Our series on how intellectual property can protect additive-manufacturing products and processes continues.

Patent Ownership Issues

The hypothetical case study set forth assumes that the manufacturer does not contribute to the development of the fork design and that the motorcycle racing team does not contribute to the development of the improvement of the process or the alloy. However, if the parties were to contribute, then IP ownership issues could arise.

Patent rights vest with the inventor. See Bd. of Trs. of the Leland Stanford Jr. Univ. v. Roche Molecular Sys. Inc., 131 S. Ct. 2188 (2011)(slip op. at 7)(citations omitted). An inventor is a natural person that contributes to the conception of one or more of the patent claims in the issued patent. See 35 U.S.C. § 116(a). Thus, it is possible that one or more employees of the manufacturer might have to be named as an inventor on the patent (or patents) that are directed to the fork design in this modified hypothetical. Similarly, one or more employees of the motorcycle racing team might have to be named as an inventor on the patent (or patents) directed to the process or to the alloy.

The manufacturer’s employees and the motorcycle racing team’s employees may have an obligation to assign their patent rights to their respective employers. Employers can obtain an employee’s patent rights by state contract law, such as by requiring employees to sign pre-invention assignment agreements as part of their employment agreements. Some states, like Pennsylvania, enforce express contracts to transfer patent rights when the contracts are clear and unambiguous. White Heat Products Co. v. Thomas, 266 Pa. 551, 555, 109 A. 685 (1920); Mosser Industries, Inc. v. Hagar, 200 USPQ 608 (C.P. Lehigh 1978). In absence of such a contract, the general rule is that the person who invents an invention owns it and has the right to exclude others from making, using, importing, offering for sale or selling it.

One exception to the general rule is for inventions by employees who are hired to invent. If an employee is hired to create a specific invention, the employer will be deemed the owner of the invention. Quaker State Oil Refining Co. v. Talbot, 315 Pa. 517, 174 A. 99 (1936).

Another exception to the general rule is that an employer may have a shop right to an employee’s invention, in which the employee retains ownership of the resulting patent, but the employer retains a royalty-free license to make, use and sell items embodying the employee’s invention. United States v. Dubilier, 289 U.S. 178, 53 S. Ct. 554, 77 L. Ed. 1114 (1933); Gill v. United States, 160 U.S. 426, 16 S. Ct. 322, 40 L. Ed. 480 (1896); Solomons v. United States, 137 U.S. 342, 11 S. Ct. 88, 34 L. Ed. 667 (1890). A shop right may exist where an employee has used the employer’s time, facilities, materials or equipment in creating a patented invention.

In view of the above, both parties could end up with an undivided interest in one or more of the described patents. See 35 U.S.C. § 262. This may be undesirable because either party could license the patents to potential competitors without the consent of the other party. In order to avoid this undesirable situation, the parties may want to enter into an agreement regarding the distribution of patent rights before they begin to collaborate with one another.

We will conclude our discussion next time.