As you likely know, shops rights are determined on a case by case basis and those facts are interjected into a framework or test by courts.
When determining whether a shop right exists in a particular situation, a court will consider several factors to determine whether equity and fairness should entitle the employer to use the invention without paying a royalty. These factors include “the contractual nature of the relationship between employer and employee, whether the employee consented to the employer’s use of the invention, and whether the employee induced, acquiesced in, or assisted the employer in the use of the invention.” U.S. v. Dubilier Condenser Corp.289 U.S. 178 (1933).
Shop rights are essentially nothing more than a defense to patent infringement for the employer. Some courts refer to it an implied license, while others call it a form of equitable estoppel. In either situation, a shop right is non-exclusive, royalty-free, and personal to the employer.
When there is no written agreement specific to the invention at a minimum, three general common law principles apply:
1. If an employee is not hired specifically for the purpose of inventing anything, then whatever he or she may invent during the course of employment will be owned by the employee. No implicit agreement to assign any patent to the employer arises. This general rule applies even if the invention is related to the employer’s business.
2. When an employee is hired to invent, but the employer has no more in mind than a desired result and does not give the employee instructions as to the means the employee must use to accomplish the particular result, then any resulting invention, even if related to the employer’s business, will again be owned by the employee.
3. If an employee is hired to create a specific invention and the employer can demonstrate that the means to bringing the idea into practical form were clearly spelled out for the employee, the employer will be deemed the owner of the invention where the invention is within the scope of the inventor’s employment and relates to the employer’s business.
In short, you need to bring this to the attention of the individual and plug the specific circumstances and facts of your issue into this framework as a component of the argument.
Unfortunately, in my experience, many times litigation actually has to ensue before an agreement is reached. Most of the time there is a settlement, however. With that being the case, you do not have to summarize your arguments in a letter, but it is a good idea to send a demand letter to him relative to your overall rights to the IP. This can and will be valuable evidence of your attempts to avoid the court system if you have to file suit.
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