The case is Advanced Video Tech. LLC v. HTC Corp. (Fed. Cir. Jan. 11, 2018), available here, and involved U.S. Patent No. 5,781,788 (“the ‘788 patent”). The only issue on appeal was whether a co-inventor of the patent had transferred her ownership interest under the terms of an employment agreement, which read as follows:
I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and will assign to the Company all my right, title, and interest in and to any and all inventions, original works of authorship, developments, improvements or trade secrets which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company.
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I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have infringement [sic] of any patents, copyrights, or mask work rights resulting from any such application assigned hereunder to the Company.
Advanced Video asserted that “will hold in trust” created an immediate trust in favor of Advanced Video’s predecessor in interest. The district court noted, however, that this language weakens the argument that an immediate assignment occurred because the inventor could not hold in trust and immediately assign away at the same time.
The Federal Circuit noted that even if the employment agreement did place the inventor’s interest in the invention into an immediate trust, nothing in the agreement indicates that her interest ever transferred out of that trust.
Advanced Video also argued that the quitclaim language resulted in an assignment because “assigned hereunder” should be read as “assignable hereunder” and the rights the inventor “will assign” were quitclaimed immediately under the employment agreement.
The Federal Circuit disagreed, pointing out that because no patent rights were ever assigned by the language of the employment agreement, the quitclaim provision had no application.
Judge Newman dissented, arguing that the invention of the ‘788 patent belonged to Advanced Video by virtue of the employment agreement. Judge Newman pointed out that the PTO accepted the employment agreement as showing the employer’s ownership, the inventor did not object to the procedures in the PTO, and the face of the patent lists the employer as “Assignee.” Nor did the inventor object, or ever assert any ownership interest in the ’788 Patent.
This case demonstrates once again the importance of precise language in your employment agreements because “do hereby assign” (which effects a present assignment of future inventions) gives a very different result from “will assign” (which only creates a promise to assign). If an employee later leaves, cannot be found, or refuses to sign a later assignment document, your only recourse may be to rely on the language of your employment agreement.
