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Doug Nebeker ("Doug")
I find myself in a situation whose dimensions I do not fully understand. Therefore, I’m posting to this forum to benefit from the collective wisdom of the experts here.
Last year, I conceived a technical invention that I believe can have really wide applications. I work for a Fortune 500 company, so I disclosed my invention as per the internal protocol. Subsequently, the invention was filed for patent protection (US) in my name but licensed to my employer. The patent has not yet been granted.
While the employer I work with is very innovation-friendly, I believe my invention doesn’t exactly align with their current business priorities. I am apprehensive that in the longer run my invention might become just another patent in their already formidable IP portfolio. They did realize it was worth protecting (and I am grateful to them for that), but they may not help me realize its full potential.
I am aware of some exciting startups and small companies that are working on the exact type of problems that my invention solves. Some of these companies might be able to bring my invention to life for the greater good. In a completely legal way, I want to talk to some of these companies and check if they find my work interesting.
Here are some questions I have:
* Assuming it is clear that my invention won’t find favor with my current employer beyond a certain point, can I go out and pitch it to other companies?
* Assuming another company is interested in my work, how can they legally bring me on board and also “acquire” the invention? As I shared, the patent hasn’t yet been granted; yet the invention is technically my IP licensed to my current employer. I am ready to talk to my current employer about this when the time is right.
* Assuming that’s the right thing to do, how do I really go ahead and talk to these smaller companies? Send cold emails?
* I am not based in the USA or a US citizen. Will that complicate matters — legally speaking and in terms of these companies wanting to work with me? I am based out of a country completely friendly to the US and not under any trade restrictions. Also, I am ready to move to the US if something materializes.
I’m aware what I am thinking of might not be easy to pull off, but aren’t all things worthwhile that way? And, just to reiterate, I plan to operate completely within the framework of the applicable laws.
Your advice is greatly appreciated.
>> "[...] yet the invention is technically my IP licensed to my current employer."
Unless you have a very favorable contract with your company, I doubt that is true. But maybe you do have a good contract. See a lawyer before you start investing time & money into your idea.
Saturday, January 25, 2014
From what you said, the patent is going to be owned by your company when it is granted, with you as the author.
No company is going to talk to you about it if you do not own it.
If your company, having gone to great expense to generate the invention and then file the patent finally agrees to sell it to you then you will be in a position to do something, but this sounds unlikely.
If you are really convinced there is a lucrative market for this type of invention and you like taking big risks then you could leave your company, later and independently invent a new technique not based on the previous one, and patent and sell that technology.
I am a random guy on the internet, and not a lawyer.
> * Assuming it is clear that my invention won’t find favor with my current employer beyond a certain point, can I go out and pitch it to other companies?
Unless you signed a non-disclosure agreement with your company that forbids you from discussing the invention, then you legally can talk to companies about it. But, your company probably won't appreciate you doing that, because they are your company's competitors. If you truly are the patent *owner*, then you could take a calculated risk: Company X could license the technology from you and profit share with you, and you will be fired from Fortune 500 company but the money you make on the invention would make up for that. But the key word there: risk.
And, critically, are you sure you are the patent OWNER and not just the patent INVENTOR? As Wyatt also said, my guess is that your company is actually the patent owner, but I'm not sure. Here's a sample of discussion on this point (emphasis mine):
"With patents, the concepts of inventorship and ownership, though related, are distinct. Inventorship is a legal concept that is based upon who meets the requirements to be an inventor. On the other hand, the concept of ownership relates to who actually owns the legal rights associated with the patent. In the case of an independent inventor, the inventor and the owner of a patent are usually the same. Often, especially in a university or A CORPORATE SETTING, the inventor does not own the patent. Rather, the university OR CORPORATION IS THE OWNER. "
So the first order of business is to make sure you're clear about who owns this patent. You referred to the Fortune 500's "already formidable IP portfolio", and that means, to most people, a trove of OWNED patents, not just mere license agreements. Licensing agreements are weak compared to patent ownership, because they a) don't prevent competitors, b) provide no lawsuit power, c) can be changed, etc. All the kerfuffle in the news about Apple and Samsung, Google, etc., etc., are over OWNED patents in their portfolios. All big companies know this, and yours does, too. In fact, usually the default is that any invention invented by an employee is automatically the property of the company, as per the employment contract.
Although your situation may be different. Is it?
> * Assuming another company is interested in my work, how can they legally bring me on board and also “acquire” the invention?
I'm not sure what "bring you on board" means. As far as acquiring the invention, they can either buy the patent from the owner (you or the company, see above) or they can license the invention.
> * Assuming that’s the right thing to do, how do I really go ahead and talk to these smaller companies? Send cold emails?
No idea what other options you'd have. Maybe trade shows. You'd want to proceed very carefully whenever patents are involved, and the advice you hear is have a lawyer be your communicator or at least part of your team. Scott will jump in here in about 14 seconds and let you know that the rates for good quality patent lawyers are > $1,000/hr or something insane. This is not for the feint of heart.
> * I am not based in the USA or a US citizen. Will that complicate matters — legally speaking and in terms of these companies wanting to work with me?
It might, I don't know. My guess is it would make it more challenging, but I really have no idea other than there may need to be in-person events that your being in the U.S. would make easier. I don't think the citizenship is much of a concern.
