Sample Patent Agreement
Innovators Patent Agreement
The Innovators Patent Agreement (IPA) is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from a company to its employees that patents can only be used for defensive purposes. The company will not use the patents in offensive litigation without the permission of the inventors. This control flows with the patents, so if the company sells the patents to others, the assignee can only use the patents as the inventor intended.
DISCLAIMER: The IPA and the supporting materials are available for informational purposes only and are NOT for the purpose of providing legal advice. You should contact a lawyer if you want to get advice with respect to any particular aspect of the IPA or if you want to implement it.
You should have a standard employee agreement that deals with inventions and that includes a provision requiring that employees assign their inventions to the company. You can include the following sentence in your employee agreement dealing with invention assignments:
The Company and I agree, notwithstanding any other provision of this agreement, that any invention to be assigned by me to the Company under this agreement shall be assigned in accordance with the Innovator’s Patent Agreement (“IPA”) and, if a patent application is filed on any invention, that a copy of the executed IPA shall be recorded with the assignment branch of the patent office where the patent application is filed.
Whenever you file a patent application, it is typical to have the inventor sign a patent assignment agreement which specifically assigns the patent application to the company. Instead of using whatever form your patent agent uses, use the IPA instead.
The IPA should be signed by both the inventor and a corporate representative.
After the IPA is signed, you should make sure that the document is recorded with the assignment branch of the Patent Office. This puts the whole world on notice that this patent application has been assigned in accordance with the provisions of the IPA.
Q. How does the IPA work?
A. The IPA includes a commitment from your company to your employees that their patents will be used for defensive purposes and will not be used in offensive litigation without their permission. What’s more, this control flows with the patents, so if the patents were sold to others, they could only use them as the inventor intended.
Q: What does “defensive purposes” mean?
A: Defensive purposes means that you can defend yourself should another party try to initiate patent litigation against you or your customers or users. Under the IPA, it also means that you can use these patents against anyone who has sued others offensively in the past (up to ten years).
Q: How is this actually in the company’s best interest, given how litigious the patent area is?
A: The IPA strikes a balance here. Your company keeps the capability to use patents defensively if someone sues you, or you have the option of pursuing legal action if you have the consent of the inventor. You do not keep the capability to seek patent licensing fees from others who have not used patents offensively. Nor can you sell your patents to someone who will seek patent licensing fees from them.
Q: So then why bother obtaining patents at all, if you’re going to let anyone use your technology?
A: Under the IPA, the principal value of patents is defensive. Patents are still important because you are reserving the ability to defend yourself with them while empowering your engineers by giving them a greater stake in the patent process.
Q: Doesn’t the IPA destroy corporate value?
A: We recommend that you discuss the IPA with your board of directors to understand the impact of adopting the IPA on corporate value. Whether the IPA may be right for your organization depends on a lot of factors, including whether your business model is based on generating revenue from patent licensing fees or whether it is based on competing by innovating and providing the best product or service.
Q: What does this IPA mean for me, as an engineer/designer?
A: The IPA is a new way to do patent assignment that keeps some control in the hands of engineers and designers. When you assign a patent to an entity using the IPA, your patent can only be used for defensive purposes and will not be used in offensive litigation without your permission. With the IPA, you can be assured that your patents will be used only as a shield rather than as a weapon.
Q: What stops a company from simply going back on its promises to me under the IPA?
A: With the IPA, the inventors receive the ability to license anyone who has been improperly sued in violation of the IPA. So, even if the company changes its mind, you have the ability to hold them accountable under the IPA. Even if a patent monetizer purchases the patent and tries to argue that they are not bound by the restrictions of the IPA, you can protect anyone sued by the patent monetizers by licensing them in accordance with the IPA. We believe this license will survive any transfer of the patents.
Q: What if I work for a company that doesn’t use the IPA?
A: Is your company saying that it is filing the patent for defensive purposes? If it is, ask your company representative whether they are willing to put that in writing by using the IPA. If they are unwilling to do put their promise in writing, you may want to ask yourself why (and consider working someplace else #jointheflock).
Note that even if the company issues a pledge that the patent will not be asserted offensively, that pledge may not be enforceable if there is a change in management or if the company goes through bankruptcy. Even if you work at a company that promises you that they will not use patents offensively, this may not prevent the company from later being liquidated so that the patents end up in the hands of entities that seek to monetize them.
Q: Why should I encourage the startups that I invest in to use the IPA?
A: First, the IPA affords flexibility for a small startup. The IPA allows unrestricted use of the patents if the inventors consent. So, a small startup can still use its IPA patents offensively if the inventors (who are likely to be founders of the startup) agree that it is strategically necessary for the sake of the startup.
Second, the IPA limits the negative consequences if the startup fails. Without the IPA, when a startup fails, the patents survive to become fodder for patent monetizers. These patent monetizers never commercialize the inventions. Rather, they feed off of these patents and can create a patent thicket for future startups. The IPA restricts such patent monetizers. Patents under the IPA cannot be used offensively against future generations of startups.
Q: Doesn’t the IPA reduce the value of the startup?
A: We recommend that you discuss the IPA with your board of directors to understand the impact of adopting the IPA on your value. Whether the IPA may be right for your organization depends on a lot of factors, including whether your business model is based on generating revenue from patent licensing fees or whether it is based on competing by innovating and providing the best product or service. Depending on the nature of your business and your long term goals, the IPA can provide significant benefits for your company.
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“Innovators Patent Agreement” © 2012 Twitter, Inc, used under a Creative Commons Attribution Unported license: http://creativecommons.org/licenses/by/3.0/