Employee Invention and Inventor Compensation Toolkit: Agreements, Statutes, Disclosure, and Awards

By Casey Scott McKay · 2024-03-07

An invention belongs to the person who made it until a document moves it, and the document is frequently missing, misdrafted, or unsigned. This toolkit assembles the working material for the programme that makes an employer actually own what its people invent. It covers present assignment drafting and the verb tense that decided a generation of chain-of-title disputes, together with the state statutes that carve inventions out of assignment agreements and the notices they require. It sets out the population beyond employees that no employment template reaches — contractors, founders, interns, and academic collaborators — and the flow-down that most often fails. It works through the disclosure and review machinery that determines whether a company ever learns an invention exists, and the award schemes that satisfy the foreign statutory regimes no contract can waive. It closes with confirmatory assignments, onboarding and exit, chain-of-title remediation, clause language, and a diligence dry run.

IP and Technology > Patent Counseling Transactions | Toolkit | Published 7 March 2024 - Updated 25 February 2026 | Casey Scott McKay - marksy.us

Summary. An invention belongs to its inventor until a document moves it. This toolkit covers present assignment drafting, state statutory carve-outs and their notice requirements, the prior inventions schedule, holdover clauses drafted to survive, coverage of contractors and founders and academics, the disclosure and review process, inventor award schemes against the German and Japanese regimes, confirmatory assignments and recordation, onboarding and exit, and chain-of-title remediation.

Keywords: invention assignment · present assignment · state carve-outs · prior inventions schedule · holdover clauses · disclosure process · review committee · inventor awards · German employee inventions act · Japanese article 35 · confirmatory assignment · recordation · contractor flow-down · onboarding controls · exit process · remediation

Start Here

The default rule is the opposite of what employers assume, and everything follows from that.

Rights vest in the inventor. 35 U.S.C. § 115 requires the inventor to be named and 35 U.S.C. § 261 makes patents assignable in writing. There is no employment exception that transfers ownership automatically. The Supreme Court said so plainly in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc..

The common law fills only part of the gap. The employed-to-invent doctrine gives equitable ownership where the employee was specifically hired or directed to make the invention — Standard Parts Co. v. Peck — and shop rights give a non-exclusive, non-transferable licence where the employer's resources contributed, following United States v. Dubilier Condenser Corp.. Neither is a substitute for an assignment, and neither is worth anything in a diligence exercise.

So the company owns what a chain of documents says it owns, and that chain usually has a hole in it.

And most companies have an agreement rather than a programme. The template exists; the questions are who signed it, when, in which version, with which jurisdictional schedule, stored where, supplemented by what confirmatory documents, and supported by what disclosure process.

See Who Owns What Your Engineer Thought Of for the doctrinal treatment, Building an Invention Assignment and Reward Programme for the sequence, and the Employee Invention Checklist for the working list.

Part one: the agreement

Use present assignment language. "Hereby irrevocably assigns" transfers title as inventions come into existence; "agrees to assign" creates a promise requiring a further act, defeasible by a subsequent assignment to a bona fide purchaser. The Federal Circuit drew the line in FilmTec Corp. v. Allied-Signal Inc. and the Supreme Court applied its consequences in Stanford v. Roche. This is the single most important sentence in the document, and a generation of agreements got it wrong.

Define the subject matter broadly: inventions, discoveries, improvements, developments, designs, works of authorship, mask works, know-how, data, and trade secrets, whether or not patentable or registrable. A patent-only assignment leaves the software and the data behind.

Add a copyright assignment alongside work-made-for-hire characterisation, because 17 U.S.C. § 101 covers only nine enumerated categories for commissioned works and Community for Creative Non-Violence v. Reid applies agency factors to the employee question. 17 U.S.C. § 204 requires a signed writing.

Waive moral rights to the fullest extent permitted, with a consent as fallback. 17 U.S.C. § 106A is narrow domestically and the international exposure is broader.

Include further assurances obliging execution of documents, cooperation in prosecution, and testimony, with a power of attorney coupled with an interest. The statutory backstop is 35 U.S.C. § 118, which permits filing by a party with sufficient proprietary interest and which is far more painful than a signature obtained on day one.

Include the disclosure obligation, stating what, to whom, in what form, and by when.

Include confidentiality covering third-party information the company holds under obligation, a records obligation, and a return-of-materials obligation.

