You Are Hired - Part II

8/10/2019 You Are Hired - Part II

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You Are Hired.Coolie! Part II


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Pre-Invention Assignment Agreements - PIAA

Employers require the employees to sign a pre-

invention assignment agreement, as part of theiremployment contract, to assign any invention the

employee may invent during his/her tenure in the

organization.

A pre-invention assignment may also be part of

employee manual or in other employee guidelines


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Understanding PIAA

It essentially has six different clauses

1. Pre-Invention Assignment Clause (PIAC)

2. Invention Disclosure Clause (IDC)

3. Power of Attorney Clause (PoAC)

4. Holdover Clause (HoC)

5. IP Forfeiture or Waiver Clause (IPFC)

6. Assignment of Prior Inventions (APIC)


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xcerp s rom a re- nven on ss gnmenAgreement

I acknowledge and agree that in consideration of

employment by the Organization, all inventions that(a) I develop using the Organizations resources and

capabilities such as labs, machines, supplies,

facilities, time, people or trade secrets, or

(b) result from work I perform for the Organization, or(c) relate to the Organizations current or expected

future research and development,

are the sole and exclusive property of the Organization.

I agree to assign, and hereby does assign, all suchInventions to the Organization.


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Invention Disclosure Clause

It is not uncommon to include invention disclosureclausein the pre-invention assignment agreement asan employer may not be able to own an invention bythe employee unless the existence of the same isdisclosed by the employee.

Sample Invention Disclosure Clause During the term of my employment at XYZ organization, I will

promptly inform the Organization of the full details of allinventions that I conceive, individually or collectively withothers), and which (a) are developed using Organizationsresources and capabilities or (b) result from work I perform for

the organization or (c) relate to the Organizations current orexpected future research and development.

The scope of the invention disclosure clause could belimited, as indicated above, or it could broadly coveranything that the employee invent during the term of


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Power of Attorney Clause

PoA Clause enables the employer to file for a patent

and enjoy the administration of patent rights without

the need for obtaining the signature of employees in

relevant documents.

Sample PoA ClauseI hereby appoint the organization, its authorized

officers and agents as my agents and attorneys to

execute and file such documents to further the

prosecution, issuance and enforcement of patents,

as if executed by me, especially if the organization

is unable to obtain my signature on any relevant

document due to my mental or physical capacity or

any other cause.


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Post-Employment Invention Assignment Clause

The objective of post-employment invention assignment isto prevent employees from leaving the organization without

disclosing the invention and trying to patent the same afterexiting the organization within a reasonable time. Post-employment invention assignment is also known asHoldoverClause.

Sample HO Clause I hereby assign to the Organization my entire right, title and

interest in such inventions developed after 6 months oftermination of my employment which relate to the subject matterof my employment with the Company during the 12 month periodimmediately preceding the termination of my employment.

Limitations of HO Clause It should be reasonable in terms of time, say 6 months to 1

year post-employment period Should be re lated to th e past respon sibi l i t ies o f the emplo yeeand scope of bu siness(and / or)

Should have been developed using the trade secrets of

prev ious employ er


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IP Forfeiture clause

It is possible that employees may have conceived an

invention, patented or yet to be patented, before

joining the organization. Therefore, organizations

may use IP Forfeiture clause (or Waiver Clause) in

order to prevent the claim by the employees that an

invention was conceived before joining the

organization.

Sample IPF Clause

I have listed all inventions in the Exhibit, prior to my

employment at XYZ Organization, that I conceived andpatented or conceived and have an interest to patent. Apart

from the above, any other inventions, not so listed in the

Exhibit, shall be deemed to have been conceived during my

employment at XYZ.


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IP Forfeiture Agreement

At my current job I had to sign an IP forfeiture

agreement, and in the blank area where I could name

code that the company could not own, I of course

listed things as my graduate projects, a few pet

projects by name, and the clause "and

miscel laneous current and future open source

projects".

