Patent Ownership Rights: Structuring Assignment and Employment Contracts Key Provisions, Implications for Litigation, Recent Court Treatment Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1. THURSDAY, MAY 3, 2018 Presenting a live 90-minute webinar with interactive Q&A Eman Ahmed-Fakhry, Senior Counsel, Hospital Therapies Department, Mallinckrodt Pharmaceuticals, New York Anne Elise Herold Li, Counsel, Crowell & Moring, New York Robert Schaffer, Partner, Troutman Sanders, New York
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Patent Ownership Rights: Structuring
Assignment and Employment ContractsKey Provisions, Implications for Litigation, Recent Court Treatment
The views and opinions expressed by Eman Ahmed-Fakhry do not necessarily reflect the official policy or position of any agency of Mallinckrodt Pharmaceuticals
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Employment agreements and IP• Most employment agreements have IP
assignment rights
• Companies rely on these to capture intellectual property of all types – patents, trademarks, copyrights, trade secrets, know-how.
• But in-artful drafting can create pitfalls
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• Patent Infringement lawsuit
• Issue under discussion:
Does Advanced Video have standing?
• The `798 patent lists three co-inventors
• The invention was created while the co-inventors were all employed with a predecessor in interest to Advanced Video.
Background
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• Under review, the employment agreement involves 3 important provisions:
• Assignment provision
• Trust provision
• Quit-claim provision
• Did these provisions effectuate an assignment of intellectual property that is sufficient to convey those rights to the employer?
Background
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• Two of the three co-inventors signed formal assignments which transferred their ownership interests during patent prosecution.
• The third did not, so the company relied on the employment agreement and used regular patent office procedures to continue.
• No challenge by her at this time• No mention of this issue in
numerous transfers of the rights
Background
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• Provision under review:
I agree that I will promptly make full written disclosure to the Company, willhold in trust for the sole right and benefit of the Company, and will assign tothe Company all my right, title, and interest in and to any and all inventions,original works of authorship, developments, improvements or trade secretswhich I may solely or jointly conceive or develop or reduce to practice, or causeto be conceived or developed or reduced to practice, during the period of time Iam in the employ of the Company.
Assignment and Trust Provision
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• Assignment Provision:
• The Court stated that “[t]he ‘will assign’ language alone does not create an immediate assignment of [the inventor’s] rights in the invention to [the company].”
• The “will assign” provision was only a promise to do something in the future, but did not mean that the employee had already effectuated an assignment.
Court’s Disposition – Not an Assignment
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• Trust Provision
• According to the Court, even if the interests were placed into a trust, “ it does not follow that that these interests were automatically, or ever, actually transferred out of trust in favor of [the company].”
Court’s Disposition – No Trust Created
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• Provision under review:
I hereby waive and quitclaim to the Company any and all claims, ofany nature whatsoever, which I now or may hereafter haveinfringement [sic] of any patents, copyrights, or mask work rightsresulting from any such application assigned hereunder to theCompany.
Quitclaim Provision
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Quitclaim – Nothing to disclaim
• The Court stated that the language in the quitclaim provision “waives [the inventor’s] rights to interests in any patent rights that she assigned under the agreement.”
• Since no patent rights were ever assigned to Advanced Video, the quitclaim provision has no application.
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Privileged Material Protected by Attorney-Client Privilege & Attorney Work Product
Recommendations
I hereby assign to the Company all my right, title, and interest
in and to any and all inventions, original works of authorship,
developments, improvements or trade secrets which I may
solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice,
during the period of time I am in the employ of the Company
any derivative works.
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Privileged Material Protected by Attorney-Client Privilege & Attorney Work Product
Recommendations
If the Company is unable to secure your signature on any
document for the purpose of securing intellectual property
rights from a government authority, either here or abroad,
following its reasonable efforts to do so, then you hereby
irrevocably designate and appoint the Company and its
duly authorized officers and agents as your agent and attorney
in fact, to act for and on your behalf and stead to execute any
documents and to do all other lawfully permitted acts in
connection with the foregoing.
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• Instruct new hires not to use documents or information from previous employer.
• Conduct new hire training on the importance of protecting your company’s assets. Be sure to cover obvious topics, such as following computer access policies and your company’s data encryption system, and less obvious topics, such as the possibility of accidental trade secret disclosure from holding business discussions in public places.
• Separate out trade secret agreements and training from the piles of paperwork and training that new employees receive so that they are not glossed over or disregarded as “just another piece of paper to sign.”
Key Takeaways: for arriving employees
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• If the new employee’s position at your company is going to be substantially similar to his or her previous position, consider initially assigning the employee to different projects. Also consider temporarily modifying the new employee’s job responsibilities.
• Periodically review the new employee’s work to confirm that he or she is not utilizing confidential and proprietary information belonging to previous employers.
• Require confidentiality and non-disclosure commitments from employees.
Key Takeaways: for arriving employees
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• Conduct an exit interview -- ask the right questions:• “Do you have any company documents or materials at home?”• “Have you returned all flash drives containing company information?”• “Have you stored any company documents in the cloud?”• “Do you understand that your non-disclosure obligations remain in effect?”• Ask about the new job: new employer, position, duties, and responsibilities.
• Disable employee’s access to computer systems and networks• Investigate prior to exit interview whether employee has taken, forwarded, or retains any
company documents or files and ask for its return• Review employee’s projects to ensure that all property has been returned• Utilize a written agreement with the employee to clarify the ownership and use of the
company’s resources and IP• Consider using an exit interview certification• Inform the employee that the company expects departing employees to conform their conduct
accordingly and instruct the employee to provide a copy of the agreement to his or her new employer.