Personalized User Model, LLP v. Google Inc., [2014-1841, 2015-1022] (August 18, 2015), reminds us that an employee agreement will preferably include a immediate assignment of the employee’s inventions. Personalized User Model sued Google for patent infringement. In the course of discovery, Google learned that the patented inventions were conceived while one of the co-inventors was employed by SRI. In a move worthy of Harvey Specter and Mike Ross in Suits, Google attempted to acquire SRI’s rights in the invention. Unfortunately for Google, the Federal Circuit agreed with the district court that the statute or limitations prevented Google from asserting a breach of contract action against the co-inventor. The result likely would have be very different, if, instead of simply agreeing to assign inventions conceived during employment:
I agree to execute such documents, disclose and deliver all information and data, and to do all things which may be necessary or in the opinion of SRI reasonably desirable, in order to effect transfer of ownership in or to impart a full understanding of such discoveries, improvements and inventions to SRI.
the agreement provided that the inventions automatically belonged to SRI. While one can forgive this lapse in an agreement drafted more than thirty years ago, today it is generally advisable to have an automatic assignment. Several years ago in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., 583 F.3d 832, 842 (Fed. Cir. 2009) the Federal Circuit explained that the language “agree to assign” is merely an agreement to assign in the future requiring a subsequent written instrument. In contrast, the words “do hereby assign” have been construed as a current assignment of future inventions. See FilmTec Corp. v. Allied-Signal, Inc., 939 F.2d 1568, 1572-73 (Fed. Cir. 1991). If SRI’s agreement had included a current assignment of future inventions, SRI would have had ownership rights to sell to Google, irrespective of any breach by the employee.
Personalized User Model is a great reason to review existing employee agreements, and to make sure that they include a current assignment of future inventions. Of course, if your agreement does provide include a current assignment, you have to make sure that the rest of your paperwork is consistent. Thus, rather than having the inventor subsequently execute an assignment of a particular invention, one should have the inventor execute a confirmation of the prior assignment of that invention. Furthermore, if because of some business arrangement, a company want to assign rights to some third party, the company must do so itself (because of the automatic assignment), and an assignment from the employee would be ineffective to do so, because the rights had already been assigned to the company. Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., 583 F.3d 832, 842 (Fed. Cir. 2009).