Options When Your Invention Is Stolen

If you disclosed your invention to someone and that person subsequently copied your invention and or filed a patent application on the invention, you may have options to take action depending on the circumstances. Several scenarios are explained below.

By an non-inventor employee
If your employee, who is not an inventor, is commercializing or has sought patent protection, you will want to review the documents that were executed when the employee was hired. Such documents could include non-disclosure or non-compete provisions.

The misappropriation of the invention could constitute a breach of the non-disclosure provisions and or could constitute trade secret misappropriation if the product/service at issue was not publicly available, or if publically available, if the employee had access and utilized non-public information about the products/services. The misappropriation could also violate a non-compete provision depending on its terms. Further, the misappropriation could violate the employee’s duty of loyalty to his/her employer.

By an inventor employee
Many of the claims explained above regarding the non-inventor employee may exist against a inventor employee depending on whether the employer has any rights in the invention.

To determine whether the employer has any rights in an invention, first any signed agreements between the employee and employer should be reviewed. Language pertaining to employee ownership of employee’s inventions should be reviewed if such language exists.

If no signed agreements exist a number of factors may be considered to determine whether the employer has any rights in the invention such as: (1) was the employee employed to invent, (2) did the employee work on the invention at the direction of the employer, (3) did the employee work on the invention during work hours, (4) did the employee work on the invention using employer equipment, and (5) was the invention related to the employee’s business or reasonably anticipated business or research?

Further state statutes might exist that impact what rights an employer can claim in an invention. For example, Illinois has a statute that limits an employer’s ability to own inventions made by the employee on his or her own time without any of the employer’s equipment, supplies, or facilities when the invention is not related to the employer’s business or the employer’s actual or demonstrably anticipated research or development.

By a non-employee co-inventor
If there are two or more non-employee inventors, under patent law, each inventor will own the patent jointly with the other inventors. This allows each inventor to make, market, sell, license, or otherwise grant rights in the patent and receive moneys therefrom without splitting the funds with the other inventors. Further, each inventor does not need to get permission from the other inventors to undertake such activities with respect to the patent.

Therefore it is important to account for the possibility that co-inventors might fall into a dispute about the patent, a patent application, or the commercialization of a patent pending product/service. Whenever there is more than one inventor it is best to form a legal entity in which the inventors own an interest (e.g. own shares). The ownership of the invention can be transferred to the legal entity by all inventors. The internal operating documents of the entity can describe (1) the ownership interest of each inventor (and other non-inventors, if desired), (2) how the invention will be commercially exploited, (3) how disputes are resolved between inventors, (4) what happens if one or more inventors wants to proceed but other inventors do not, and (5) many other business considerations. The legal entity formed can be a written partnership, a corporation, an LLC, or other entity.

If the rights in the invention were assigned to an entity, then action may be taken based on the rights held by the entity.

By a someone under an NDA
Prior to marketing or publicizing an invention, it is often necessary for an inventor or company to work with others to develop the product or to take other necessary marketing and business actions for launching the product. Often a nondisclosure agreement (NDA) is used between the inventor/company and the third parties prior to product/service launch.

If the invention was misappropriated by a person or entity to which the invention was disclosed under a NDA, then the NDA should be consulted for determination of rights you may have.

Some possible basis for taking action are explain above depending on the circumstances. If your invention has been misappropriated, you likely have options for taking action and recovering rights in the invention. If there is a basis for taking action, the first set may be to send a letter to the misappropriator. However, in some circumstances the first step will be be to file a lawsuit or take action at the USPTO. Seek advice of an attorney regarding the options you may have under your particular circumstances.