Inventions agreement: Overview, definition, and example
What is an inventions agreement?
An inventions agreement is a legal contract between an employer and an employee, or between parties in a business relationship, that specifies the ownership and rights to any inventions or intellectual property created during the course of their work or collaboration. This type of agreement outlines who owns the rights to the inventions, whether the creator will receive compensation, and any obligations regarding the disclosure of inventions made during employment or the partnership. It is particularly common in industries such as technology, research and development, and entertainment, where intellectual property is a key asset.
For example, a company might require its employees to sign an inventions agreement to ensure that any inventions or products developed while working for the company are owned by the company, not the individual employee.
Why is an inventions agreement important?
An inventions agreement is important because it clearly defines the rights and responsibilities related to the ownership of inventions or intellectual property. Without such an agreement, disputes can arise over who owns an invention or idea, particularly if it is developed during the course of employment or a business relationship. The agreement ensures that both parties are clear about ownership, compensation, and how any inventions will be used or commercialized.
For businesses, this agreement helps protect valuable intellectual property and ensures that inventions developed by employees or collaborators are not claimed by others. For employees or collaborators, the agreement outlines their rights to compensation or recognition for their work and clarifies whether they will have rights to the invention once it is developed.
Understanding inventions agreement through an example
Imagine a software company hires a developer to create a new application. As part of the employment contract, the developer is required to sign an inventions agreement that states any software, code, or related inventions created during their employment will be the property of the company. This prevents the developer from claiming ownership of the app they develop during their employment, ensuring the company retains the rights to the product.
In another example, two entrepreneurs enter into a partnership to create a new product. They sign an inventions agreement that clearly states that any inventions or patents related to the product will be jointly owned by both parties. This ensures that both entrepreneurs share in the benefits and ownership of the intellectual property.
An example of an inventions agreement clause in a contract
Here’s how an inventions agreement clause might appear in an employment or partnership contract:
“The Employee agrees that any inventions, discoveries, improvements, or creations made during the course of their employment with the Company, whether individually or jointly with others, that relate to the Company’s business or activities, shall be the exclusive property of the Company. The Employee agrees to promptly disclose any such inventions to the Company and assign all rights, title, and interest in these inventions to the Company.”
Conclusion
An inventions agreement is a crucial legal document that defines the ownership and rights to inventions and intellectual property created during employment or business collaborations. It protects the interests of businesses by ensuring they retain ownership of inventions, and it provides clarity for employees or collaborators about their rights and any compensation they may be entitled to. Clear terms in an inventions agreement help avoid disputes and ensure both parties are on the same page regarding the creation, use, and ownership of intellectual property.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.