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Typically, ownership of an idea or invention is determined by whom and in what context the creation took place. An individual who invents something entirely on his own, for example, retains complete ownership. An individual hired by a company for the purpose of creating new products or ideas, on the other hand, relinquishes those rights to his employer as one of the conditions of his employment.

Employment Agreements

There are, of course, many gray areas and exceptions to this rule. One of the most common arises from the implementation of an employment agreement. Like any contract, an employment agreement may be written in any manner agreed upon by both the employer and the employee. The employer may claim all ownership rights, the employee may retain them, or there may be some combination of the two. The essential elements, of course, are that it is in writing and signed by both parties.

Disclosure of Inventions

One common element of the employment agreement is a disclosure clause. A disclosure clause, or disclosure provision, requires an employee to notify his employer of all inventions created during the course of employment that:

• Are relevant to the company's business
• Come out of tasks and assignments that are part of one's job responsibilities or
• Were created using any of the company's resources (time, materials, space).

Such a provision gives the employer the right to assess the invention and determine whether or not it will assert any claims of ownership.

In addition to inventions created during the course of employment, some employers may request a list of all inventions created prior to employment. This practice serves to prevent potential disputes over inventions that may or may not have been created during employment, something that can protect both parties in the long run. There may, of course, be some hesitation with regard to ideas that have not yet been pursued and it may be beneficial to discuss such issues with a patent attorney.

Pre-Invention Assignments

In addition to disclosure of previous inventions, many employee agreements will require the employee to relinquish to the employer ownership rights over all inventions created during the course of employment. Because they are assigned at the start of employment and before any inventions are actually made, they are commonly known as pre-invention assignments. This type of agreement gives the employer complete control over the copyright, patent, and licensing of everything created by its employees. It also gives the employer the right to use the invention as it sees fit, with or without input from the employee.

Most often, pre-invention assignments are utilized with employees hired specifically for the purpose of invention and innovation. These individuals are paid (usually very well) for their creativity and provided with all of the resources they could need. Because the employer is assuming the entire burden of risk, it will want to reap the benefits of its investment.

It should be noted, however, that some states have laws limiting the scope of pre-invention assignments. These laws prevent an employer from assuming ownership of inventions created by its employee, but completely outside the scope of employment. A pharmaceutical chemist, for example, who designs model cars in his garage on Saturdays will not forfeit his ownership rights to the company he works for, regardless of whether or not there is an assignment in place.

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