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Vedder Thinking | Articles Spousal Rights to Inventions: A Latent Threat to Corporate Patent Portfolios

Seton Hall Law Review


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In-house counsel gets the pleasure of working more intimately with their clients than would an attorney working at a law firm. This pleasure manifests itself in many ways, but one of the best ways is when somebody in the office stops by for a chat that quickly turns to a request for free legal advice. In-house counsel could (and should) explain to that person what it means to have the corporation, rather than an individual, as the client, and that the company does not pay its in-house counsel to be a free legal clinic to its employees. Still, as in-house counsel, and in particular, as in-house intellectual property counsel, it is not unheard of for a young marketing manager to knock on the door and eventually ask if the in-house counsel could represent her in her divorce.

It is easy for in-house counsel to laugh off such a request (sympathetically, of course), especially in-house intellectual property counsel. But what if intellectual property counsel should pay closer attention to family law? What if the intersection of intellectual property law, specifically patent law, and family law creates an odd, unresolved conundrum that jeopardizes valuable company assets? What if—perish the thought—in-house intellectual property counsel actually needs to understand the employees’ rights in marital property?

It might just be so.

Consider this. Under U.S. patent law, ownership of a patent automatically vests, as personal property, in the individual inventor. Many, if not most, inventors are employees who, under some written obligation (such as a routine employment agreement), assign their ownership rights to the inventions created as part of their jobs to their employers. At the same time, however, property acquired by a married individual (in most, if not all states) is considered marital or community property of the married couple. In that case, then, when an employee invents something and acquires an interest in a patent (which acquisition occurs automatically upon invention under U.S. law), doesn’t that patent first become marital property of the couple before the employee assigns the employee’s interest to the employer? In other words, how does an employer who receives an assignment from the employee alone of only the employee’s interest avoid ending up owning the patent jointly with the spouse who has his or her own undivided interest in the marital property?

In this article, an intellectual property lawyer and a family lawyer will explore this quirk in the law of patent ownership which creates serious unresolved ownership issues for corporate patent assets. This article will address the background of patent ownership from a federal patent law perspective, including how ownership of a patent is acquired and conveyed, and the peculiar but important difference between “legal” title and “equitable” title to a patent. This article will then discuss concepts of marital property, including how property acquired by one spouse during a marriage can become jointly held marital property. This article will address whether a spouse’s ownership interest in marital property acquired by the other spouse (such as a patent invented by that spouse) is “legal” or “equitable” ownership. This article will then address whether, if a patent is marital property, a married inventor’s conveyance of his or her interest in a patent to his or her employer is sufficient to convey the entire interest in the marital property, or whether the company employer has received less title than it thought. Having sufficiently stirred the pot, this article will attempt to unravel the emergent problem and propose workable solutions.

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Shulman, Daniel & Upchurch, Angela (2020) "Spousal Rights to Inventions: A Latent Threat to Corporate Patent Portfolios," Seton Hall Law Review: Vol. 50: Iss.1, Article 1. 
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Daniel H. Shulman