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When your employees invent something valuable, who owns it — the inventor or your company?
This question becomes critical the moment your startup raises funding, negotiates an acquisition, or files for patent protection. Investors and acquirers will always ask the same thing:
“Does the company actually own its IP?”
If the answer isn’t airtight, your deal can stall or collapse.
Patent Ownership Basics
In the U.S., the inventor is automatically the initial owner of a patent or patent application — not the employer.
That means unless your company has a valid invention assignment agreement, your employees legally own what they invent.
Ownership can be transferred, but only through clear written assignments. Without them, your company could lose the ability to enforce or license its own technology.
How to Make Sure the Company Owns Its Patents
1. Get invention assignment agreements signed early
Every employee and contractor who works on product development should sign a Confidential Information and Invention Assignment Agreement (CIIAA) before starting work.
This ensures that any inventions created during employment automatically belong to the company.
🚫 Waiting until after the invention is made can lead to disputes or gaps in ownership.
2. Include IP clauses in contractor and consultant agreements
Service providers and consultants are often overlooked — yet they may contribute to patentable innovations.
Each should sign agreements with IP transfer clauses ensuring all deliverables (including patentable ideas) are assigned to your company.
3. Execute explicit patent assignments at filing
Even if a general assignment exists, have inventors sign specific patent assignments when applications are filed.
These documents list the exact patent or application number and are easier to record with the U.S. Patent and Trademark Office (USPTO) — essential for public notice and legal proof of ownership.
Avoiding Common Patent Ownership Pitfalls
- Multiple inventors: Joint ownership can cause major complications. Any co-owner can license their share independently unless otherwise agreed.
→ Best practice: have one entity (the company) own 100% and license back if necessary. - Unsigned or oral assignments: Verbal agreements don’t count. Assignments must be in writing, identify all parties and patents clearly, and recite some form of consideration.
- Delayed recording: If the assignment isn’t recorded with the USPTO within three months, ownership can be challenged by later purchasers who acted in good faith.
Why It Matters for Investors and Acquisitions
During due diligence, investors and acquirers will review every assignment chain to ensure the company truly owns its IP.
Missing or defective assignments are one of the top reasons deals are delayed or repriced.
Well-structured IP ownership documents:
- Demonstrate clean title to technology assets,
- Avoid ownership disputes with founders or employees,
- Increase valuation by showing defensible IP rights.
Best Practices for Patent Assignments
A valid patent assignment should:
- Be in writing and signed by all parties.
- Clearly identify the patent or application (number, title, inventor).
- Recite consideration (even nominal).
- Be witnessed or notarized.
- Be recorded with the USPTO promptly after signing.
If your team is remote or global, speak with counsel before relying on e-signatures — requirements vary by country.
Final Takeaway
Your company’s patents are only as valuable as its ownership documents.
Before your next funding round or patent filing, make sure you have:
- Signed invention assignment agreements with all employees and contractors,
- Patent-specific assignments recorded with the USPTO, and
- Clear IP provisions in all service contracts.
At Apex Corporate Law, we help startups and growing companies secure their intellectual property from day one — so they can focus on building, not worrying who owns the innovation.
