Employees and Independent Contractors Generally Retains Rights to Inventions and Patents.

There is great value associated with intellectual property developed by their employees and contractors, so that disputes often arise as to who owns what.  The scope of intellectual property rights flowing to either the employer or principal and those going to the contractor or independent inventor must specified through negotiations and contracts.

For example, copyrightable works, such as software/computer programs and website designs and formats, belong to an employer when these copyrightable works are created by an employee in the scope of his or her work.  However, when an independent contractor or freelance software programmer or independent website designer creates the same product, the copyright on these works belongs with the independent contractor, unless the parties agree otherwise in writing.

Similarly, patent rights will generally remain with either the employee or independent contractor unless the parties reach some other agreement. The ownership of copyrights and patents in these differing situations is discussed in more detail below.

When the “Work Made For Hire” doctrine applies, e.g. under the United States Copyright Act an employer may be the owner of “a work prepared by an employee within the scope of his or her employment.”  However, the “Work Made For Hire” doctrine does not apply to independent contractors or others falling outside the status of an employee.  When an employer or company hires a software programmer to design a computer program for the company, the copyright associated with the work product of that contractor remains with the contractor.  The same principle applies to the hiring of a photographer or website designer as an independent contractor.  The copyrights associated with the work product do not automatically belong to the hiring company.

The general rule with patents is that an employee or independent contractor retains the rights to inventions made while employed, even to those within the scope of his or her employment or contracted work.  This rule does not apply if there is an express agreement providing otherwise, e.g. if the employee/independent contractor was specifically hired to invent the patentable subject matter and the employment agreement provided for an assignment of patent rights.