It is a common misconception that an employer automatically owns all rights to the patents invented by its employees. The general rule is that, in the absence of an agreement to the contrary, an invention and any patents covering that invention belong to the employee/inventor. While state law will give an employer “shop rights” to use such an invention, this can create uncertainty and make it difficult to sell or transfer the business.
An employer, therefore, as a condition of employment, usually require that its employees sign agreements that assign inventions (and other intellectual property) created by the employee as a part of their employment to the employer. Contract law requires mutual consideration, however, for an agreement to be enforceable. Companies often struggle with whether simply providing an employee with continued employment constitutes sufficient consideration to support an assignment contract.