SANCTITY OF MIND: Who owns an idea when an employee invents--and who should?

• Author: Andra, Jacob
• Position: Technology

In one of the most high-profile intellectual property disputes in recent memory, toymaker Mattel sued MGA Entertainment in what has come to be known as the "Bratz-vs-Barbies" battle. Mattel alleged that Bratz dolls "were conceived by a designer while he was employed by Mattel," according to a 2015 Telegraph article. The legal war raged for eight years.

Mattel is not alone in prosecuting former employees. Or their new employers. In fact, according to a New York Times report--"My Ideas, My Boss's Property," by Orly Lobel--"increasingly it is corporations, not people, who own inventions." And, if the inventions prove valuable, the former employer is more ready to litigate than ever before.

The full force of the law

In intellectual property disputes between employer and (former or current) employee, the employer enjoys the clear legal advantage. "This disparity is about to become even more pronounced," says Lobel, who teaches law at UC San Diego. The 2013 America Invents Act changed the U.S. patent system "from a first-to-invent to a first-to-file rule" that disproportionately handicapped "individual inventors, who usually lack the funding to speed up filing."

In addition to having the first-to-file advantage, corporations deploy a variety of legal safeguards. "Companies typically require employees to sign an agreement upon hiring (often referred to as a Proprietary Information and Invention Assignment Agreement, or PIIA)," says Dan Stevenson. As general counsel for software company Domo, Inc., Stevenson deals with his share of intellectual property issues. Implementing the PIIA, he explains, dramatically increases a company's chance of winning a potential intellectual property lawsuit.

Whose IP? Considering the factors

In addition to the PIIA, Stevenson lists other factors that determine whether the invention was an "employment invention" as defined by Utah Code [section]34-39-3.

* Was the invention related to the employee's duties or to the function of the company for which she worked? If so, she has very little chance of prevailing.

* Did the employee invent during time for which he was being paid? Did he use any of his employer's facilities, tools or equipment? Bad news (or good news--for the corporation). Conceivably, use of a work laptop, even in the confines of one's own home, could nullify any claim to the invention.

* Relating to the previous points: Does the invention fall into the same industrial category or business usage as the...