Companies are making ever-greater use of third-party contractors to assist in the development of proprietary technology and processes. By using third-party contractors rather than employees, companies hope to save money, gain flexibility in managing resources and spend more time on core business operations. In most cases, a company engaging contractors wishes to own the work product those contractors create. Yet enterprises need to take certain precise steps to ensure that they obtain the desired intellectual property rights in such work product.
Generally speaking, copyrights, patents and trade secrets are the three principle types of intellectual property rights that companies are most often concerned about when engaging third-party contractors for technology and process developments. There are differences in each of these rights, and companies may need to take different steps to convey ownership in such rights.
Subject to certain qualifications, under U.S. patent law inventors can obtain patents on any “new and useful process, machine, manufacture, compositions of matter … or improvement.” Generally speaking, the patent right initially belongs to the inventor (i.e., the natural person who developed the invention). Inventors can assign their patent rights provided they execute a clear written assignment instrument.