Confirm assignability so the agreement survives a corporate reorganisation, and check that the counterparty entity still exists.

And keep it readable, because an eleven-page agreement in small type is signed unread, and an agreement signed unread produces a blank prior inventions schedule.

Part two: statutory carve-outs, schedules, and holdover clauses

Several states limit what an assignment agreement may reach. The model is California Labor Code section 2870, which excludes inventions developed entirely on the employee's own time without the employer's equipment, supplies, facilities, or trade secret information — except inventions that relate at the time of conception or reduction to practice to the employer's business or to its actual or demonstrably anticipated research or development, or that result from work performed for the employer.

Read the exception, not just the rule. The carve-out protects the genuinely unrelated invention. An engineer at a storage company who invents a storage improvement at home on a Sunday is still assigning it. Companies over-read the carve-out and under-claim as a result.

Give the required notice. Section 2872 requires written notice at the time the agreement is made, and analogous requirements exist elsewhere. An agreement without the notice is defective in a way that is trivially fixable at hire and awkward afterwards.

Build a jurisdiction schedule — one template with an appendix per state, applied by work location — covering Washington, Illinois, Minnesota, North Carolina, Utah, Kansas, Delaware, New Jersey, and others with meaningful differences.

Apply it correctly for remote employees, which is now the most common failure. The applicable state is frequently not the headquarters state, and the field that drives appendix selection is routinely stale.

Handle non-US employees on locally drafted instruments, not on a United States template with an appendix.

The prior inventions schedule is blank in the overwhelming majority of executed agreements, and blank means one of three things: nothing to list, the form was not read, or something was omitted deliberately. A blank schedule generally helps the employer against its own employee and does not help at all against a previous employer, which is where the real risk sits. Walk through it in conversation rather than handing it over, record the answer including "nothing", and revisit it on role change.

Holdover clauses extend the assignment obligation past employment and are the provision most likely to be struck down. Limit the duration to six to twelve months; limit the subject matter to the field the employee actually worked in; require a nexus to their work or to the company's confidential information; and make it severable, so an over-broad element does not take the enforceable core with it. Courts assess these as restraints on the employee's ability to work, and Edwards v. Arthur Andersen LLP marks the strict end of the spectrum. See Where an Employee Can Go and the Restrictive Covenant and Departure Checklist.

And anticipate the conception fight, because the employee will say the invention was conceived after departure and the employer will say conception occurred during employment. Conception is the formation of a definite and permanent idea of the complete and operative invention, and proving its date requires contemporaneous records — which means the real control is documentation during employment rather than litigation afterwards.

Part three: the population beyond employees

Contractors and consultants. No useful employed-to-invent doctrine and no shop right worth having. Every engagement needs a present assignment, a copyright assignment, a moral rights waiver, and further assurances. "All deliverables shall be works made for hire" assigns nothing patentable. See Who Owns the Work.

Flow-down is the most common structural failure: an impeccable agreement with an agency whose own agreement with the individual who did the work does not exist. Require identification of subcontractors before engagement, equivalent terms, and evidence on request. See the Agency Engagement Checklist.

Interns, apprentices, and visiting researchers, frequently engaged with no paperwork, who invent.

Advisors and board members, contributing technically under agreements that address confidentiality and equity and say nothing about inventions.

Academic collaborators, whose institutional policies assign to the university, so the individual cannot assign to the company and the negotiation must be with the institution. See From Laboratory to Licence and the Technology Transfer Checklist.

Founders before incorporation, whose pre-incorporation work cannot have been assigned to a company that did not exist. A confirmatory assignment at incorporation, listing the work by name, prevents the most expensive dispute in the catalogue.

Acquired teams, whose chain of title is inherited with its gaps and should be remediated in the first year while the people are still there.

Government-funded researchers, subject to subject invention obligations that override the ordinary programme. See the Federal Contract IP Checklist.

Joint development partners, where the 35 U.S.C. § 262 default lets each joint owner exploit and licence without accounting — almost never what either party intends. See Whose Invention Is It?.

And a coverage register listing every category, the instrument covering it, and the owner of the process, because a category with no instrument is a gap somebody has to close.

Part four: disclosure and review

An assignment is worthless if the company never learns the invention exists, and disclosure is the weakest link in almost every programme for behavioural rather than legal reasons.

