Invention Assignment and Work for Hire Agreements
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One of the provisions you may see in your employment agreement will address intellectual property and assignment of inventions. It may include in the caption or in the clause the phrase "work for hire." It may also include the term "invention assignment."
Though these are often bundled together in one section, they protect different interests under the copyright and patent laws. It is important for you to understand what these terms mean and how they work before signing the agreement. |
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Works Made for Hire
This part of the contract addresses ownership of copyright to certain kinds of work created by the employee. Under the copyright law, if you create something in the scope of an employment relationship, the employer retains ownership of the rights to that creation. If the work is created by an independent contractor, the employer does not own the rights without a written agreement signed by the contractor.
If you are an employee, this provision is somewhat unnecessary because the employer already has intellectual property rights. There are a few reasons many employers still include this language.
First, the law only provides the employer rights to copyrightable works. Copyright law protects "original work of authorship which is fixed in a tangible medium of expression." Examples include artwork, articles or blogs, original music, photographs or videos, training manuals or instructions.
Copyright does not protect the idea itself, only the tangible documentation of the idea. The idea itself may be protected under the law of trade secrets. It may be something that is eventually the subject of a patent application. If the employer wants to ensure that all of these things are its exclusive property, a work for hire provision is necessary.
Second, there may be ambiguity about what is within the scope of employment for purposes of copyright ownership. A work for hire provision gives the employer the opportunity to define and clarify what is within its scope.
If you are an employee, this provision is somewhat unnecessary because the employer already has intellectual property rights. There are a few reasons many employers still include this language.
First, the law only provides the employer rights to copyrightable works. Copyright law protects "original work of authorship which is fixed in a tangible medium of expression." Examples include artwork, articles or blogs, original music, photographs or videos, training manuals or instructions.
Copyright does not protect the idea itself, only the tangible documentation of the idea. The idea itself may be protected under the law of trade secrets. It may be something that is eventually the subject of a patent application. If the employer wants to ensure that all of these things are its exclusive property, a work for hire provision is necessary.
Second, there may be ambiguity about what is within the scope of employment for purposes of copyright ownership. A work for hire provision gives the employer the opportunity to define and clarify what is within its scope.
Invention Assignment
Often these provisions will include language stating that you assign any current or future inventions to the employer. Employers include this language for two main reasons.
The first is to maintain ownership over anything the company might consider to be a trade secret or confidential information of the employer.
The second is to make clear that if something created by an employee is later the subject of a patent application, the employer has retained the rights to that idea.
These provisions are often written very broadly, encompassing even those things an employee might have created before beginning employment. For this reason, there is usually an opportunity for the employee to disclose any prior inventions or works so that he or she can maintain ownership.
If you are in a technical field and have actual patents or patent applications, it is not difficult to identify these. For people in a creative field who may have a wide body of work product, this may be more difficult.
The first is to maintain ownership over anything the company might consider to be a trade secret or confidential information of the employer.
The second is to make clear that if something created by an employee is later the subject of a patent application, the employer has retained the rights to that idea.
These provisions are often written very broadly, encompassing even those things an employee might have created before beginning employment. For this reason, there is usually an opportunity for the employee to disclose any prior inventions or works so that he or she can maintain ownership.
If you are in a technical field and have actual patents or patent applications, it is not difficult to identify these. For people in a creative field who may have a wide body of work product, this may be more difficult.
Negotiating the Invention Assignment Agreement
If you have the opportunity to negotiate the terms of your employment agreement, there are a few things you should consider about this provision.
First, are you engaged in any activity outside of work that involves ideas or creation of tangible work product? If so, you should read the provision carefully and make sure it only covers ideas and work prepared in the scope of employment and/or using the employer's resources. Otherwise, that novel you are working on over the weekends or any other unrelated projects could fall within the scope of the agreement.
Second, do you have any preexisting work that might be subject to the invention assignment provision? If it is too difficult to identify everything that might meet this definition, you may want to ask to delete the part that brings in prior work product.
Third, are you in a field where it is important to you professionally to maintain ownership and control over your own intellectual property? For some jobs, this provision poses little risk to the employee. For others it may be vital to retain intellectual property rights.
For example, in academia or certain technical fields it may be important for you to be able to publish the results of your work. These publications may be an important part of your own resume or curriculum vitae. In that situation, you will want to review the terms more carefully and seek legal advice before agreeing to them.
Sometimes employers will not negotiate these provisions in an agreement. This is especially true of larger employers who do not want to keep track of multiple versions of the same agreement for many employees.
