Define and Assign Inventor Rights Ahead of Time
In business and in life, there’s really no way to prevent a motivated adversary from trying to do you harm. Plain and simple, if someone wants to create a stir, he or she can do so by leveling claims and accusations, whether warranted or not.
Of course, “trying” to do harm and actually “doing” harm are two entirely different things. Smart business leaders take steps to protect their organizations through preventive measures, such as agreements that govern certain rights and responsibilities among parties. This often precludes situations from ever arising because parties to an agreement or a relationship know the “rules” ahead of time.
Should a situation arise, prudent business leaders also do their due diligence to refute any claims against them through expert research, fact-finding, and qualified legal representation. They know they while they can’t stop frivolous or inflammatory actions by others, they can beat those claims if the facts and the law are on their side.
When the Unthinkable Happens
In an earlier blog, How You Can Avoid the Nightmare of a Rogue Employee Stealing Your IP and Trade Secrets, we explored how one rogue employee quit and proceeded to cause major headaches for the former employer. In this case, written agreements were in place to document the nature of the company and the employee’s relationship, including a clear delineation of intellectual property and inventor rights and how they were assigned to the company. However, that didn’t stop said employee from stealing the company’s intellectual property and trade secrets upon exit while also blocking access to the company’s business and inventory systems, including company email.
“In the past couple of months, there have been significant developments in this ongoing situation,” explains Eric Ludwig, whose California-based law firm, Ludwig APC, represents the company in this matter. “The former employee retaliated by filing an application for a temporary restraining order (TRO) and preliminary injunction against the company from transferring any rights under any patents in question. From the outset, it was obvious to us, our client, and ultimately the judge, that the plaintiff had no standing in the matter, but that didn’t stop this disgruntled employee from making life difficult for our client, which was probably the chief motivation for this action all along.”
The TRO proved meritless, but that didn’t mean the company didn’t have to expend a lot of time, energy, and resources countering the claim.
“Temporary restraining orders are quite common in the intellectual property space, especially around inventors seeking to exert their rights as patent owners/inventors even though they have assigned those rights to their employers, or in this case former employer,” says Ludwig. “With our client, proper agreements were in place, so it was more of a scenario where someone had a desire to cause harm. Our approach was to put the complainant through the paces by presenting clear, irrefutable facts, which the judge agreed with.”
Whose Patent is It?
While companies cannot register as patent owners or inventors, they can be assigned patent rights to an invention. This is done when employees and independent contractors sign pre-invention assignment agreements with their employers. Essentially, these agreements set the stage for employees/independent contractors to transfer their invention rights—anything they conceive or develop—to their companies as a condition of their employment. To avoid gray areas, such as what happens when inventions are conceived after employees/independent contractors are no longer employed by a company, it’s critical that assignment agreements be as clear cut and specific as possible so that all parties protect their rights.
“In seeking a TRO, our rogue employee was attempting to backtrack and exert ownership rights that didn’t exist over a particular invention,” explains Ludwig. “Fortunately, the agreement in place was quite clear about what was covered and the time frame involved. As a result, we were able to expedite the proceedings and achieve a clear-cut, favorable ruling.”
Get it In Writing
The need for pre-invention assignment agreements to be properly written and in place with employees and independent contractors is critical so companies can gain assignment rights for their research and development efforts and the inventions they fund.
“As with most legal instruments, the devil is in the details,” says Ludwig. “Intellectual property law is complex and constantly changing. Litigation around IP issues is usually very time consuming and painstaking. It’s not something companies can take on themselves and find success. We strongly recommend companies retain law firms well-versed in business litigation and IP matters, like Ludwig APC, to help them properly prepare for and manage their high-risk, high-reward IP issues. Working with a firm like Ludwig APC can save companies major legal costs and avert undue stress.”
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