Understand why engineers do not disclose. They do not know what is patentable and their intuition is unreliable in both directions. They think the improvement is obvious because they have lived with the problem for a year. They submitted before and heard nothing. The form is long. And nobody has told them the company cares.

Cut the form to six questions. What problem were you solving? What is the solution, in your own words? What did people do before? When did you first have the idea, and how do you know? Who was involved? Is it in a product, a paper, a talk, or a customer conversation, and when?

Do not ask engineers for prior art or claim scope. That is the attorney's job and asking guarantees the form is not returned.

Acknowledge within a week, by a named human. This single practice does more for disclosure volume than any award scheme.

Decide within ninety days and communicate the decision with a reason, including refusals. "We are not filing because this is disclosed in the following reference" teaches the engineer something; silence teaches them not to bother.

Go looking rather than waiting. The highest-yield source is a patent attorney attending design reviews, reading release notes, and asking how something was solved. Budget the time.

Mine the existing artefacts — release notes, internal technical posts, conference submissions, architecture decision records, and pull request descriptions — quarterly.

Control publication. 35 U.S.C. § 102 provides a one-year grace period for the inventor's own disclosure in the United States and most other jurisdictions provide none. Route papers, talks, launches, demonstrations, and public repositories through a pre-publication review with a committed two-week turnaround. See Prior Art in a First-Inventor-to-File World.

Capture the conception date at disclosure, because that answer, recorded contemporaneously, resolves a holdover dispute three years later.

Run a committee that decides. A patent attorney, a senior technical person from the area, and somebody who owns the roadmap, meeting monthly, scoring against stated criteria: technical merit and likely patentability; detectability of infringement; roadmap alignment; defensive value; design-around difficulty; whether trade secret protection is better; and whether publication is imminent.

Make trade secret a real option, with the consequential steps taken — restricted access, marking, and inclusion in the inventory — because a decision not to file that is simply a filing cabinet is a lost asset. See Building a Trade Secret Program That Survives Litigation.

Determine inventorship at the committee, claim by claim under 35 U.S.C. § 116, applying the conception standard of Burroughs Wellcome Co. v. Barr Laboratories, Inc. and the collaboration requirement of Kimberly-Clark Corp. v. Procter & Gamble Distributing Co., with correction available under 35 U.S.C. § 256. Inventorship is not a reward for effort or seniority. See the Inventorship Determination Checklist.

And ask the prior art question every time, because material prior art known to the inventors must reach the attorney under 37 C.F.R. § 1.56. See the Duty of Candor Checklist.

Part five: awards and the foreign statutory regimes

United States practice treats the assignment as complete on signature; much of the world does not.

Germany. The Employee Inventions Act requires an employee making a service invention to report it, permits the employer to claim it, and entitles the employee to reasonable remuneration where it does. Official guidelines supply calculation methods based on the invention's value, a share factor derived from the origin of the task and the employee's position, and a licence analogy. Claims survive the employment, can run for the life of the patent, and go to an arbitration board before the courts. Awards have reached seven figures, and unquantified German exposure is a standard diligence finding.

Japan. Article 35 of the Patent Act permits the employer to acquire the right where its internal rules so provide, and entitles the employee to reasonable remuneration or other economic benefit. The reasonableness of the rules is assessed by reference to the process of adoption — consultation, disclosure of the standards, and an opportunity to make representations — so a scheme imposed without consultation is vulnerable regardless of its generosity.

China provides statutory reward and remuneration for service inventions with defaults where the employer's rules do not provide otherwise.

The United Kingdom provides compensation under sections 40 and 41 of the Patents Act 1977 where a patent is of outstanding benefit, a standard revived in practical terms by the Shanks v Unilever line.

Korea and several European jurisdictions have their own frameworks of varying strength.

Have a scheme. The alternative is not the absence of payments; it is payments assessed years later by a tribunal that knows exactly how successful the invention became.

Stage the payments — disclosure, filing, grant, and a discretionary commercialisation pool — and pay on disclosure rather than only on filing, because that is what reaches the engineers who would otherwise not bother.

Pay each named inventor rather than splitting a fixed pot, because splitting produces contribution arguments that distort inventorship.

Handle commercialisation awards through a committee with published criteria, not a revenue-attribution formula, because attributing product revenue to a patent is the apportionment problem that occupies damages experts.

