104 Iowa L. Rev. 447 (2018)

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Abstract

Many companies rely on the use of assignment clauses to grant themselves ownership of intellectual property created by their employees. Many of these contracts target patent ownership rights, are overly broad, and prevent employee–inventors from receiving fair value for the work they provide to their employers. When the clause collects patent ownership rights, these contracts reduce the motivation to innovate and restrict the mobility of employees. As a result, many scholars challenge the principle of assigning away intellectual property in initial employment contracts. Only some of this criticism is warranted because businesses may validly claim some of the inventions created by their employee–inventors. Many businesses hire with the intent to innovate a specific invention, and basic principles of agency law and shop right doctrines would indicate that the invention belongs to the business. Without that invention, many businesses may struggle to survive and raise revenue. Because economic realities have changed since the Framers wrote the Patent Clause into the Constitution and Congress initially passed the Patent Act, both the employer and the employee–inventor share rights to many inventions, possessing legal rights to the invention and personhood rights to the invention, respectively. To resolve this conflict, corporations should modify existing contracting practice to rely on right of preemption provisions, courts of all levels should consistently interpret contract law in light of patent law terms of art when patent ownership suits reach them, and Congress should authorize the ability to terminate patent rights assignments to empower employee–inventors and promote more equitable consideration and compensation for inventions created by their employees.