HR reviewed all my stuff and this was not even

contested, so I am covered. Folks, we have to

stand up and push back. There are times to

comprom ise, bu t this is one area that is entirely

abused. (www.slashdot.org, 2003).
http://www.slashdot.org/http://www.slashdot.org/http://www.slashdot.org/http://www.slashdot.org/http://www.slashdot.org/http://www.slashdot.org/


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Failure to sign a IP Forfeiture Clause

Employees may not be able to claim ownership of the

inventions conceived before employment if they fail to

list out any such invention and provide necessary

document support.

If the employee provides no such list, it would be

deemed that the employee has no such prior

invention or they have been assigned to previous

employer or some other third party.


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s ng r or nven ons n e ourse oEmployment

What i f the employee provides the l is t of invent ions

but later makes use of su ch in vent ions in the

products o r serv ice of the employer?

In such scenarios, the employer may mention in the

pre-invention assignment that the employee agrees

and assigns a perpetual, irrevocable, worldw ide,

royalty free license to the employer to exploit such

prior inventions used in the course of employment to

further the interest of the organization.

It includes l icense to use, copy, mod ify, create and

distr ibute wo rksbased on such prior inventions and

even to g ive such r ights to other ent i t ies.


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Ownership of Inventions without and with PIAA

Although many employers enter into PIAA with theiremployees as they do not want to leave the ownership

matters to chance, it is possible that disputes related toownership of inventions may arise between employers andemployees with or without PIAA.

Even when there is a PIAA between an employer and anemployee, the pre-invention assignment agreement doesnot necessarily guarantee ownership of an invention to anemployer as the validity of such an agreement on thegrounds of unconscionability or ambiguity may bychallenged by employees.

Determining ownership of inventions without a formal PIAAwould be guided by certain rules evolved by courts over acentury based on many disputes.

In either case, courts largely use the typo logy ofinvent ions and emp loyees to determine the ownership ofinventions


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Classification of Inventions

Employees Invention

An invention falling within the scope of employment and

resulting from the present or past duties and responsibilities of

an employee

Service Invention

An invention falling within the scope of the business of anorganization but not necessarily within the scope of

employment of an employee

Free Invention An Invention not falling within the scope of employment of an

employee and the scope of business of the organization


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Classification of Employees

Specific Inventive

Employees who are hired to invent a specific product or

device or process or hired to solve a specific problem (e.g.

Design Engineers and Scientists)

General Inventive

Employees who are hired to perform general research ordesign work but encouraged by the employers to pursue their

creative instincts beyond their roles and responsibility (e.g.,

Google or 3M motivating their employees to spend 10% to 20

% of their paid time to work on their pet projects)

Non-Inventive

Employees who are not hired to invent (e.g., A Shop Floor

Worker or a Non-Technical Employee)


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Determining Ownership of Inventions

Notwithstanding the type of employees, Service

Inventions and Free inventions which are conceived

Using organizationstime and resources may provide the

ownership to the employees but employer is most likely to

have a Shop Right.

Not using organizations time and resources are most

likely to result in legal disputes when the employer makes

claims for ownership or Shop Right.


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Shop Right

Shop right entitles an employer to use employeespatented invention and protects the employer from

patent infringement lawsuit by the employee

It is an Irrevocable, Royalty Free, Non-Exclus ive,Non-TransferableRight to use the employee patent.

Non-Exclus ive: Employee is the owner of the patentand s/he can freely license the patent to any third partyeven to the competitors of the company

Non-Transferable:

Employer may not be able to use the employeespatentedinvention when the use is restricted in one or two locationsas it would be deemed to be a patent infringement

Employer cannot sell the license to a third party except insale of business as a whole.


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Defining Patent

A Patent is a set of exclusive rights conferred by a

government authority for an invention, which could be

product or process or technical solution to a problem.

It provides protection for the invention to the owner of

a patent for a limited period so as to ensure that the

invention cannot be exploited by others without the

consent of the patent owner.

- World Intellectual Property Organization


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Assignment of Patent Rights

Patents Acts of many countries provide for reasonable orequitable remuneration for employee invention. However,Indian Patents Act 1970 does not have provisions for eitherdetermining the ownership of employee inventions during thecourse of work or remuneration.