Publish the rules, consult before adopting, and keep the record, because where statutory reasonableness depends on the adoption process, publication and consultation are legally load-bearing.

Budget it against expected disclosure and filing volumes, and review annually.

And build a recognition layer that is not money — naming inventors publicly, plaques, patent walls, an annual event — which engineers value at least as highly, costs a fraction, and reaches the technician and the colleague who contributed without being inventors.

Part six: confirmatory assignments, onboarding, and exit

Execute a confirmatory assignment for every application, naming it by title, serial number, and filing date, signed by each named inventor, at or shortly after filing and while they are employed. It converts a general contractual argument into a specific recorded transfer.

Record it. Under 35 U.S.C. § 261 an unrecorded assignment is void against a subsequent bona fide purchaser unless recorded within the prescribed period, and recordation is inexpensive. Record in every jurisdiction where the family is filed, record corporate name changes and intra-group transfers, and confirm the recorded owner is a live entity. See the Assignment Recordal Checklist.

Reconcile the recorded chain against reality annually, because the two diverge through reorganisations, mergers, and omission.

Spend ten minutes on day one. Explain in plain language what the agreement assigns and what it does not. Walk through the prior inventions schedule in conversation. Ask about outstanding obligations to previous employers and obtain copies. Give an explicit written contamination instruction — no documents, no code, no old notes, nothing reproduced from memory — and obtain a signed acknowledgement, which is the single best evidence available if a former employer later alleges misappropriation under 18 U.S.C. § 1836 against the background of PepsiCo, Inc. v. Redmond.

Assess high-risk hires — direct competitor, adjacent role — and consider a temporary assignment away from the overlapping area. See the Competitive Intelligence Checklist.

Explain the disclosure process and the award scheme at hire, because an engineer who learns about the scheme in year three had no reason to disclose in years one and two.

And run the exit properly. Ask what they are working on that has not been disclosed. Obtain confirmatory assignments for every application on which they are named and for disclosed inventions not yet filed. Confirm the holdover obligation in writing and explain its scope. Recover materials and devices, imaging where the departure is to a competitor and preserving before the standard reimaging schedule destroys the evidence. Revoke access on the last day and review what was accessed in the final weeks.

Clause bank

Present assignment. Employee hereby irrevocably assigns to Company, and agrees to assign to the extent any such assignment cannot be made presently, all right, title and interest throughout the world in and to all Inventions, together with all intellectual property rights in them, including the right to claim priority, the right to file applications in any jurisdiction, and the right to sue for past infringement. "Inventions" means all inventions, discoveries, improvements, developments, designs, works of authorship, mask works, know-how, data, and trade secrets, whether or not patentable or registrable, made, conceived, or reduced to practice by Employee, alone or with others, during the period of employment. This assignment is subject to the Statutory Carve-Out at Appendix [X] and excludes the Prior Inventions listed at Schedule [Y].

Statutory notice and prior inventions. NOTICE: This Agreement does not apply to an invention which qualifies fully under the law of [State], a copy of which is attached at Appendix [X]. Employee has listed at Schedule [Y] all inventions made before employment in which Employee claims an interest. If Schedule [Y] is blank, Employee confirms there are no such inventions. Employee acknowledges that Employee was given the opportunity to list Prior Inventions and that Company relies on this confirmation.

Further assurances and power of attorney. Employee shall, at Company's request and expense, execute all documents and do all things reasonably required to vest, perfect, record, prosecute, maintain, enforce, and defend the rights assigned, both during and after employment. If Employee fails to execute any such document within [20] business days of request, Employee irrevocably appoints Company as Employee's attorney to execute it on Employee's behalf, this appointment being coupled with an interest.

Holdover. Employee shall promptly disclose to Company any Invention made within [6] months after termination which (a) relates to the field in which Employee worked during the [12] months before termination, and (b) results from or is derived from work performed for Company or from Company's Confidential Information. Such Inventions are assigned under clause [X]. Each element of this clause is severable, and the invalidity of any element does not affect the remainder. Nothing in this clause restricts Employee from working in any field or for any employer.