Other times, however, the intellectual property and work for hire provisions are part of a boilerplate contract that does not necessarily reflect what is truly important to the employer. If you have concerns about the provisions, it is always worth asking if there is room to make changes to fit your specific situation.
First, are you engaged in any activity outside of work that involves ideas or creation of tangible work product? If so, you should read the provision carefully and make sure it only covers ideas and work prepared in the scope of employment and/or using the employer's resources. Otherwise, that novel you are working on over the weekends or any other unrelated projects could fall within the scope of the agreement.
Second, do you have any preexisting work that might be subject to the invention assignment provision? If it is too difficult to identify everything that might meet this definition, you may want to ask to delete the part that brings in prior work product.
Third, are you in a field where it is important to you professionally to maintain ownership and control over your own intellectual property? For some jobs, this provision poses little risk to the employee. For others it may be vital to retain intellectual property rights.
For example, in academia or certain technical fields it may be important for you to be able to publish the results of your work. These publications may be an important part of your own resume or curriculum vitae. In that situation, you will want to review the terms more carefully and seek legal advice before agreeing to them.
Sometimes employers will not negotiate these provisions in an agreement. This is especially true of larger employers who do not want to keep track of multiple versions of the same agreement for many employees.
Other times, however, the intellectual property and work for hire provisions are part of a boilerplate contract that does not necessarily reflect what is truly important to the employer. If you have concerns about the provisions, it is always worth asking if there is room to make changes to fit your specific situation.
Special Considerations for Independent Contractors and Freelancers
As we have said, an employer cannot retain copyright ownership without a written agreement if the person creating the work is an independent contractor.
In addition to that, the permissible scope of a work for hire agreement is narrower with an independent contractor. The provision can only apply to certain kinds of creative work. It also cannot cover works created prior to the engagement. For example, if a company wants to use something from your existing portfolio, that cannot be considered a work made for hire.
The company must also "specifically commission" the work. This means the company should not able to broadly cover all things done within the scope of your work, especially if you perform multiple roles for the company.
This analysis is further complicated by the fact that many independent contractors could be deemed employees under Massachusetts law. If, for example, the work you perform for the company is part of its core business, you may actually be an employee. How that affects your work for hire agreement is very fact-dependent. You should be careful, however, that your interests are protected under the agreement even if the law later deems you to be an employee.
There are also important business considerations for the independent contractor in signing such an agreement.
One example is in the graphic design field. The business who pays for the design of a logo or other branding material has good reason to want to own and control those images.
The designer, however, may want to use those materials as part of their portfolio for marketing purposes. The designer may also want to protect themselves against the business taking their design and hiring a competitor to build upon it. In that situation the designer may want to negotiate a different agreement that gives the business the license to use the design but allows the designer to retain ownership.
In addition to that, the permissible scope of a work for hire agreement is narrower with an independent contractor. The provision can only apply to certain kinds of creative work. It also cannot cover works created prior to the engagement. For example, if a company wants to use something from your existing portfolio, that cannot be considered a work made for hire.
The company must also "specifically commission" the work. This means the company should not able to broadly cover all things done within the scope of your work, especially if you perform multiple roles for the company.
This analysis is further complicated by the fact that many independent contractors could be deemed employees under Massachusetts law. If, for example, the work you perform for the company is part of its core business, you may actually be an employee. How that affects your work for hire agreement is very fact-dependent. You should be careful, however, that your interests are protected under the agreement even if the law later deems you to be an employee.
There are also important business considerations for the independent contractor in signing such an agreement.
One example is in the graphic design field. The business who pays for the design of a logo or other branding material has good reason to want to own and control those images.
The designer, however, may want to use those materials as part of their portfolio for marketing purposes. The designer may also want to protect themselves against the business taking their design and hiring a competitor to build upon it. In that situation the designer may want to negotiate a different agreement that gives the business the license to use the design but allows the designer to retain ownership.
Questions to Ask an Employment Lawyer Before Signing an Invention Assignment Agreement
Before you sign a work for hire or invention assignment agreement, it is a good idea to have it reviewed by a lawyer. Some questions you should ask include:
- How broadly is the scope of employment defined and does it cover your outside independent projects?
- If you are an independent contractor, how likely is it that the law will consider you an employee for purposes of the agreement?
- Does the agreement allow you to use your own work for portfolio or marketing purposes?
- Does the agreement capture your work prior to employment?
How Our Employment Lawyers Can Help
We can help you review your employment agreement to make sure you are making an informed decision and protecting your interests. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
