An invention is broadly defined as “anything that is created or devised.” As the Supreme Court once remarked, “the word cannot be defined in such manner as to afford any substantial aid in determining whether a particular device involves an exercise of the inventive faculty or not.” Today, most “inventors” are employees of a corporate enterprise and work in teams, but this was not always the case. Individual “hero-inventors”—such as Eli Whitney with his famous cotton gin—once typified inventorship.
With the rise of employee-inventing has come a rise in “preinvention assignment agreements” governing the ownership of employee inventions. Preinvention assignment agreements are employment contracts signed before employment commences that require the employee to assign any inventions made during employment—and sometimes for a set period after employment ends—to the employer. Preinvention assignment agreements can be extremely broad and can even cover inventions made on the individual’s own time and using their own resources.
As many scholars have noted, assignment agreements present bargaining issues for employee-inventors, who have not yet created their inventions and do not know what they are giving up. Employee-inventors may also be ignorant about the legal implications of an assignment agreement and about what the common law rules would be in the absence of an assignment agreement. Additionally, overly broad holdover provisions assigning inventions to a former employer after employment has ended may disincentivize innovation, which can create negative effects for the marketplace and society at large. Notably, disincentivizing innovation contravenes what patent law was intended to do.
Yet, despite all these policy issues, assignment agreements are regularly upheld by the courts. This is likely because assignment agreements are “firmly grounded in the principles of contract law that allow parties to freely structure their transactions and obtain the benefit of any bargains reached.” However, as this Note will argue, reasonable limitations that balance the interests of the employer and the employee are both warranted and feasible.
This Note proposes a Uniform Invention Assignment Agreement Act (“UIAAA”) modeled in part after the Uniform Restrictive Employment Agreement Act (“UREAA”). The Note proceeds in five parts. Part I provides background information on UREAA. Part II provides a brief history of employee invention law. Part III provides the modern rules and statutes pertaining to employee invention law. Part IV explains why UIAAA is needed. Part V explains what should be included in UIAAA. A proposed draft of UIAAA is included in the Appendix of this Note and could be helpful to the Uniform Law Commission (“ULC”) if it agrees with the conclusion of this Note that UIAAA is needed.
To read this Note, please click here: The Case For a Uniform Invention Assignment Agreement Act (UIAAA).
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