Confirmatory assignment. For good and valuable consideration, the receipt of which is acknowledged, the undersigned inventor hereby sells, assigns, and transfers to [Assignee] the entire right, title and interest in and to the invention described in United States patent application serial number [number], filed [date], entitled "[title]", and in and to all applications claiming priority from it in any country, all patents granted on any of them, and all rights to sue and recover for past infringement. The undersigned confirms that this assignment confirms and does not replace the assignment made in the undersigned's employment agreement dated [date].

Contractor assignment and flow-down. Contractor hereby irrevocably assigns to Client all right, title and interest in all Work Product and all intellectual property rights in it, and waives all moral rights to the fullest extent permitted, with a consent as fallback. To the extent any Work Product qualifies as a work made for hire it shall be so treated, and to the extent it does not this assignment applies. Contractor shall identify each subcontractor to Client before engagement, shall procure from each an assignment in equivalent terms, and shall provide copies on request. Contractor warrants that no third party has any right in the Work Product and that Contractor is subject to no obligation inconsistent with this clause.

Award scheme rules — core terms. An Award is payable to each named inventor on: (a) submission of a Disclosure meeting the Completeness Standard — [amount]; (b) filing of a first application claiming the Invention — [amount]; and (c) grant of a first patent claiming the Invention — [amount]. Awards under (a) to (c) are payable to each named inventor and are not divided between them. In addition, the Committee may make a Commercialisation Award from the annual Pool, applying the published Criteria, and shall record the basis of each award. These Rules were adopted on [date] following consultation with employee representatives, are published at [reference], and may be amended only after equivalent consultation. Where the law of an employee's jurisdiction provides for statutory remuneration, these Rules operate [in satisfaction of / in addition to] that entitlement as determined under that law.

Part seven: remediation

Most companies reading this have a chain of title with holes in it, and remediation is unglamorous and best done before somebody is buying the company.

Inventory the population: every current and former employee, contractor, consultant, intern, advisor, and academic collaborator who might have contributed.

Locate the instrument for each — executed agreement, version, date, and jurisdiction appendix — and expect gaps in the earliest cohort, which is usually the cohort that built the core technology.

Prioritise by asset. Start with the people named on the most valuable families rather than with the alphabetical list.

Fix the language. Obtain confirmatory present assignments from every current employee whose agreement uses promissory language, framed as an administrative update, which produces near-zero objection when it is routine and universal.

Fix the missing, with an express confirmation covering everything since the engagement began.

Fix the founders with a pre-incorporation confirmatory assignment listing the work by name.

Fix the contractors, converting work-for-hire recitals into present assignments and obtaining direct assignments where flow-down is absent.

Fix the recordation, reconciling the recorded chain against the actual chain and recording what is missing.

Quantify what cannot be fixed — the former employee who will not sign, the agency that no longer exists — record the residual exposure, and disclose it rather than hoping nobody looks. Consider the 35 U.S.C. § 118 route where filing rather than ownership is the obstacle.

Do it while people are reachable, because every month reduces the proportion of the population that can be fixed with a signature.

And fix the intake at the same time, because remediation that does not change the process will be repeated in three years.

Worked scenarios

The founder who invented before incorporation. Two engineers work on a prototype for eight months, incorporate, raise money, and file. Four years later one leaves acrimoniously and asserts that the core invention predates the company and was never assigned to it. He is right on the facts. The defence rests on implied assignment, estoppel, and an agreement whose language was prospective. It settles expensively. A confirmatory assignment at incorporation, listing the prototype work by name, costs an afternoon.

The consultant's subcontractor. A company engages a development agency under an excellent agreement — present assignment, moral rights waiver, further assurances. The agency subcontracts the core work to an individual under a one-page purchase order with no intellectual property terms. At filing the company discovers the agency never owned what it purported to assign. The subcontractor signs, for a price that reflects the company's position.

The holdover that reached too far. An agreement assigns any invention conceived within two years of departure in any field in which the company does or may do business. A departed engineer patents something adjacent. The clause fails as an unreasonable restraint and, being non-severable, takes the enforceable core with it.

The German remuneration claim. A United States company acquires a German research operation. Two years later an inventor whose patent underpins a successful product brings a remuneration claim. There is no internal scheme, no payment history, and no record of the invention's contribution to revenue. The arbitration board assesses by licence analogy with the benefit of hindsight, and the exposure extends to other inventors on the same family. A published scheme adopted with consultation would have cost a fraction and would have been budgeted.

