This Wisdom of the Crowd, compiled from questions and responses posted on the Intellectual Property forum*, addresses Whether An Employee Can Co-Own IP Created For Their Employer.
-- *(Permission was received from the ACC members quoted below prior to publishing their forum Comments in this Wisdom of the Crowd resource.)--
Question:
The legal department at our nonprofit has recently been asked to justify the standard employee assignment of invention agreement which is, to my knowledge, fairly standard across industries, namely that employees assign all ownership of IP developed within the course of their employment, and don't retain any rights to use it for personal or commercial use. I feel extremely comfortable defending this in terms of a for-profit corporate environment, but wondering if anyone at a nonprofit (or anywhere, I suppose) has taken an alternative approach.
One specific question that has been raised has been why we can't allow employees to co-own the IP they create for us, since the entire mission of our nonprofit is to influence human behavior, but we are saying that our own employees' behavior should be completely separate from the work that they do for us.
Obviously co-ownership of IP has a number of legal issues: who would enforce the IP in litigation, who would be able to defend it, needing to get consent from each other for purposes of licensing or other exploitation of it, not to mention simple potential loss of an organizational asset (whether to competitors, the public domain, etc.). A license could accomplish or solve most, if not all of this. Has anyone's organization taken this route, or anything other than out right employer-owned IP for anything created by employees?
And in the event no one has taken an alternative approach, that will still be helpful information, if just to justify that approach internally with a statement like "generally nonprofits do it this exact way, and here's why... and here are some alternative ideas, like changing the messaging to employees and a patent incentive program, etc. that we could offer in order to offset the perceived negative impact of our IP policy."
Thanks in advance for any helpful feedback! -- Wisdom of the Crowd:
Response #1: While I do not have a complete answer, I have seen a few universities who had a buy-back option built in to their IP agreements. Basically, if the university decides not to pursue patent protection or pay the maintenance fees on a patent application, the creator/inventor has the right to pursue individual ownership at their own expense. Sort of a "right of first refusal" for the university. While this would be expensive for the creator, it gives them some option for ownership if the employer does not wish to pursue/maintain protection.
Copyrights are a little different because ownership is automatic at fixation and registration is cheap, and I find it difficult to think of what the employee might create in the scope of their employment that the employer would not want to own.
So, maybe this idea is only practical on the patent side?1
Response #2: This was part of the discussion in Session 808 at the Annual Meeting last week, and my co-presenters may have some insights - Reid Cunningham and Rob Falk. The consensus is that while you can create whatever agreement works, ownership is generally cleaner and easier to manage in the long run. Quick summary of this element of our program: Perpetual licenses back can be one way to answer the concern of the person, and except in certain states, work-for-hire language may be helpful in your employment or consultancy agreements.2
Response #3: I think you can look to universities (non-profits) for guidance. Basically, if you pay them as employees, you should own. If you don't pay them (students or volunteers), it's a different matter depending on how sensitive you are with use of your organization's resources.
One of the reasons you want to own (instead of the employee) is basic conflict of interest. If your employees are trying to commercialize IP you paid them to create (which is the only reason they would need direct ownership rights), that creates incentives and issues where the current and future interests of the employer and individual (as well as potential co-workers, co-inventors, collaborators, and sponsors) might not be aligned. It can also create situations where there might be liability (for example, if your organization signs a non-disclosure agreement (NDA) with a sponsor/collaborator and your employee is commercializing something remarkably similar in his or her private capacity). If your organization chooses to have an individual commercialize certain IP, have an arms-length agreement where you can identify the rights and responsibilities associated with such IP to avoid problems down the road.
If the employees are pitching this issue as being related to publications, it's not uncommon amongst universities to have a separate carve out policy for handling of publications (i.e., who reviews, who signed copyright transfers, what rights are retained by the employer/sponsor, etc.)
With regards to messaging, I believe most institutions have a patent award system where there is nominal financial award for a patent filing and/or issuance (since there can be some extra work associated with prosecuting a patent). Most nonprofits (particularly if federally funded) also have a royalty sharing policy in which if the patent is commercialized a certain percentage of license fee/royalty is shared with all of the inventors (while leaving the burden/costs of patenting/commercialization to the institution). The AUTM (Association of University Technology Managers) organization has some resources that may be helpful.3
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1Anonymous (October 26, 2016).
2Margo Hablutzel, Legal Advisor, Computer Sciences Corporation, (October 26, 2016).
3Anonymous (October 26, 2016).
Region:
United States
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