This is the first in a two-part blog series on owning and transferring the rights to a patent.
People commonly confuse patent inventorship with ownership — or assume that they are the same thing. But they are distinct concepts: The owner of a patent enjoys all of the rights and benefits granted by the patent. The inventor is not always the owner of the patent, and so doesn’t always enjoy those rights.
If your business is about to file a patent application (or if you’ve filed them in the past), it’s important to properly understand how these concepts differ to avoid legal disputes down the line and to protect the value of your intellectual property assets.
What is patent inventorship?
The person(s) who should be listed as an inventor on a patent application is determined according to the legal standard for inventorship. Different jurisdictions define inventorship differently; in this section, we’ll analyze how it’s defined under U.S. law.
An inventor must have contributed to the conception of the invention
Under U.S. law, the inventor is a person who has contributed to conception of the subject matter as described in at least one claim in the patent application.
Conception is normally defined as “the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is thereafter to be applied in practice.”
In simpler terms, a person has “conceived” an invention when their idea is clear enough to enable someone skilled in the field to implement the invention in a practical form (the legal term for this is “reduction to practice”).
Importantly, inventorship is based solely on the claims in a patent — not the entire disclosure. So a person qualifies as an inventor only if they helped conceive something that’s described in at least one of the patent’s claims.
An inventor need NOT have reduced the idea to practice
However, the inventor is not necessarily the person who has reduced the invention to practice. So if a person implements (builds, codes, or carries out) an invention under the direction of someone else who conceived the entire novel idea, the implementer is not an inventor — unless they made an additional, inventive contribution during the implementation process.
As an example, let’s say you’ve invented a new component for a mechanical system. The machinist who manufactures the component according to your specification is not an inventor.
But if the machinist adds a feature (or makes some other substantive change) that you didn’t conceive in your design — and that added feature is claimed in the patent application — then the machinist should be listed as an inventor on the patent application.
As another example, let’s say you’ve invented a new machine-learning algorithm. A developer who codes the algorithm according to your specification, using standard coding tools, is not an inventor.
But if the developer adds functionality that you didn’t conceive in your original algorithm — and that functionality is claimed in the patent application — then the developer should be listed as an inventor on the patent application.
Can we list multiple inventors?
As long as a person has contributed to at least one claim in the patent application, they are considered an inventor, and should be listed as such on the patent application.
Inventors are not required to have:
- Made an equal contribution
- Contributed to every claim
- Physically worked together at any time
Irrelevant factors in determining inventorship
As we mentioned earlier, inventorship for a U.S. patent or patent application is determined by only what is stated in U.S. law. The following factors are not part of the legal standards, but are commonly (and incorrectly) perceived to determine inventorship:
- Internal company politics: Many times, a junior employee writing an invention disclosure for a patent application will feel compelled to list their supervisor as an inventor. But they shouldn’t! Unless the supervisor actually qualifies as an inventor according to the legal standards we discussed above.
- Authorship: Every field has its own standards for who should be listed as an author on a scholarly publication or white paper. For example, in most science labs, the principal investigator is almost always listed as the last author. However, inventorship is determined using a different set of standards — so don’t confuse the two.
- Company: A company can never be listed as an inventor; only its employees can be. But a company can be the owner of a patent... which leads us to the concept of ownership.
What is patent ownership?
According to the rules and practice of the U.S. Patent and Trademark Office (USPTO), the patent owner is the entity who has authority to file patent applications and take action in a pending application.
In the vast majority of patent applications, the inventors are employees of a company that owns the patent rights (by virtue of an employment agreement with the company). In that scenario, the company is the “applicant” who has the authority to file and prosecute patent applications, and the inventor does not have any standing with the patent office.
Once the patent issues, the owner of a patent enjoys significant commercial benefits, as they have the right to exclude others from making, using, selling, offering for sale, or importing the claimed invention.
By default, the USPTO presumes the original applicant is the owner of an application and any resulting patent — but the original applicant may transfer ownership of the patent to a different entity. We’ll take a deeper dive into that process in the next post in this series.
What if my employee is the inventor — will my company own the patent?
Your business can claim ownership of an invention only if your employee has assigned ownership to the business. If the employee doesn’t do this (and continues to retain ownership), you won’t be able to enforce the patent rights against them or against your competitors. For example, if employee-inventors don’t assign their rights to the company:
- The inventors can profit off of the invention, even if they no longer work for you
- The inventors can license the patent rights to a third party (e.g., your competitor) without sharing the royalties with you
- The inventors could form a competing company and sell a competing product
For this reason, if your employees are creating valuable IP for your business, you should have them sign employment agreements that will assign ownership of the IP to your business.
Want to know more about how to assign ownership? Keep an eye out for our next post in the series, where we’ll walk you through the process.
Keeping track of inventors using IDRs
Avoid costly legal disputes by keeping track of all inventors who have contributed to creating an invention, and make sure they all execute a written assignment to document your business’s ownership of the patent rights.
Use our FREE invention disclosure record (IDR) template to easily record all information related to your invention — download it now!