Protecting Ownership of Your Property: The Importance of Employment Agreements

Protecting Ownership of Your Property: The Importance of Employment Agreements

A recent decision from the Federal Circuit Court of Appeals, Stanford University v. Roche, 516 F.3d 1003 (Fed. Cir. 2009), highlights the importance of employment agreements in protecting the ownership of intellectual property. In Roche, the Federal Circuit faced the issue of whether Stanford University owned certain patents or whether a third party owned the patents of a Stanford researcher who performed some of his research while visiting Roche. In ruling in favor of the third party, Roche, the Federal Circuit examined the conflicting agreements, one that the inventor executed with Stanford (the “Stanford Agreement”) and another that inventor executed with a predecessor of Roche (the “Roche Agreement”).

One of the central issues in the case turned on whether Stanford or Roche owned the invention created by the inventor who was visiting Roche while serving as a researcher at Stanford. The Stanford Agreement used the language of “agree to assign” while the Roche Agreement used the language of “agree to assign and do hereby assign.” The Federal Circuit construed the language in the Stanford Agreement as a mere promise to assign in the future, which required Stanford to obtain a subsequent assignment by the inventor, which was not done. In contrast, the Federal Circuit found in favor of Roche because its language included an immediate assignment (“do hereby assign”) of the future rights with no further action being necessary.

Obviously, the difference in the language is only a matter of a few words, but in this case–as in many others–the ownership turned on the use of just a few words. The lesson learned from this case is that companies should review their employment agreements and make sure they are adequately protected and that the assignments of inventions, designs and creations, as well as other intellectual property, are adequately protected. Otherwise, it may turn out that someone else owns what you thought was your intellectual property.

Stan Gibson, an experienced technology and IP trial lawyer, represents inventors, manufacturers, owners and others in litigation centering on complicated technology. Contact him at SGibson@JMBM.com or 310.201.3548.

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