Inventors, please take note. When you hire a consultant to build a prototype or otherwise help you get your product to market, make sure that your contract specifies who owns any intellectual property that might arise during the consultancy. If you don’t, you may end up sharing patent ownership with your consultant.
Surprising? Yes. But this trap is easy to avoid once you know the risk.
Here is an example for illustration. Let’s say you just came up with a great new idea: the time machine. You’d be rich for sure. Naturally, you are not in the business of time machines, so you hire a consultant to help prototype your invention. After some effort, you and your consultant create a machine that can transport you through time as long as you apply 1.21 gigawatts of power to a flux capacitor going 88 miles an hour. Because the original idea was “your invention,” you can file a patent without naming the consultant as an inventor, right? Probably not. Unless your consultant signed a contract agreeing to assign all patent rights to you, filing a patent without naming your consultant as an inventor will most likely expose you to a lawsuit from the consultant claiming ownership in the patent.
As we previously discussed, inventorship depends on two things: (1) what is ultimately claimed as the invention, and (2) who contributed the claimed invention. Continuing with our above example, it’s easy to evaluate this case if one of these scenarios applies:
- If it was your idea to apply 1.21 gigawatts of power to a flux capacitor going 88 miles an hour (and your consultant merely followed your instructions), then you are the inventor and owner of the patent claim. See Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir. 1998).
- However, if you merely asked your consultant to build you a time machine, but left it to your consultant to figure out how to do it, then your consultant is the inventor. See Nartron Corp. v. Schukra U.S.A. Inc., 558 F.3d 1352, 1359 (Fed. Cir. 2009).
More than likely, though, your case will not be so cut and dry. In most cases, you will have come up some elements of the invention (like the flux capacitor) and the consultant will have come up with another (like the need to go 88 miles an hour). In cases where both you and your consultant contributed something to the claimed invention, you and your consultant will be deemed “joint inventors.”
In the end, it is always better to hire a consultant with a written agreement that expressly addresses these issues. By getting any third party that works on your invention to agree to assign any intellectual property arising out of the project to you, then you can own 100% of the patent – even though you might have to share inventorship (meaning you have to list them as an inventor on the patent application, but you will retain all of the rights in the patent itself). Typically, a consultant is more than willing to assign any patent rights to you at the beginning of the contract. But if you wait until after the time machine successfully works to ask your consultant to assign you all the patent rights, expect the answer to be “No.”
If you need more information on any patent issue, please send us a message. We have lawyers licensed in Arizona, Connecticut, New York, and Virginia, and we can handle federal intellectual property matters in any U.S. state and assist with international matters. For even more information, sure to connect with us on Facebook.