Author: Daniel A. Lublin
Do you retain ownership of an invention or a great idea that you’ve thought of or created while at work?
Usually, ownership of a workplace invention isn’t in dispute.
For instance, when an employee is hired to create a new business strategy for his/her employer, the new and great idea that comes about then belongs to the employer — for its own use and profit.
However, difficulties can arise when, during the course of employment, an employee creates something of value that he/she wants to then use to turn a profit outside of the job.
In this case, who retains the rights to the idea?
The general rule when it comes to workplace inventions is ownership will belong to the employee. This is the case, unless there is a contract stating the employer retains rights to the invention or the individual was employed for the purpose of inventing or innovating what it was that was ultimately created. This rule can hold true even when the invention relates to an aspect of the employer’s business.
For example, in one Ontario case an employee named W was hired to work on the creation of special technology projects for his employer. After the employer discovered W had come up with a useful idea he had patented for himself, he was asked to sign a contract that passed ownership of his rights in any inventions to the company. He signed.
Later, the issue of ownership came about when W designed a new money-making idea, although he hadn’t been asked to do so by the company. W thought he should be compensated for his creation, as the company was turning a huge profit from it.
The court, however, disagreed because of the agreement W had signed. If he wouldn’t have signed it, then he could have used the invention for his own gain.
The moral of this story is W should have been reading Employment Law 101. Then he would have known that inventions or ideas that are created while at your job, usually belong to you — unless you sign an agreement stating the contrary, or unless you were hired for the purpose of creating the type of invention that you ultimately did.
With that in mind, each situation is unique and the following factors would also be considered:
• Were you hired for the express purpose of inventing?
• Were you encouraged to develop the idea by your company?
• Is the invention the product of a problem you were instructed to solve?
• Were you dealing with confidential information given to you by your company?
The answer to these questions could make all the difference. Therefore, the best advice is to consult with an expert prior to signing employment agreements, especially when you aren’t sure what it is you are signing.
For W, it probably cost him millions.