me, I was asked to sign a bunch of documents, basically signing off all my patent and copyrights. One of the documents went as far as to say that I was not allowed to consult on my free time. A few years ago I asked our HR department for a copy of the documents I signed. The only thing they came up with was a statement saying that if I used my employer’s equipment to design something, they would claim the IP. They then asked me to resign a similar document. I never did this and they never pressed the issue. As a very general rule, if you developed the innovation (1) on your own time, (2) using your own tools, and (3) at the time of innovation, your employer wasn't engaged in the industry of the innovation (or likely to be), you will probably retain rights (4) in the absence of agreements to the contrary. Employee ownership of inventions is governed by state laws, most of which are influenced in varying degrees by whether you signed any documents agreeing to transfer ownership of inventions (known as pre-invention assignments), whether you used employer information, time, or tools in developing your innovation, whether you were hired to invent and whether the invention is related to the employer’s business or actual or “demonstrably anticipated” research or development.
Things to consider ... The fact that the HR department can't furnish you with agreements doesn't mean they don't exist. It's possible, for example, that general counsel or outside counsel have retained copies. If there is a legal dispute, chances are good that -- if the documents exist -- they'll be "found." Your written agreement trumps any other arrangement you may have with your employer. However, if the agreement goes too far -- for example, claims rights to all future innovations even when you're not working for the employer -- you may be able to challenge it (unfortunately, you'll have to do that in court). At the same time, you may complicate your situation if your innovation has some application within the employer's (non-lighting) industry, even if it's not a direct application. If there is any evidence that employer tools were involved in your innovation -- even in the absence of written agreement -- the employer might obtain an implied license known as a shop right. BTW, some states -- Delaware, North Carolina, Utah, California, Illinois, Kansas, Minnesota and Washington -- require that the employer furnish a copy of the law on pre-invention assignments to new employees.
The real world ... Your biggest concern may be if a company wants to license your innovation. That company will not want to enter into a license agreement if they believe there is a dispute as to your ownership, or alternatively, if they believe you may have used employer trade secrets in your innovation. You will most likely be asked to include an indemnity provision.
What's an inventor to do? We're sorry to have to tell you this ... but if you're interested in patenting, commercializing or licensing your innovations you will need the advice of an attorney. Unfortunately, there are too many unknown and wild cards to predict the outcome.

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