Sunday, February 15, 2009



Many in-house Corporate Attorneys get a mild sense of panic when an employee inventor refuses to sign a Declaration or Assignment documents for a Patent Application. If the inventor is subject to an employment agreement (as he should be) then this is really no big deal.

However, making a big deal out of it could become a big deal. In a recent article in Intellectual Property Today, Wesley Overson of Morrison & Forester illustrates one nightmare scenario than could ensue, if you try to pressure an inventor to sign Declaration documents. In that instance, the inventor was later fired, and filed suit for wrongful termination on the grounds of Patent Harassment.

If that scenario played out in real life, it would have been a shame, because proceeding without inventor signature is not really all that difficult. If an inventor refuses to sign, and they are obligated to sign as the result of an employment agreement, then you can easily proceed in the absence of his signature by filing a Petition under 37 CFR § 1.47(a).

Rather than trying to browbeat an Inventor into signing, it is probably a better idea to merely remind them of the obligations under their employment agreement to cooperate with the prosecution of Patent Applications, even after employment has ended. Put this into a form letter, if necessary, and thus, you cannot be accused of singling out a particular inventor for abuse or pressure.

In the scenario of Mr. Overson's article, the inventor argued that he was the sole inventor on the Patent (his co-workers strongly argued otherwise) and he refused to sign any declaration or oath on the grounds it would be "fraud" to sign an oath naming his co-workers as co-inventors.

In such a scenario, it pays to investigate such claims carefully. Have each inventor or purported inventor point to what part of the invention they believe themselves to be inventors of, and have them document this (and/or provide supporting documentation). Once you have investigated the matter, you can provide this proof to the non-signing inventor, or not. If the non-signing inventor has left the company, it is probably a moot point, as the inventor no doubt is using this issue for other reasons. You are not required to persuade him to sign, and any such persuasion or pressure could backfire, as illustrated in the Overson article.

The Overson article was based in part, apparently, on a real-life case. What makes such a case so silly and wasteful is that such "harassment" of the inventor was totally unnecessary. If the inventor refuses to sign, just get a record of his refusal to sign and file a Petition under Rule 47.

And you should expect to file such Petitions as a regular part of your practice. Companies routinely downsize, morph, and change. Employees leave for greener pastures or go to work for competitors. Inventors are often highly-strung individuals who can be very unreasonable to deal with. In short, the Rule 47 Petition is not a rarity to anyone practicing for any length of time.

What do you need for such a Petition?

37 CFR §1.47(a) states:

If a joint inventor refuses to join in an application for patent or cannot be found or reached after diligent effort, the application may be made by the other inventor on behalf of himself or herself and the nonsigning inventor. The oath or declaration in such an application must be accompanied by a petition including proof of the pertinent facts, the fee set forth in § 1.17(g), and the last known address of the nonsigning inventor. The nonsigning inventor may subsequently join in the application by filing an oath or declaration complying with § 1.63. (emphasis added)

The Requirements for such a Petition are set forth in 37 CFR §1.47(a) and MPEP 409.03(a):

"(A) All the available joint inventors must (1) make oath or declaration on their own behalf as required by 37 CFR 1.63 or 1.175 (see MPEP § 602, § 605.01, and § 1414) and (2) make oath or declaration on behalf of the nonsigning joint inventor as required by 37 CFR 1.64. An oath or declaration signed by all the available joint inventors with the signature block of the nonsigning inventor(s) left blank may be treated as having been signed by all the available joint inventors on behalf of the nonsigning inventor(s), unless otherwise indicated.

(B) The application must be accompanied by proof that the nonsigning inventor (1) cannot be found or reached after diligent effort or (2) refuses to execute the application papers. See MPEP § 409.03(d).

(C) The last known address of the nonsigning joint inventor must be stated. See MPEP § 409.03(e)"

In addition, the Petition Fee, Response to Missing Parts Fee, and any extension of time fees are also due. (37 CFR §1.47).

As you can see, this is not really a lot of paperwork, and these Petitions are routinely granted. In one recent case, I had a client nearly fall into the same trap as in the Overson article. An inventor, now an ex-employee, refused to sign the Declaration and Assignment documents. Outside counsel quoted an outrageous price for filing a Rule 47 Petition, on the grounds that such a Petition was a complex piece of legal work. So, naturally, in-house counsel delayed the matter, hoping to persuade the inventor to sign the documents.

Oftentimes, ex-employees use such tactics as a means of extracting additional concessions from employers. They perceive their signature to be important on the Patent documents and thus try to use their signature as leverage for additional severance pay, benefits, or resolution of other grievances. Falling for this trap - in effect paying for a signature - is a bad idea. If it comes out later in litigation that the inventor was paid off to sign the Patent documents, an opponent could allege fraud.

Moreover, given how simple and easy a Rule 47 Petition is to file, why would anyone let an inventor blackmail them with what amounts to little more than a Parking Ticket? Just fill out the forms, send them in with your check, and you can proceed without the inventor, thank you.

The first part of the Petition is easy to prepare. The documents in question are available for download from the USPTO website in fillable PDF format. Compete the Declaration form and insert the inventors names and addresses and have the signing inventors sign where indicated. That done, you're 1/3 there.

