In-house corporate counsel and managers are routinely involved with license agreements, acquisitions, mergers, investments and/or an IPO. All of these transactions will involve intellectual property due diligence—an audit to assess your company’s IP assets. Forward-thinking in-house corporate counsel and managers adopt “GMP”— good manufacturing practice. Here, we will discuss six GMP tips for practicing ongoing IP management.
(1) Review employment and assignment agreements to ensure your company owns all the intellectual property rights.
GMP requires that your company ensure proper ownership of your IP rights. In a seminal case, Stanford v. Roche, the U.S. Supreme Court provided guidance regarding drafting of employment agreements to ensure that your company properly owns all inventions. Stanford v. Roche, 131 S.Ct. 2188 (2011). Specifically, the court found that an employment agreement that includes the term “agree to assign… [a] right, title and interest in” an invention is only a “mere promise to assign rights in the future” and thus, does not transfer rights in an invention from an employee to a company. Stanford, 131 S.Ct. at 2194, 2202. In contrast, the court held that an employment agreement that includes the term “will assign and do[es] hereby assign” an employee’s “right, title and interest in [an invention]” effectively transfer rights in an invention from the employee to an employer. Stanford, 131 S.Ct. at 2202. Thus, under GMP, your company should frequently review employment agreements and patent assignments to confirm that the phrase “I hereby assign all right, title and interest” is included, in lieu of the phrase “I promise to assign all right, title and interest” or “I agree to assign all right, title and interest.”