Business Law Utility Patents and Employee Contracts Term Paper

Excerpt from Term Paper :

Business Law

Utility Patents and Employee Contracts

Since the before the beginning of the industrial revolution, the United States Patent and Trademark Office has been recording and protecting the ideas and gadgets of inventors. But, what exactly is a patent and what laws govern the patent process? Who can file for a patent and what is the process for applying? What benefit are received if a patent is in place? Does a patent cost money and who enforces the fact that a patent is in place? These and many more questions will be addressed throughout this research presentation.

It is the end of your first week of work at the new factory and while on the line you design a brilliant new piece of machinery that just could be the next great gizmo in this industry. You realize that if it works and if its marketed properly, well hey, you could just become super rich. A thought crosses your mind - I should patent this and I wonder if the patent process is difficult? Actually, the patent process is not a difficult process to understand and use at all.

However, if your employee contract is worded in just such a way as most are, your great idea just may belong to the company and not you at all. "You say you signed your company's employment agreement without a second glance? Then you better think twice about turning your ideas into anything more than daydreams: Your dream products might just belong to your employer. The truth is, many employment contracts give your employer exclusive rights to virtually all of your ideas and inventions, regardless of whether they were developed in connection with your job." (Harbert)

The logical time to read and understand an employment contract is always prior to the signature block being filled. A better idea may even be to have an attorney that is knowledgeable in employment contracts to review it. "For starters, a typical high-tech employment contract contains provisions concerning confidentiality and ownership of intellectual property..." (Harbert)

What is a patent? The United States Patent and Trademark Office (USPTO or Office) is a government agency that is responsible issuing patents after they examine in detail inventions provided by whoever feels they meet the criteria. A patent is a more or less a type of property right that provides the patent holder the right to keep an invention just that - his. In other words, "a patent is a property right granted by the Government of the United States of America to an inventor "to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States" for a limited time in exchange for public disclosure of the invention when the patent is granted. Patents grant an inventor the right to exclude others from producing or using the inventor's discovery or invention for a limited period of time." (Utility Patent Application Transmittal Form Or Transmittal Letter Fee Transmittal Form And Appropriate Fee)

For the purpose of this research, I will also define a utility patent. According to the Patent and trace mark office, a utility patent would be granted to individuals that invent or discover some new, useful, or non-obvious process, machine, article of manufacture, or composition of matter, or any new and useful improvement. And with that being said, what can or cannot be patented? The U.S. Patent and Trademark Office provide these criteria. "What can be patented -utility patents are provided for a new, non-obvious and useful:



Article of manufacture

Composition of matter

Improvement of any of the above Note: In addition to utility patents, encompassing one of the categories above, patent protection is available for (1) ornamental design of an article of manufacture or (2) asexually reproduced plant varieties by design and plant patents.

What cannot be patented:

Laws of nature

Physical phenomena

Abstract ideas

Literary, dramatic, musical, and artistic works (these can be Copyright protected).

Inventions which are:

Not useful (such as perpetual motion machines); or Offensive to public morality

Invention must also be:



Adequately described or enabled (for one of ordinary skill in the art to make and use the invention)

Claimed by the inventor in clear and definite terms" (Patent Law: An Overview)

Who can file for a patent and what advantages are derived from the process? Going back to that employee contract, a significant fact in the patent process is that only the actual owner can file for the patent. So what does that employee contract actually say? "The confidentiality portion of the agreement binds the employee to keep two types of company secrets: typical nonpublic corporate information, such as market share or sales figures, and trade secrets, says Reynolds. Trade secrets are defined as proprietary information that gives the company a competitive edge and as such, by law, must be kept secret through security measures. The details of an IC company's process technology, for instance, are considered trade secrets." (Harbert) Therefore, if your employee contract states that all intellectual property created by you the employee belongs to the company, well you are not the owner. So you read the details and see that it stated on intellectual property belongs to the company. "In the intellectual-property rights provision, the employee typically agrees to assign the rights to his inventions to the company. The scope of this provision can vary from every single idea or invention an engineer ever had, regardless of whether or not they are related to his job, to only those inventions developed by the employee in the course of his work." (Harbert)

So, what does that mean to either you or the company? "For applications filed on or after June 8, 1995, utility and plant patents are granted for a term which begins with the date of the grant and usually ends 20 years from the date you first applied for the patent subject to the payment of appropriate maintenance fees." (Utility Patent Application Transmittal Form Or Transmittal Letter Fee Transmittal Form And Appropriate Fee)

Basically, either you or the company would have a 'grant of a property right' for the invention. The new patent term of 20 years would remain as long as the proper documents were filed and the prescribed maintenance fees are maintained. Of course, the patent granted in the United States is only enforceable in the United States or the U.S. territories, and possessions. "United States patent laws are codified at Title 35 of the United States Code. Patent rules and regulations are codified at Title 37 of the Code of Federal Regulations. International cooperation between nations is largely governed by the Patent Cooperation Treaty and the Paris Convention, which deals with the protection of industrial property (i.e., patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition)." (Holzmann)

As mentioned above, there is fee structure for a utility patent. There are three basic fees for a utility patent. The U.S. Patent and Trademark office provides this information: The original filing fee is non-refundable whether or not a patent gets granted because of the associated costs to have an invention reviewed by the patent office. If a patent is granted, then he following fees apply:

Maintenance fees (paid at 3 1/2, 7 1/2, and 11 1/2 years after your patent is granted - these fees "maintain" your legal protection)

Additional fees may be required.

Although other fees may apply, these are the typical fees associated with applying for a patent:

Current fee schedule

Filing a provisional application.

More information) $80

Filing a non-provisional application.

More information) Approximately $400

Issue fee Approximately $650

Maintenance fees:

Due at 3 1/2 years Approximately $500

Due at 7 1/2 years Approximately $1,000

Due at 11 1/2 years Approximately $1,500

Utility Patent Application Transmittal Form Or Transmittal Letter Fee Transmittal Form And Appropriate Fee)

What rights do the owners of patents have? If, for example, you owned a patent for a sock maker, then no one could legally create the exact sock maker with out licensing a right from you. In other words, "Infringement of Patent [35 USC 271] states, "whoever without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefore, infringes the patent.... Whoever actively induces infringement of a patent shall be liable as an infringer.... Whoever sells a component... knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple... shall be liable as a contributory infringer." In other words, knowledge of the existence of a patent is not necessary for what is known as direct infringement (i.e., to make, use, or sell)." (Holzmann) The U.S. patent laws were have been enacted by Congress and can be reviewed by reading the U.S. Constitution, Article I, Section 8. The main reading for Patent law can be found in Title…

Cite This Term Paper:

"Business Law Utility Patents And Employee Contracts" (2003, November 27) Retrieved January 20, 2018, from

"Business Law Utility Patents And Employee Contracts" 27 November 2003. Web.20 January. 2018. <>

"Business Law Utility Patents And Employee Contracts", 27 November 2003, Accessed.20 January. 2018,