However, an employer in India cannotautomatically apply for apatent for in invention made by an employee during the course ofwork under the contract of service (Unlike the Indian Copyright

Act, 1957 which confers the right of first owner to the employerby default, unless there is an agreement to the contrary.)

It implies that the employer must obtain from the employee boththe assignment of ownership to the invention as well as the rightto apply for the patent since Section 7 (2) of Patents Act 1970demands that the assignee shou ld provide the proof ofrightto applyfor the patent.

It essentially means that the employer Must persuade theemployee to assign the right to invention as well as right to

patent for a consideration. If there is a dispute in defining theownership or otherwise, it would depend more on the


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Unity of Ownership in Patent

Typically, all employees are expected to assign the

ownership of patents to the employer.

However, if the co-inventor is not an employee but an

another firm, like the Satyam Vs Upaid story, the

organization is required to buy the co-inventors

ownership rights in order to have full ownership on the

invention.

The organization also has an option to sell its

ownership rights to the co-inventor for a

consideration.

In the absence of cooperation between the

organization and the co-inventor, neither party would

be able to establish unity of ownership so as to

enjoy the valuable patent rights protected under the

patent act.


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Financial Ownership

Microsoft alumni hate Microsoft . Precisely

because they feel the one thing it offered them

was money and noth ing else, they resent that all the

publicity goes to the top people, to one top man, and

they dont get recognition. Also they feel the value

system is entirely financial, and they see themselves

as professionals. May be not scientists, but appliedscientists. So their value system is different(Drucker,

2002).

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Qualifications as the Central Dimension of

Employment Relationship

Employees must have an operational knowledge ofnot just one, but multiple specialist areas.

Cognitive-abstract qualifications are becoming moresignificant.

Socio-normative qualifications are becoming moreimportant.

Shift from classical soc ial norm s like accuracy, punctualityand loyalty to modern socia l norms creativity, customerorientation, responsibility and cooperation.


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Ownership Vs. Market Capacity - Decoding the

Power Relationship

The basis for power relationship

Marx

Ownership i.e., employer owning the means of

production and employee owning the manpower.

Giddens

Market Capacity i.e., employers ability to

replace an employee than employers ability to

secure a new job and a new employer at the

same or higher wage level.

The conditions of labour market will restrict or

extend the behavior alternatives available to both

parties.


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Ownership and CoP

a corporate asset should be social in o r ig in.

Swiping secrets is odious to both law and etiquette,and thats a legally enforceable . First you swap

proprietary information all the time; in fact, the

company probably wouldnt prosper unless you did.

Second, the real genesis and true ownership o f

ideas and know -how arent corporate. Nor

personal, for that matter. They belong to

someth ing that is coming to be known ascommunity of practice (Stewart, 1997, p. 95).


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Community of Practice (CoP)

Lave and Wenger (1991) developed and articulated

the concept "Community of Practices

Members of a community are informally bound by

what they do together. from engaging in lunchtime

discussions to solving difficult problems. And by what

they have learned together by mutual engagement in

these activities.


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Example of Community of Practices

"You are an engineer working on two projects within

your business unit. These are demanding projectsand you give your best. You respect your teammatesand are accountable to your project managers. Butwhen you face a problem that stretches yourknowledge, you turn to your people like Jake, Sylvia

and Robert. Even though they work on their ownprojects in other business units, they are your realcolleagues. You all go back many years. Theyunderstand the issues you face and will explore newideas with you. And even Julie who now works for

one of your suppliers, is a phone call away. Theseare the people with whom you can discuss yourlatest developments in the field and troubleshooteach others most difficult design challenges". -Wenger (1998)


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CoP Vs Community of Interests

Community of Practices are different from Community of

Interests (CoI)

A community of practice is different from a community ofinterest. or geographical community, neither of which imp l ies ashared pract ice.

A community of practice is different from a team in that sharedlearning and interest of its community members are whatkeep it together. It is def ined by know ledge and rather thanby task, and exists because part ic ipat ion has value tomembers.

A community of practiceslifecycle is determined by the value itprovides to members, not by an institutional schedule."Wenger (1998)

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You Are Hired - Part II

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