Failures that recur

"Agrees to assign" language covering the founding cohort — the most valuable inventions on the weakest instrument.

No agreement at all for the earliest employees.

Founder work predating incorporation with no confirmatory assignment.

Contractor agreements relying on work-made-for-hire recitals.

Broken flow-down to an agency's subcontractor.

Blank prior inventions schedules with no conversation recorded.

The wrong state appendix for a remote employee, from a stale location field.

No confirmatory assignment at filing.

Unrecorded assignments, so the recorded chain does not match reality.

A disclosure process nobody uses, because three unanswered submissions taught the team not to bother.

A conference presentation that starts the grace period and forecloses foreign rights.

Unquantified foreign inventor compensation exposure.

And nobody owning the programme, which is the condition every other failure depends on.

Metrics and the diligence dry run

Coverage: percentage of the inventing population with a current, correct, retrievable instrument. The headline number.

Percentage of employees with the correct jurisdiction appendix, tested by sample against work location.

Percentage of prior inventions schedules completed rather than blank.

Percentage of applications with an executed, recorded confirmatory assignment.

Disclosures per hundred technical staff per year, trended within the company rather than compared across companies.

Median days from disclosure to acknowledgement, target under seven, and to decision, target under ninety.

Filing rate from disclosures, watched at both extremes.

Award scheme cost per filing, budgeted and actual.

Foreign inventor compensation exposure, quantified per jurisdiction rather than described as immaterial.

Departures with confirmatory assignments obtained and pending disclosures captured.

Chain-of-title exceptions outstanding, each with an owner and a date.

Then run the diligence dry run, which takes a week. Select the ten most valuable families. For each named inventor, produce: the executed instrument covering them at the time of conception, in the version then current; the jurisdiction appendix and evidence of the statutory notice; the completed prior inventions schedule; the invention disclosure with its dated conception date; the inventorship analysis recorded at the committee; the confirmatory assignment naming the application; the recordation confirmation from each office; and any award payment records.

Score honestly. Count the complete files — in most companies running this for the first time it is under half. Count the assets resting solely on a general employment agreement with promissory language. Count the inventors who have left and would now need to be found. Count the assets with an unrecorded or mismatched chain. Count the foreign inventors with a potential statutory claim.

Then fix it in that order, because the assets that matter most are the ones an acquirer examines first and the people who can still be reached with a signature are a shrinking population.

Part eight: special populations and machine-assisted invention

Employees with side projects. Document the boundary in writing at the outset. The statutory carve-out protects a genuinely unrelated venture and not an adjacent one, and discovering that after the side project raises money is a poor way to learn it.

Open source contributors. Publish a contribution policy stating what may be contributed, under which licence, with what approval, and how the project's contributor licence agreement interacts with the employee's assignment. See Copyleft and Consequences.

Academic publishers within industry. Pre-publication review with a committed two-week turnaround and a provisional filing where the timing requires it.

Secondees. Confirm the assignment obligation runs to the right entity and does not conflict with the host's terms.

Works council jurisdictions. Confirm consultation requirements for disclosure obligations and award schemes, since a scheme imposed without consultation is vulnerable regardless of its generosity.

Non-inventing roles. Apply proportionate paperwork; an aggressive template applied indiscriminately is itself a compliance problem in some jurisdictions.

And machine-assisted invention, which is no longer hypothetical. An artificial intelligence system cannot be a named inventor: Thaler v. Vidal held that the Patent Act's "individual" means a natural person. That does not make AI-assisted inventions unpatentable; it means a natural person must have made a significant contribution to conception, which relocates the problem into the records layer. Record the prompt, the iteration, the selection, and the modification; record which human made which decision; and record who recognised that an output was the solution, since recognition can itself be a contribution. Check the tool's terms, because some model agreements assert rights in outputs or restrict uses incompatible with patenting. See Buying a Model and the Generative AI IP Compliance Checklist. The assignment agreement itself needs no special language, provided it is drafted as a present assignment — because if there is a patentable invention there is by definition a human inventor to assign it. The work is in the records, not the contract.

Part nine: designing the award scheme in practice

Stage the payments and understand what each stage signals.

The disclosure payment is small and universal. Its purpose is to make submitting worth the twenty minutes it costs and to reach the engineers who would otherwise not bother. Pay it on every disclosure meeting a completeness standard rather than on every disclosure that is filed, because paying only on filing teaches engineers that most of their effort is wasted.

