In a recent case, Omni MedSci, Inc. v. Apple Inc., the Federal Circuit held that the language the inventor agreed to via his employment agreement “did not effectuate a present automatic assignment of [his] patent rights.”
The following are the facts of this case.
When Dr. Islam joined the University of Michigan (UM) faculty, he executed an employment agreement that included the provision stating the conditions under which patent rights shall be the property of the University.
However, a provisional application not directly related to Dr. Islam’s work—but indirectly supported by UM—remained property of UM. Regardless, Dr. Islam assigned this work to Omni MedSci and the assignment was recorded in the USPTO.
Omni MedSci filed a patent infringement suit against Apple, asserting its rights under the assignment executed by Dr. Islam.
The Federal Circuit framed the issue as “whether paragraph 1 … automatically and presently assigned legal title of Dr. Islam’s inventions to UM.” In that context, the majority decision explains:
A patent assignment clause may presently assign a to-be-issued patent automatically—in which case no further acts to effectuate the assignment are necessary—or may merely promise to assign the patent in the future.
“[T]he language of paragraph 1 does not use present tense words of execution,” such as “assigns,” “hereby assigns,” and “does hereby assign.”
The majority noted that the cited decisions were interpreting statutory language, not language in a contract between two private parties.
The majority also noted that the decision was not based on “magic words,” but rather on “[t]he absence of an active verbal expression of present execution,” which the majority characterized as a “substantive indication that a present automatic assignment was not intended.”
This decision highlights the importance of due diligence looking behind recorded assignments for potential ownership issues. In addition, this decision highlights the importance for an employer to review the language of their employment agreements whenever a new patent application is filed.
Please contact me at firstname.lastname@example.org with questions or comments.
Silvia Salvadori, PhD