Next, we need to show proof that the non-signing inventor refuses to sign or cannot be found. For this, you can use a number of pieces of proof, and there is no harm in submitting more than one. Such proof can include:

1. A written statement, letter, or e-mail from the inventor saying that they refuse to sign.
2. An affidavit from a person or persons in the company setting forth the facts surrounding the refusal to sign.

3. A copy of a letter, declaration, and copy of the application sent to the inventor's last known address by certified mail, return receipt requested (if this is returned as refused, so much the better).

Again, the more evidence you have, the better. If you have an e-mail from the Inventor saying "I'll sign this when hell freezes over", that's good. But even better is an affidavit from Corporate Counsel stating that they received this e-mail in the ordinary course of business, etc. etc., and also setting forth dates and times (approximate, if necessary) when they met or telephoned with the inventor and he refused to sign.

Once you have marshaled your facts and assembled your evidence, you are more than 2/3 done with your petition. All that remains is to provide the inventor's last known address or addresses, and pay the necessary fees and/or extension of time fees and/or response to Missing Parts fee.

If you have more than one address for the inventor, by all means, provide it. There is no harm in providing every piece of information you have.

The fees are surprisingly low. The Petition fee is only $130, of course, and for a small entity, the missing parts fee is $65. While some law firms may look at a Rule 47 Petition as a billing opportunity, and run up legal bills in the thousands, in actuality, it is a simple process, particularly if in-house counsel can do most of the legwork by marshaling facts and assembling documentation.

Such Petitions, if complete, are routinely granted and granted rather quickly. The last Petition under Rule 47 I filed was granted within months. The process was so easy and fast, that my client wondered why they had bothered trying to get the inventor to sign at all, after his initial refusal.

If the employee is under an employment agreement that obligates him to cooperate with the prosecution of the application and also assign his rights to the company, then there is no reason not to proceed when an inventor refuses to sign. Oftentimes, some in-house counsel believe that such Petitions may mar the resultant Patent or otherwise throw a wrench in the works. However, as Mr. Overson's article illustrates, trying to "force" an inventor to sign can have a boomerang effect. Better to just file the Petition after the initial refusal and move on.

Note that the Declaration is only required to prosecute the Patent Application. It does not determine who owns the resulting Patent. While the Rule 47 Petition can allow you to proceed with prosecuting the Patent, how do you get around the Assignment problem?

One way is to file a copy of the non-signing Inventor's employment agreement with the Assignment Branch. While arguably, such an employment agreement is not an assignment per se, (you cannot assign a future interest, remember?) it does put others on notice that the non-signing inventor is obligated to assign his rights to the company. This way, the non-signing inventor cannot try to license or sell his part of the Patent, as anyone doing due diligence would realize that he has no legal rights to the Patent.

Ownership of an invention initially rests with the inventors in the U.S., until the application is Assigned to the Company. With multiple inventors, each inventor "owns" the Patent, until it is assigned. This means that each inventor, technically, can license the Patent separately from the others - a nightmare scenario, if it could actually happen.

Since the Inventors own the Patent Application until it is Assigned, oftentimes, this means there may be a brief window of time where a Patent Application belongs to the Inventors and not the Company, until the Assignments are executed and filed. Some Companies try to avoid this window by filing all cases with Signed Assignments. Others, such as myself, prefer to file an Assignment later, with the Serial Number and Filing Date specified on the Assignment.

The risk of the "window" I think, is overstated. To begin with, if an inventor is going to refuse to sign anyway, you can't get him to sign at the time of filing anyway. Unless you plan on laying off the Inventor next week, these signatures can wait.

Also, it is never a good idea, psychologically, to make these documents seem very important (as they really are not). If you lead the Inventor to believe that his signature is desperately necessary for the Patent, he will be more inclined to withhold it.

With former employees, who may have left as part of a layoff, reduction, or even been fired, this is particularly troublesome. As they may now be working for a competitor, you should approach them carefully. One tactic that seems to work is to present the Assignment and Declaration documents to the Inventor (along with a copy of the Application as-filed) and emphasize this is a routine matter. Mention that as part of their employment agreement they are obligated to cooperate in the prosecution of the Patent Application and also obligated to Assign their Patent rights.

Of course, since they are a former employee, you don't want to be construed as giving them legal advice. I often recommend that they consult their own Attorney if they have any questions - perhaps the in-house counsel at their new place of employment.

This later trick often works. Once the Inventor thinks about it, they realize that if the in-house Counsel at their new place of employment gets wind of the fact that they are not inclined to honor employment agreements, their opportunities at the new company may be limited. Engineers are hired to Invent, period - and an Engineer who tries to invent things and take them with him is of no value to anyone.

As a Patent Attorney or in-house Counsel, you are more than likely to run into situations where Inventors refuse to sign. The best way to approach this situation is to document the facts and then proceed with a Rule 47 Petition. Badgering or otherwise harassing the Inventor to sign is not going to produce results, and the time wasted will be paid for in extension of time fees. You are better off to just acknowledge their refusal and move on.