Folks, you are in for a treat! As promised, we have a guest blogger joining us this week. Please welcome Judy Naamat, Esq., a patent attorney with over twelve years of experience prosecuting patents in the electrical, computer, and mechanical arts. At the end of this month, Judy will join the patent boutique law firm, Hoffman & Baron, with offices in Long Island, NY and Parsippany, NJ. Judy earned her J.D. from Saint John’s University School of Law in 2011, prior to which she practiced as a registered patent agent. She earned a B.S.E. in Electrical Engineering and Computer Science, cum laude, from the University of Connecticut in 1983. Prior to her career practicing patent law, Judy worked as a Systems Software Engineer with Grumman Aerospace Corporation. Judy has authored multiple articles published in patent law journals. Until Judy assumes her new position, she can be reached at email@example.com.
And now, without further ado, heeeeeeeerrrrrrreeeee’s Judy!
This week we will begin to discuss the impact of certain provisions of the American Invents Act (AIA), on employers. The AIA, enacted on September 16, 2011, revamps major portions of patent law, including a wide array of provisions with different effective dates. We will focus now on provisions that became effective on 9/16/2012 that simplify the manner in which employers can take ownership of inventions invented by their employees. This date is not retroactive and only affects patents with effective filing dates after that date. Employers and inventors still need to know the old law (pre-AIA (for this provision, before 9/16/2012)) and the new law (post-AIA (on or after 9/16/2012)) and when to apply it.
By default, both pre-AIA and post-AIA, absent a proper assignment (to be discussed in an upcoming blog), the inventive entity (that means the totality of inventors) of a patent application has full ownership of the patent, and control during prosecution of the patent. Patent prosecution is the process of interacting with the United States Patent and Trademark Office (USPTO) from filing an application until the ensuing patent is granted. Inventors are those individuals who contributed to the claims asserted in the patent.
Pre-AIA, the terms “inventor” and “applicant” were synonymous. An assignment assigned ownership of the patent to an assignee, with the inventor retaining certain control during prosecution. When an inventor refused to file a patent application or could not be found or reached after diligent effort, an assignee or party showing sufficient proprietary interest could file the application in the inventor’s stead. However, first the assignee would need to show a justification for such action, which included showing that such action was needed to prevent irreparable damage. As you can well imagine, the procedure is cumbersome, complicated and expensive.
Post-AIA, the default applicant is still the inventor. However, an employer who establishes itself as an Assignee, Obligated Assignee or Person showing Sufficient Proprietary Interest (we will discuss these below) now has the right to be the Applicant, including the rights to control prosecution and own the patent once issued.
Employers benefit even further. The AIA provides a simplified solution when an inventor refuses or cannot cooperate with the patent filing process or cannot be found. As an Applicant or an assignee, the employer can file an easy to prepare Substitute Statement, a simple form with check boxes that is signed by a party having knowledge of the facts. The AIA eliminates the pre-AIA requirement to show facts establishing a justification and the need to prevent irreparable damage. Also eliminated is the requirement for a supplementary declaration filed by all of the other inventors.
Remember, the need for a Substitute Statement may arise years after the inventors did their inventing. Inventors often change employers, addresses, and alliances. It is still good practice to preserve evidence related to why the inventor did not participate in the filing process.
Ideally an employer should do two things to establish itself as the Assignee. First, have each employee and contractor execute a carefully written authorization that obligates him or her to assign all rights to his inventions to the employer and authorizes the employer to file as the Applicant (Click here to view last week’s post on works made for hire and assignment clauses). Second, file and record an assignment in association with the patent application, best done in the form of a combined declaration/assignment.
The authorization should be safely stored. Language satisfying this authorization can be included in, for example, employment agreements that must be issued to new and current employees (satisfaction of consideration issues may exist for current employees) and contractor contracts. Other creative areas where an employee may be required to sign an authorization include invention disclosure forms, lab notebooks, and even computer pop-up screens. Where appropriate, usage of a notary public or other witness may be worthwhile in the event that the document is needed as evidence in litigation.
Care should be taken to word the obligation to assign properly. A recent 2011 Supreme Court case Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (Sup. Ct. June 6, 2011) affirming previous Federal Circuit decisions tells us that the language “agree to assign” is not sufficient, whereas “do hereby assign,” is sufficient for the employer to acquire title of an ensuing patent. Employers are advised to double-check whether all new and existing employees and contractors have signed a proper authorization, paying special attention to the language. Where necessary, have your employees and contractors sign new authorizations, but, depending on the laws of the state in which you are doing business, you may need to provide your employees additional consideration (i.e., something of value, such as a bonus).
If the employer fails to obtain an executed assignment from one or more of the inventors, do not despair! The employer may still establish that it is an Obligated Assignee, which will suffice for the employer to file as Applicant. A showing of a proper authorization, as described above, may be sufficient here. Yes, that authorization can be mighty important!
If the employer does not have an executed assignment or proper authorization from each of the inventors, the employer may still provide a showing of Sufficient Proprietary Interest. To do this, the employer needs to file, a legal memorandum to a court of competent jurisdiction (federal, state, or foreign), prepared and signed by an attorney; an affidavit or declaration by a party having first hand knowledge that shows proof of pertinent facts; and a petition with a petition fee. A patent application that has been allowed by the USPTO will be granted, i.e., mature into an issued patent, once the applicant pays the required fee for issuing the patent (the “issue fee”). However, if the applicant fails to pay the fee in a timely manner, the patent application will become abandoned.
In next week’s post, we will focus on employer strategies and changes to the filing process due to implementation of the AIA.
Click here to learn more about Janette Levey Frisch, author of The Emplawyerologist.