September 25, 2017

The Government vs. General Alexander: Who Owns His Inventions

Although much in intellectual property law has changed in the almost 225 years since the first Patent Act, the basic idea that inventors have the right to patent their inventions has not. Under the law in its current form, “[w]hoever invents or discovers any new and useful process, machine, manufacture or composition of matter … may obtain a patent therefor.” 35 U.S.C. § 101. The Supreme Court has repeatedly confirmed the general rule that rights to an invention belong to the inventor. See e.g., Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc., 131 S.Ct. 2188, 2196 (2011). In accordance with these principles, unless there is an agreement to the contrary an employer does not have rights in an invention “which is the original conception of the employee alone.” United States v. Dubilier Condenser Corp., 289 U.S. 178, 188, 53 S.Ct. 554, 77 L.Ed. 114 (1933).

There is an important exception to this rule that applies to this situation: Inventions made by federal employees while working for the government generally belong to the government so long as they meet one of three criteria, absent certain exceptions that are not applicable here. Pursuant to Executive Order 10096, which was signed by President Harry Truman in 1950, and is now set forth in 37 C.F.R. sec. 501.6 (a)(1), “[t]he Government shall obtain … the entire right, title and interest in and to any invention made by any Government employee: (i) During working hours, or (ii) With a contribution by the Government of facilities, equipment, materials, funds or information, or of time or services of other Government employees on official duty, or (iii) Which bears a direct relation to or is made in consequence of the official duties of the inventor.”  The section allows the government to give ownership of the invention to the employee while retaining a license when the “contribution” is “insufficient equitably” to justify taking title or when the government has “insufficient interest” in the invention.

The section also provides, among other things, that where the government employee was in a position “[t]o supervise direct, coordinate, or review Government financed or conducted research, development work, or both” that it is presumed that the invention belongs to the government. This presumption “may be rebutted by a showing of the facts and circumstances in the case and shall not preclude a determination that these facts and circumstances justify leaving the entire right, title, and interest in and to the invention in the Government employee, subject to law.”

Thus, the government is entitled to an assignment of all right, title and interest whenever the record indicates either that the invention is related to the employee’s official duties or that the government’s contribution of time, facilities, materials, or information was substantial (In re Williams, 228 U.S.P.Q. (BNA) 381, 1985 WL 71971 (Comm’r Pat & Trademarks 1985)), even where the employee’s own agency is willing to accept only a royalty-free, nonexclusive license on behalf of the government. In re Shank, 230 (BNA) 796, 1986 WL 83613 (Comm’r Pat & Trademarks 1985). Although an invention may not be directly related to the inventor’s official duties, the government may still be entitled to an assignment if the invention was made “in consequence of” the inventor’s official duties. Menke v. Department of the Army, 20 U.S.P.Q. 2d (BNA) 1386, 1991 WL 332038 (Dep’t Comm. 1991). “In consequence of” means that the invention is made as an obvious and direct result of the performance of the inventor’s duties. In re Philips, 2 U.S.P.Q.2d (BNA) 1641, 1642-43, 1987 WL 123823 (Comm’r Pat. & Trademarks 1987). Thus, the invention belongs to the government so long as “it was within general scope of [the employee’s] job description.” Menke, 1991 WL 332038 at *3. That an employee invention was not necessary to, and was not used in, the project to which the employee was assigned does not preclude the government from taking title thereto. In re Philips, 1987 WL 123823 at *3.

Based on publicly available information, there are serious questions about the ownership of the nine patent applications that must still be addressed by the government. As an initial matter, there seems little doubt that the burden is on Gen. Alexander to rebut the presumption that the patents would belong to the government. The question is not solely whether Gen. Alexander developed the new technology on his private time but whether they are related to his previous work as director of the NSA or were made in consequence of his official duties. The apparent close relationship between the inventions and his previous official duties suggests that the inventions belong to the government. Indeed, it is hard to imagine that within a few months after serving for nine years of director of the NSA that he was able to conceive of multiple inventions that were unrelated to his previous job. The fact that lawyers at the NSA have now concluded that the inventions belong to him should not be the last word. After all they previously worked for Gen. Alexander and may want to again in the future. Under these circumstances Gen. Alexander bears the burden of overcoming the presumption that his inventions are related to his work as director of the NSA. While Gen. Alexander may be able to ultimately meet this test, the current record does not support the conclusion that the inventions belong to him.

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