The "First-to-File" versus "First-to-Invent" Systems
Sometimes, two people working independently of each other invent the same invention. U.S. patent law applies a "first-to-invent" standard, meaning that the original inventor may invalidate a patent granted to a later inventor, even if the later inventor filed his patent application first. When two inventors file patent applications on the same invention, the Board of Appeals and Interferences at the U.S. Patent Office may have an interference hearing to determine who conceived of the invention first, and whether the inventors were diligent in reducing their inventions to practice. Most of the rest of the world applies a "first-to-file" system, meaning that a subsequent inventor is entitled to patent protection as long as he files a patent application before the original inventor does. In such a case, the original inventor will not own the patent.
Once an inventor files a patent application, he is free to market his invention to potential manufacturers and distributors. If the patent is eventually granted, patent protection will be extended retroactively to the application filing date. Once a patent license is granted, the licensee may manufacture or sell the patented technology. A patent license, however, does not transfer full ownership rights -- for example, the licensee's right to sue third parties for infringement is limited by law.
Works for Hire
An employee may enter into an employment contract that contains a work-for-hire clause. A work-for-hire clause provides that patent rights to any technology invented by the employee in the line of duty belong to the employer as soon as the technology is created. If a work-for-hire clause applies, only the employer is entitled to apply for a patent on the technology, and any patent granted for the technology will belong exclusively to the employer. Many technology companies have their employees sign employment agreements that contain work for hire clauses.
Instead of licensing the patented technology, an inventor may simply assign the patent to another. A patent assignment transfers all right and title to the patent to someone else. This means that even the inventor must obtain a license from the assignee to continue manufacturing or selling the technology. Once the assignment agreement has been signed, the assignee is required to register the assignment with the U.S. Patent and Trademark Office by filing USPTO Form 1595. An inventor may assign a patent to receive a large lump sum payment rather than wait years for royalties to trickle in. Assignment is especially likely if the inventor is more skeptical of the invention's marketability than the assignee is.