"Hereby Assigns" in • an Employee Agreement • Transfers Invention

Preston v. Marathon Oil Company, [2011-1013, -1026] (July 10, 2010) [O'MALLEY, Bryson, Dyk] The Federal Circuit affirmed summary judgment that Preston assigned rights in U.S. Patent Nos. 6,959,764 and 7,207,385 by virtue of his employment agreement.

DISCUSSION: After accepting employment at will by Marathon, Preston signed an Employee Agreement pursuant to which he automatically assigned inventions he made.  He identified a CH4 Resonating Manifold as a "previous" invention.  The Federal Circuit certified the question of whether continued employment was adequate consideration for an intellectual property assignment, and the Wyoming Supreme Court answered; "yes."  The Federal Circuit rejected Preston's argument that the invention was not intellectual property under the agreement because it had already been conceived at the time of the agreement, and it rejected the argument that the invention was expressly reserved.  The Federal Circuit noted that construction of patent assignment agreements is a matter of state law.  Because the agreement required that the inventions "made or conceived" be assigned, unless the invention was both made and conceived prior to employment, the employee agreement applied.  The Federal Circuit further found that invention necessarily requires at least some definite understanding of what has been invented.  The evidence did not support the conclusion  that Preston was not in possession of an excludable invention before he began employment at Marathon.  The Federal Circuit agreed with the district court's finding that Preston's testimony regarding the level of development was not credible, and at most had little more than a vague idea before his employment began.

The Federal Circuit reversed the district courts' finding that Preston breached the employment agreement by not assigning the invention because the employee agreement to "hereby assign" automatically assigned rights to the invention without the need for any additional act.
BEST PRACTICE: One again, an employee agreements should always contain a current assignment of future inventions.