What Is an Invention Agreement?
An invention assignment agreement is a contract between two parties, the employer and the employee. Anything the employee invents while in employment has to be disclosed to the employer and the ownership rights to such design are assigned or transferred to the employer. The employee might have to assist the employer in acquiring a patent for this invention.
When Do You Need an Invention Agreement?
An employee invention agreement is usually signed when an employer hires an employee involved in any creative or development work which can be marketed. The ownership rights and intellectual property for such inventions pass on to the employer, and the employer will profit from such inventions. The employee has to list the designs created before joining the employer so that the employer cannot make any claim against them if there is an invention agreement form.
Inclusions in the Invention Agreement
The contents of a standard invention confidentiality agreement are as follows:
- The names of the employer and the employee
- Purpose of the contract: Protection of confidential information
- Disclosure of inventions
- Work for hire: Assignment of copyright work to employer
- Assignment of inventions created during employment
- Non-compete clause: Employee will not join any of the employer’s competitors
- No solicitation of any clients, employees or suppliers
How to Draft an Invention Agreement?
Here are the points to consider while drafting a confidentiality and invention assignment agreement:
- Both parties should be eligible to participate in a contract: Both should be of legal age, sound mind and not be coerced
- The product or service being patented and the market value of such patent
- Terms of the contract should be fair
- Dispute resolution clause: Deciding how the dispute will be resolved, the jurisdiction and sharing of attorney fees
- Termination of a contract clause: Either party can give notice for premature termination of the contract.
- Reservation of page: There should be a separate page for the signature of both parties
- Signing the agreement: The agreement should be signed by both parties to make it a valid document
- Authority of design and inventions
- Circumstances that would assign the invention over to the employer
- What constitutes invention
- Assignment of copyrights of the inventions unconditionally to the employer
- Validity of the agreement even after the termination of the employee
Benefits of Invention Agreement
The benefits of an invention agreement are as follows:
- Gains for employer and employee: The employer gains from inventions created while the employee is in employment. The employee has rights to all devices designed before employment.
- Legal remedies: If there is a breach of any clause, then the injured party can take legal action.
- Employer Protection: With the non-compete and non-solicitation clause, the employee cannot join a competitor.
What Happens in Case of Violation?
When there is a violation of an employee invention assignment agreement, then the injured party sends a legal notice to the other party. If the opinion is not heeded, the following legal remedies are available to the injured party:
- Monetary Damages: The injured party can claim monetary damages, including loss of profits due to the other party in case of a total breach of contract.
- Restitution: The injured party will have to be restored the money and property given to the other party.
- Rescission or Reformation: If there is fraud involved when the contract was signed, then there are two options. Either the contract is canceled under the rescission of the contract, and no party has any contractual obligation, or a new contract is drawn up by the court.
- Specific performance: When the deal has reached an advanced stage, then the other party has to fulfill the contractual obligation.
An invention agreement is a typical feature of an independent contractor that allows them to certain rights to inventions created or conceptualized by the employee. You can refer to an Invention Agreement for a detailed view on remunerations, reformation and more.