Who owns the invention?

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Employees, ex-employees, consultants and ownership... In today's fast-moving and fluid labour market, it can be difficult to pin down when and how an invention is made. This is of crucial importance though. It is likely to make the difference between ownership by the employer or the individual inventors. If the employer owns the invention, it can file patents and stop inventing employees from using the technology if they set up on their own later on.

A recent case concerning a software innovation (Prosyscor v Netsweeper) shows how to analyse a situation like this and steps to take to protect your position.

Software engineer Bradley Kite was hired by the Netsweeper group in early 2009. During his time there he came up with a system to authenticate website users in a way that was independent of their IP address. This allowed separate treatment of different types of user who shared a single IP address – like teachers and students in a school. Mr Kite worked on the technology at home in his own time. But he also posted his ideas on the employee-confidential Netsweeper intranet, and discussed them with a fellow employee who suggested improvements.

Bradley Kite left Netsweeper in September the following year, although he continued to do work for it for a short time under a consultancy agreement. He continued to work on the user authentication software project and in November 2010 he started work on a patent application and set up his own company, Prosyscor to commercialise it.

Netsweeper developed its own version of the technology and filed patent applications in 2012. Once Bradley Kite became aware of this, Prosyscor sued for ownership of the patent family.

A question of “normal duties”

At the heart of the dispute was a question about what Bradley Kite was hired to do. The relevant legislation (s.39(1)(a) Patents Act 1977) says that employee inventions will automatically belong to their employer if they flow from work by the individual “in the course of the normal duties” or “duties specifically assigned to him”. Did this catch Bradley Kite’s work on the authentication system idea?

The analysis involved looking at Bradley Kite’s employment contract and an ancillary non-disclosure and non-compete agreement, the dates of his work on the project, his discussions internally and intranet posts.

The result? Netsweeper won the day and Bradley Kite walked away empty-handed.

Points to note

  • The contract of employment is the starting point – what was the employee hired to do? Netsweeper’s contract wording was detailed and extensive, including obligations to discuss developments with project managers.
  • Duties can evolve over time.
  • An obligation of confidence owed by employee to employer can help in understand what falls within his or her normal duties.

Take-away messages

The case gives some helpful pointers for employers:

  • Be clear in your employment contracts about the kinds of work someone is hired to do, especially if it may lead to inventions. Consider including areas of work that the employee may move into even if they will not be engaged on them straight away.
  • Include explicit assignment and confidentiality provisions.
  • If the work scope changes over time, record the changes.
  • If an employee is given a specific project to work on, record that fact.
  • Encourage accurate record-keeping, particularly where new ideas are raised and discussed.

And if you are an employee, don’t assume that work done at home in your own time will automatically be yours. It may be, but only if it is completely separate from your day job, and not within the ambit of your job description. You should also steer clear of discussing this kind of project with colleagues and certainly don’t post it on an intranet discussion boards at work.

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