Invention ownership – watch out for automatic assignment language in the employment agreement

A subsidiary of Major League Baseball was able to throw up, at least temporarily, a complete roadblock to a computer scientist’s patent infringement lawsuit.

It turned out that the computer scientist, a Dr. Barstow, had previously signed an employment agreement with his former employer (which apparently wasn’t otherwise involved in the infringement suit).

That agreement had automatically assigned, to Dr. Barstow’s then-employer, all of his rights in any inventions he made that were “related” to the employer’s business.

When Dr. Barstow’s new company sued the Major League Baseball subsidiary, the subsidiary’s lawyers of course learned about the employment agreement. So the subsidiary went and made a deal with the former employer to acquire its rights in the patent, along with a retroactive license.  With that in hand, the subsidiary successfully moved to have the infringement suit thrown out.

What mattered here was the language of the invention-assignment clause in Dr. Barstow’s old employment agreement. That language said that Dr. Barstow was, then and there, assigning his future work-related inventions to the employer: he “agrees to and does hereby grant and assign” to the employer all rights in future inventions falling within the scope of the agreement (emphasis added).

That meant that any transfer of Dr. Barstow’s ownership rights to work-related inventions had happened automatically, as a matter of law, as soon as he (and his brother) had made the inventions. There had been no need for the former employer to get Dr. Barstow to sign any additional paperwork to confirm the assignment.

(The case isn’t over yet:  An appellate court ruled that a question still existed whether the inventions in question were sufficiently work-related to come within the scope of the automatic assignment.) 

Lessons:

• If you’re an employee working on a sideline project that you don’t think should belong to your employer, you need to read your employment agreement carefully, and consider consulting an attorney.
• If you’re an employer, have your IP lawyer review the invention-assignment language in your employment agreement forms.

Reference: DDB Technologies LLC v. MLB Advanced Media LP, No. 2007-1211, at 9 (Fed. Cir. Feb. 13, 2008) (affirming decision that former employee could not assert equitable defenses to his assignment obligation).