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NewsOK Q&A: IP assignment agreement is key to invention ownership

Phillips Murrah Patent Attorney Cody J. Cooper

Cody Cooper is a Patent Attorney in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property, patent, trademark and copyright matters. His practice also includes commercial litigation.

In this article, Oklahoma City Patent Attorney Cody J. Cooper discusses the rights inventors have when inventing under the employment of someone else.

Q: When an employee invents something during the course of his or her employment, who owns the invention?

A: The employee owns the invention. Inventors’ exclusive right to their inventions is specifically written into the United States Constitution and, as such, courts have generally interpreted ownership of inventions to favor individuals, except in very narrow circumstances.

Q: How can an employer assure ownership when an employee conceives of an invention on the job?

A: The employer must have employees sign an intellectual property (IP) assignment agreement. Because the general rule is that an inventor owns the rights, courts strictly interpret IP assignment agreements. Recent case law has instructed employers that how you draft the assignment agreement is equally as important as having an agreement in the first place. In fact, the Federal Circuit recently determined, in Advance Video Technologies LLC v. HTC Corporation Inc., that an IP assignment must include language saying the employee “assigns” — present tense, not future tense — their employer all IP rights. The small difference in language had a tremendous impact on the employer’s ability to sue another company for patent infringement.

Q: Should IP assignment agreements only be used by businesses in manufacturing, research or product development?

A: No. I would suggest any company consider having its employees sign an IP assignment agreement if the company expects employees to create work or inventions to which the company would expect to have rights and expects to protect it through application for apply for a trademark, patent, copyright or other appropriate protection to keep others from using it without permission.

Q: What are some other employer considerations regarding IP assignment agreements?

A: Make sure that your employees sign IP assignments before they begin working for you, and make sure that you consult an attorney on the drafting of the IP assignment to ensure that it complies with current law and effectively assigns the IP rights you are seeking to protect.

Q: What if an employer has employees who’ve already created inventions that the employer presumed the company owned but doesn’t have an IP assignment in place? Can the company enter into an IP assignment agreement retroactively?

A: If this is the case, the invention is owned by the employee, and the employer likely has no rights to the invention. Nevertheless, the employer and employee can still enter into a IP assignment agreement, but there must be some sort of consideration (exchange in value) passed between the parties. The law makes clear that it is not enough for the employer to say that the consideration the employee is receiving is that they get to keep their job — there must be something more passing to the employee for their assignment of their invention (i.e. money, stock, etc.).

 

Published: 1/30/19; by Paula Burkes
Original article: https://newsok.com/article/5621521/qa-with-cody-j-cooper-ip-assignment-agreement-is-key-to-invention-ownership

 

What’s in a name? Tremendous value

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on January 4, 2018.


Cody Cooper is a Patent Attorney in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property, patent, trademark and copyright matters. His practice also includes commercial litigation.

By Phillips Murrah Attorney Cody J. Cooper

The holiday season is coming to an end, and most people have opened their Xboxes and Legos, eaten some HoneyBaked Ham, braved the cold in their North Face jackets and thrown away holiday trash in Hefty trash bags.

With a glut of advertising during the holidays, the power of brand recognition is obvious, and successful companies recognize the influence their names have on consumer behavior. This makes protecting a company’s trademark, typically the company’s name, critical, especially as their market exposure and customer base grows.

The trademark associated with the goods and services of a company is commonly one of its most valuable assets. For example, the ubiquitous Coca-Cola Co., the fifth most valuable brand in 2017, has a market capitalization (total value of all outstanding stock) of $195 billion and the Coca-Cola name, alone, is worth $56.4 billion, which accounts for almost 30 percent of its value. To round out the top five corporate monikers, Apple takes the top spot with its name being worth $170 billion, followed by Google ($101.8B), Microsoft ($87B) and Facebook ($73.5B).

The same legal considerations of brand value for large companies applies equally for many smaller, growing companies and organizations. Because consumers instantly associate an entity’s name with its good or services, protecting the name with a trademark has tremendous value.

Generally, a business has common law rights to exclude others from using a trademark that is confusingly similar to its own trademark. The scope of this right greatly expands or contracts based on whether a trademark has been registered, and the level at which the mark is registered. There are two avenues to take when looking to protect a company’s trademark: file for a state trademark or a federal mark.

State trademarks are typically cheaper, faster and easier to obtain, yet they also afford far less protection. Conversely, federal marks have a more rigorous application process, cost more, and take longer, but they afford the greatest amount of protection since they provide protection throughout the United States and supersede state trademarks.

Smart company leaders spend significant time and money building the value of their company and brand, and they realize the importance of protecting the company’s most valuable consumer-facing asset by securing a trademark.

Cody J. Cooper is a patent attorney with the Oklahoma City law firm of Phillips Murrah.

