Federal Employment Laws

U.S. Patent Act

Under United State laws, the term “patent” refers to a right of ownership granted to an inventor of a new, one-of-a-kind process, goods, machinery, or technology. According to the U.S. Patent and Trademark Offices, when a patent is granted to someone, “the right conferred by the patent grant is …the right to exclude others from making, using, offering for sale, or selling the invention in the United States or ‘importing’ the invention into the United States.” The patent law of the United States of America is codified in Title 35 of the US code.

It is generally presumed that patent rights automatically belong to employers as a result of an implicit agreement with employees under an employment performance. The US patent law makes it favorable for employers to have exclusive patent right ownership of an invention invented by an employee in the course of his employment with the employer.

However, an employee can still avail himself of a “shop right” limitation if he is not specifically contracted or employed to invent equipment and technology. A “shop right” enables the employer to make use of the invented technology but is prohibited from selling it or exclude others from using it.

Trademark Act of 1946

You might not have realized it, but you have been dealing with trademarks on a daily basis. According to the U.S. Patent and Trademark office, a “trademark” refers to “any word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of another.” A company brand is another simple way to think of trademarks. Trademarks are efficient tools of communication utilized by businesses to speak to customers. Trademarks represent the reputation of a brand; consumers’ purchasing decisions are influenced by them. That is why the government deems it fit to protect trademarks, and by extension, the intellectual property value of businesses using the Trademark Act of 1946.

The US Trademark Act of 1946, also known as the Lanham Act, was designed to protect all businesses that engage in interstate commerce. Unlike patents and copyrights, trademarks can be protected under state law, federal law, or both.

In protecting a trademark, registration is not necessary. See Pesos v. Taco Cabana, (1992) 505, U.S. 763 at 768. A trademark derives protection by virtue of distinctive use. The benefit of a trademark registered under the federal law is that the registration serves as evidence of both the ownership and validity of the mark, including the right to use it for commercial purposes.

Now, between an employee and an employer, who should own a trademark? The owner of a trademark can include but is not limited to the following; individuals, sole propriertorships, limited liability companies (LLCs), partnerships, corporations, trusts, etc.  See Section 1 (a) of 15 U.S.C 1051 for more information.

The person or entity that controls the nature and quality of the goods/services provided under the trademark is the owner of the trademark. (United States Patent and Trademark Office, 2020) Therefore, it is important that an employer maintains control of the use of the mark and most especially, controls the nature and quality of the goods or services during an employer-employee relationship. Failure to do so can invalidate the registration of the mark. However, an employee can enter into a contract of co-ownership with his employer to jointly own a trademark.

U.S. Copyright Act of 1976

In the course of any business or working relationship, federal law prohibits the duplication or use of copyrighted materials without the authorization of the copyright holder, unless such act is expressly exempted. The copyright law is the legislation that determines who owns and retains ownership of intellectual properties under the employee-employer relationship.

Before now, the doctrine that defined and covered ownership of intellectual property in an employee-employer relationship was the “Work-for-Hire Doctrine” under the Copyright Act of 1909. Decisions reached by the courts had determined that an employer held the copyright to any work created by an employee during the scope of their employment. The factors used by the courts to ascertain whether a work was created within the scope of employment included the existence of an employment contract. Since employment contracts are not typical in the US due to at-will employment, other factors that were also likely to be weighed in making the decision included: 1) who requested the work being created, 2) the time, expenses and facility used in creating the said work, 3) the nature and amount of compensation, if any, paid to the employee for the work created.

However, the Copyright Act of 1976 came into being as an amendment to resolve the weakness of the 1909 Act, address the ever growing advances in media and technology, and define specific categories of commissioned work that could be considered “works made for hire.” Although the 1976 Act incorporates some clauses of the 1909 Act, it was able to differentiate between the works created by traditional employees from those created by independent contractors. The 1976 Act removed the exclusive ownership enjoyed by an employer by subjecting the definitions ‘work made for hire’ and “employee” to judicial scrutiny. An employer can only assume exclusive possession of a work made by an independent contractor ‘if’ the said work is supervised by the employer. But the lack of clarity in the definition of who is an “employee” has led to a wide and conflicting interpretation by the U.S. circuit courts.

Most scholars have concluded that the literal interpretation of an employee as a regular, salaried employee is the correct approach. This view supported the decision of the US Court of Appeal for Columbia circuit which held that the 1976 Copyright Act radically changed the ‘work for hire’ doctrine that an independent contractor is never an ‘employee.’  Community for Creative Non-violence v. Reid (1988) 846 F.2d 1485 (D.C. Cir.) This decision was also affirmed by the Supreme Court.

Therefore, the copyright of the work created by an employee under full employment benefits of his employer belong to that employer, provided that the work done is in furtherance of the employment objective and that the employee is adequately compensated.