Federal Circuit Looks At Intellectual Property Terms Of Employment Agreement To Decide Patent Ownership

In Preston v. Marathon Oil Co., the Federal Circuit examined the terms of an employment agreement in order to determine the owner of the patents at issue. Although aspects of the agreement were interpreted under state (Wyoming) law, the decision may be relevant to many employment agreements.

Timeline of Activities

March 2001: Preston was hired as an at-will employee April 2001: Preston signed the Employment Agreement at issue Fall 2002: Preston prepared drawings of the "Baffle System" February 2003: Preston's Baffle System was installed in three Marathon Oil wells February 2003: Marathon Oil began its patenting process for the Baffle System April 2003: Preston left Marathon Oil June 5, 2003: Preston filed his own patent application to the Baffle System (U.S. Patent 6,959,764) June 14, 2003: Marathon Oil filed its patent application to the Baffle System (U.S. Patent 7,207,385)

The Employment Agreement

The Federal Circuit decision sets forth the following portions of the Employment Agreement:

1. Definitions

   * * * *

   (d) "Intellectual Property" means all inventions, discoveries, developments, writings, computer programs and related documentation, designs, ideas, and any other work product made or conceived by EMPLOYEE during the term of employment with MARATHON which (1) relate to the present or reasonably anticipated business of the MARATHON GROUP, or (2) were made or created with the use of Confidential Information or any equipment, supplies, or facilities of the MARATHON GROUP. Such property made or conceived by EMPLOYEE (or for which EMPLOYEE files a patent or copyright application) within one year after termination of employment with MARATHON will be presumed to have been made or conceived during such employment.

   * * * *

3. Disclosure and Assignment of Intellectual Property.

   EMPLOYEE agrees to promptly disclose to MARATHON and does hereby assign to MARATHON all Intellectual Property, and EMPLOYEE agrees to execute such other documents as MARATHON may request in order to effectuate such assignment.

4. Previous Inventions and Writings.

   Below is a list and brief description of all of EMPLOYEE'S unpatented inventions and unpublished writings. MARATHON agrees that such inventions and writings are NOT Intellectual Property and are NOT the property of MARATHON hereunder. If no listing is made, EMPLOYEE has no such inventions or properties.

   [Here, Preston had written:] CH4 Resonating Manifold

   Both the district court and the Federal Circuit...