Employers often assume that anything their employees invent while on the job belongs to the company. However, the general rule is that the employee retains ownership over patent rights resulting from the invention, even if the invention relates to the employer's product line. This is the case even if the invention was conceived, reduced to practice (via creation of a prototype, for example) or disclosed in a patent application during the course of employment. Mainland Industries, Inc. v Timberland Machines and Engineering Corp., 58 Or.App. 585, 589 (Or. App. 1982). An exception to this general rule is where the employee is hired specifically to invent something or solve a particular problem, in which case the law implies an agreement that the employee's inventions belong to the employer. White's Electronics, Inc. v. Teknetics, Inc., 67 Or. App. 63, 67 (Or App. 1984); Banks v. Unisys Corp., 228 F.3d 1357, 1359 (Fed. Cir. 2000).
In order to avoid ambiguity over who is or isn't “hired to invent” and to capture as much intellectual property as possible, employers in Oregon are wise to contract for the assignment of future inventions and patent rights as a condition of employment or promotion. Unlike in Washington and California, there are no statutory protections for Oregon employees subject to such agreements, such as where the invention was developed entirely on the employee's own time, using their own resources and which does not relate to the employer's business. See RCW 49.44.140 and Cal. Labor Code § 2870.
The invention assignment language can be included with other provisions relating to confidentiality, non-competition and non-solicitation obligations. Moreover, the assignment language can go beyond inventions and require assignment of all intellectual property, including all trade secrets, copyrights, trademarks (and related goodwill), writings, works of authorship, technology, inventions, conceptions, discoveries, ideas and other work product of any nature whatsoever, often referred to globally as “proprietary rights.” To avoid enforceability issues due to overreaching, however, Oregon employers should require assignment only for those proprietary rights relating to the employer's business.
Furthermore, in order to capture this intellectual property as it is created, rather than after the employee has left, the assignment agreement should require the employee to timely disclose any and all inventions, discoveries, improvements or ideas in any way relating to the business. And the provision should require that the employee, during his or her employment and thereafter, sign and deliver to the employer any documents that may be required to vest ownership in the employer. Moreover, the language should require that the employee cooperate both during and after employment, and without additional compensation, in the preparation and prosecution of any patent, trademark or copyright application arising out of the proprietary rights and in the enforcement of such rights through litigation or otherwise. Finally, the assignment agreement should include a “trailer clause” requiring the employee to assign any ideas and inventions conceived for a period of time after the employment ends. This provision prevents employees from withholding an invention until just after they leave the company in order to obtain wrongful ownership of the invention. To be enforceable, it's best to make it for no longer than 18 months which is the maximum amount of time a non-competition agreement is valid in Oregon.
In sum, Oregon employers can and should take concrete steps to avoid the loss of their valuable IP assets by requiring employees to execute written proprietary rights assignment agreements prior to employment or upon bona fide promotions of their employees. These written agreements can contain protections for the employers that may not be available under common law and that add value to the balance sheet in the form of intellectual property assets.