The filing payment is larger and is paid to each named inventor rather than split, because splitting produces arguments about contribution that poison the process and distort inventorship.

The grant payment is larger still and arrives years later, which is why it motivates less than its cost suggests.

The commercialisation payment is the difficult one. Tying an award to product revenue requires attributing revenue to a patent, which is the apportionment problem that occupies damages experts. The workable version is a discretionary pool awarded annually by a committee, with published criteria and a stated basis for each award.

Publish the rules. An undisclosed scheme is a rumour, and where statutory reasonableness depends on the adoption process, publication and consultation are legally load-bearing rather than merely good manners.

Budget it. Two hundred disclosures, sixty filings, and thirty grants a year produces a predictable annual cost — a number far easier to defend than an unbudgeted statutory claim assessed years later with hindsight.

And provide for the people who are not inventors. The technician who built the rig, the colleague who suggested the approach in a corridor, and the manager who protected the time all contributed and none will be named. A parallel recognition mechanism not tied to inventorship prevents the scheme becoming a source of resentment and reduces the pressure to name people as inventors who are not — which is its own serious problem under 35 U.S.C. § 256.

One paragraph to remember

Rights vest in the inventor and only a document moves them, so use present assignment language, apply the correct jurisdictional appendix by actual work location, and give the statutory notice at the time the agreement is made. Cover the whole inventing population, not just employees, and fix the flow-down to the agency's subcontractor. Cut the disclosure form to six questions, acknowledge within a week, and decide within ninety days with a reason. Execute a confirmatory assignment for every application while the inventor is still employed, and record it. Publish an award scheme adopted with consultation wherever a statutory remuneration regime applies, because the alternative is a claim assessed years later by a tribunal that knows exactly how successful the invention became. And run the remediation now rather than during a diligence exercise, because every month of delay reduces the proportion of the population that can still be fixed with a signature.

Key Authorities at a Glance

Ownership and transfer. 35 U.S.C. § 261 on assignability, writing, and recordation; 35 U.S.C. § 115 on the inventor's oath; 35 U.S.C. § 118 on filing by a party with sufficient proprietary interest; 35 U.S.C. § 262 on joint owners.

Controlling cases. Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc.; FilmTec Corp. v. Allied-Signal Inc.; Standard Parts Co. v. Peck; United States v. Dubilier Condenser Corp..

Inventorship. 35 U.S.C. § 116; 35 U.S.C. § 256; Burroughs Wellcome Co. v. Barr Laboratories, Inc.; Kimberly-Clark Corp. v. Procter & Gamble Distributing Co.; on machine-assisted invention, Thaler v. Vidal.

Copyright interaction. 17 U.S.C. § 101; 17 U.S.C. § 201; 17 U.S.C. § 204; 17 U.S.C. § 106A; 17 U.S.C. § 203; Community for Creative Non-Violence v. Reid.

Disclosure and candour. 35 U.S.C. § 102; 37 C.F.R. § 1.56.

Trade secret and mobility. 18 U.S.C. § 1836; 18 U.S.C. § 1839; PepsiCo, Inc. v. Redmond; Edwards v. Arthur Andersen LLP.

State and foreign regimes. California Labor Code § 2870; Employee Inventor Compensation.

| Authority | Governs | Practical consequence | | --- | --- | --- | | 35 U.S.C. § 261 | Assignment in writing | No writing, no transfer | | Stanford v. Roche | Vesting | Employment alone transfers nothing | | FilmTec | Present assignment | "Hereby assigns" beats "agrees to assign" | | Standard Parts v. Peck | Employed to invent | Narrow; the job must be inventing | | Dubilier | Shop rights | A licence, not ownership | | 35 U.S.C. § 118 | Filing without the inventor | The expensive fallback | | 35 U.S.C. § 262 | Joint owners | Each may licence without accounting | | 17 U.S.C. § 101 | Work made for hire | Copyright only; not patents | | CCNV v. Reid | Employee or contractor | Agency factors decide | | California Labor Code § 2870 | Statutory carve-out | Notice required; narrower than it reads | | German Employee Inventions Act | Service inventions | Non-waivable statutory remuneration | | Japanese Patent Act art. 35 | Employee inventions | Rules must be fairly adopted |