> I’m aware what I am thinking of might not be easy to pull off, but aren’t all things worthwhile that way?
No. Some things are very hard to do and are not worth doing.
You have absolutely no personal rights whatsoever to this invention since it was done and disclosed in the scope and course of your employment, which you have attested to in your patent filings. They own it completely. It is their not yours.
If you wished to use it in something in the future in work elsewhere, you will have to license it from your employer.
Once the patent is filed, it can look good on your CV to have patents listed. So it's good for bragging rights.
"Scott will jump in here in about 14 seconds and let you know that the rates for good quality patent lawyers are > $1,000/hr or something insane."
Racky is correct about that. To get correct advice regarding patent legal issues, you pay at least that. $400/hr for routine filing work done by a junior associate, but for legal opinions and strategies it costs. You can pay less and easily get a guy who doesn't know anything.
However, as far as international law IP attorneys goes, that's even harder to find anyone qualified. Maybe there is some out where in whatever country you live in, your employment contract is meaningless and you somehow could file yourself (and pay for) a patent in your own country, and then license to non-US companies that don't do any business in the US at all. That is a long shot and would require some super star attorney well versed in the IP laws of your country, of the US, and how they interact. Good luck finding this guy since he probably doesn't even exist.
BTW, a tip for identifying a shit patent attorney - they tell you it's easy to get a design patent and offer to do that for some cut rate less than $20,000. Design patents are totally useless for tech. They are similar to trademarks and are used to protect stuff like the shape of the Coca-Cola swirl. They don't protect inventions at all. But LOTS of crap attorneys out there will advise gullible fools to get them since they are trivial to file, will never be challenged, and the dumb client thinks they got a real patent.
This comes up on Shark Tank, btw. Some fool has an invention and there's no patent. NEXT! Next fool up has an invention and says "I got me a patent". VCs then always ask, "What sort of patent?" Fool always say "design patent", beaming with pride. VCs then roll their eyes and say "Next!"
Man, this Shark Tank has it down, only recently started watching it a bit. I am not sure how educational it is since they don't always explain things. Like they don't say WHY they chuckle and roll their eyes at the fools with design patents. They could do to explain things more if this was intended to be a business class rather than entertainment. Still, it is good for a reality check.
Thanks for sharing your candid opinion with me. Since I saw a couple of assumptions being mentioned, I thought I'd add the following to my original post:
* The patent is NOT a design patent. It is very much a utility patent.
* My current employer does own the "right, title and interest" in the invention. That is true of all the inventions they file.
* The smaller companies I was thinking of speaking to are in no way my employer's competitors. As I mentioned, my invention is not in the business areas that my current employer is focused on. That is the exact reason I thought a smaller company (and I have a few in mind) would have greater utility for my invention. For my employer, the invention lies in an ancillary area that's interesting but not considered "hot" from a business perspective.
Getting fired from my current position could no way be the part of the plan ahead. I was hoping I would be able to explain to my current employer the exact situation and persuade them to license the invention to any smaller companies who are interested. "Bringing me on board" meant my joining the smaller company eventually -- to work on the specifics of productizing the invention. And all this while respecting IP law.
For a minute, think of the situation from my perspective. Since I conceived the invention while I was an employee, it was my legal and moral duty to disclose the invention. Also, I am giving my current employer all flexibility to make the "first use" of the invention if they consider it commercially lucrative.
However, if they don't see any direct commercial interest in the invention, wouldn't it be simply fair on their part to let me take the invention to a smaller company in whose core business area the invention lies? In the process, they could gain from the licensing fee for the invention.
IANAL too, but I'm just thinking from my logical left brain right now.
> Getting fired from my current position could no way be the part of the plan ahead. I was hoping I would be able to explain to my current employer the exact situation and persuade them to license the invention to any smaller companies who are interested.
Whether that will be in your best interest or not will depend much on Person(s) X, the one(s) make(s) the decisions on this at your company. If they see things the way you do, it may work out very favorably. If they don't, perhaps it won't. Even the rather limited real world experience I've had has shown me that "the reasonable thing to do" and "what the boss thinks ought to be done" are often maddeningly divergent.
> "Bringing me on board" meant my joining the smaller company eventually -- to work on the specifics of productizing the invention.
Here's a potential red flag for Person(s) X--will your joining that company means we lost you to them? Do we now have to go through the fuss of replacing you just because we signed on for this licensing?
> However, if they don't see any direct commercial interest in the invention, wouldn't it be simply fair on their part to let me take the invention to a smaller company in whose core business area the invention lies? In the process, they could gain from the licensing fee for the invention.
ALL that they will consider, I assume, is the last bit, about what's in it for them. If they think the licensing deal is worth the overhead of your working with that company, then sure. Or if they don't think that they'd rather try to start up a new initiative at your company in this area themselves, with you at the helm.
I guess if I were you I'd read up on other people who have been in your situation and what the outcomes were (perhaps you can Google around), and get a sense for what's the worst that could happen. I'd also think about what Person(s) X are likely to do.
Why try to persuade your company to let you spend some time approaching other companies to try to license the technology? If it works out, you might can stay with your current employer and might get a promotion/bonus/corner office.
Sunday, January 26, 2014
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