Agreements Protect Company IP Rights

CONFERENCE NEWS: MD&M WEST

Medical device firms should use employee, nondisclosure, and material transfer agreements to avoid potentially thorny problems with intellectual property (IP), says a patent counsel.

When protecting IP, firms face a number of challenges. These can include transferring IP ownership from an employee and preventing IP leakage. Establishing agreements could be an effective way for a company to protect itself in these situations, Arthur Hsieh, PhD, patent counsel at Kyphon Inc. (Sunnyvale, CA), told an MD&M West conference audience.

If a company wants to maintain control of all inventions created by its employees, it must have an agreement in place for each employee. Ownership of an invention at the time of its conception belongs to the inventor, not the company, said Hsieh. Therefore, in the United States, the patent application must be filed in the name of the inventors.

Properly transferring the rights of the invention from the employee to the company is essential. Hsieh suggested that the employee agreement include an IP clause that grants future interest in inventions created by an employee while working for the company. With each patent application, a record should also be established with the U.S. Patent and Trademark Office. This will serve as further evidence that ownership has been transferred.

Nondisclosure agreements are a critical part of preventing IP leakage. Informing another party of the research details can result in the loss of patent rights, unless it's done on a confidential basis, warned Hsieh. A nondisclosure document holds involved groups responsible for keeping important information under wraps. Companies should have any visitors or parties involved in meetings sign the document.

Nondisclosure also preserves the right to file a future patent application. Once public disclosure occurs, all foreign patent opportunities are usually lost (if a U.S. patent application hasn't already been filed). The United States has a one-year grace period to file a patent application after public disclosure.

Many companies engage in conversations with outside scientists, doctors, and institutions. Having a materials transfer agreement allows a company to share its research materials with external entities while still protecting its IP rights to the materials. When sending proprietary research materials to an outside party, always consider whether such an agreement should be implemented, said Hsieh.

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