Phillips Murrah Attorney Cody Cooper earns patent license

Cody Cooper is an associate in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property, patent, trademark and copyright matters. His practice also includes commercial litigation.

Merging work life with personal interests is a tough feat to accomplish, but in 2015, Phillips Murrah Attorney Cody J. Cooper set in motion a two-year journey to make that a reality.

“I’ve always enjoyed science and looking at things to figure out how they work, and Intellectual Property is a great fit for that interest,” Cody said. “I like the idea of working hand-in-hand with inventors to help them along with the process, with the end goal of getting them a patent on their unique idea.

Intellectual Property is a perfect blend of law, science and entrepreneurship that perfectly aligns with my personal interests and passions.”

With this motivation in mind, Cody began the process of obtaining a license to become an official Patent Attorney.

“Everyone on the planet has had an idea at some point in their lives,” said Martin G. Ozinga, Of Counsel Attorney and Chair of the Firm’s Intellectual Property Practice Group. “There aren’t many practicing Patent Attorneys in Oklahoma, but there are plenty of folks who need one.”

Aside from personal gain, the designation of a Patent Attorney offers credibility and security for clients which isn’t afforded to those seeking patents on their own accord. However, the process for obtaining a patent license can be demanding, especially with a full-time legal workload.

In order to sit for the Patent Bar, candidates must have a scientific or technological background, typically in the form of an undergraduate degree in a science or engineering field, in addition to securing a law degree.

“I had accumulated undergraduate credits in chemical engineering, but I was short by 13 hours,” Cody said. “When I knew I wanted to pursue getting my patent license, I looked at the University of Central Oklahoma’s enrollment requirements and their course catalog to find classes that I could attend in the evenings after work.”

Because it had been several years since he took engineering courses in college, Cody tried to find a line of classes that qualified but from which he could start at the beginning. The best courses that worked for this were biology courses, he said.

Over the course of three semesters, Cody took four evening biology classes at UCO: biology, biology lab, microbiology and human anatomy with cadavers.

“During school, I had class two to three nights per week, and classes lasted two to three hours each night,” he said. “I also had homework, quizzes, tests and finals as part of these courses.”

Much like the standard college experience, he was in class with undergraduate students and had homework, regular tests and finals.

“When I was completing my third semester, I went to San Francisco and took a Patent Bar study course. The course was essentially a full-week course put on by the Practising Law Institute,” Cody said. “After I finished my last semester, I applied to the United States Patent and Trademark Office to take the Patent Bar and proceeded to take the exam.”

Cody spent a several hours most nights and weekends studying for the two months leading up to taking the Patent Bar. He passed on his first attempt, and as of July 2017 has officially obtained his Patent License and the ability to practice as a Patent Attorney.

Learn more about Phillips Murrah’s Patent, Copyright and Trademark Practice Group by visiting the Intellectual Property Practice Area page here.

Overcome obstacles to profiting from expiring patents

patent-stamp

Patent maintenance fees have led patent holders to abandon an increasing number of patents.

The recent increases in patent maintenance fees has led many patent holders to abandon an increasing number of patents because the cost of maintaining a large portfolio is becoming too high. Selling patents that are about to lapse is one option, however, doing so presents two primary concerns: lack of investment in expiring patents and litigation pricing, according to News 9.

U.S. patents must be renewed three times during their lifetime. Maintenance fees are due after the issue date of the patent every 3.5 years, 7.5 years and 11.5 years. Maintenance fees escalate at each renewal portion. Small entities are entitled to a 50 percent discount on maintenance fees and micro entities receive 75 percent off patent maintenance. These fees can be paid up to six months prior to their due date. Patents are not abandoned until a six-month grace period ends at years 4, 8 and 12 respectively. Patents can be renewed during their grace period for $160.

Most buyers will not pay a significant price for patents that are nearing their expiration date, for the same reason we are less likely to buy products in the store that are close to their “sell by” date. Also, in many circumstances, buyers may decide to enforce the patent, sometimes resulting in costs to the patent holder, making selling a patent for a lower five figure price undesirable.

To overcome transaction costs of selling patents for a low sale price, the patent holder must lower the transaction cost. This can be done by using the same negotiated patent purchase agreement for repeated transactions. Once the first transaction is completed, the patent holder and buyer can use the same patent purchase agreement for future transactions.

The second concern is primarily driven by the sale price of the patent. Most companies would be comfortable in selling the patent if the sale price of the patent significantly exceeded the cost of responding to discovery. In many respects, discovery issues in patent litigation are no different from discovery issues that arise in all other cases.

While it may not be realistic to sell a single patent nearing expiration for significant revenue, selling groups of these patents can generate significant revenues and responding to discovery for those few patents is manageable.

By selling groups of patents to the same buyer throughout the year, a patent owner can virtually eliminate the transaction costs while generating six figure annual revenue from patent assets that would otherwise soon become worthless.