Law journals have loads of cases in which employees and employers have legal battles about the rights to inventions developed by the employee. According to experts, common law provides that the employer may assume title for those inventions developed within the scope of the individual's employment, particularly if "inventing" was included in the job description. In the absence of a contract, ownership of an invention that is outside the scope of the inventor's employment belongs to the inventor, but the employer is given "shop right," or the license to use the invention without paying royalties. If the invention was developed without the employer's resources and is outside the realm of the employer's business, the employer has no rights whatsoever to the employee's invention
To these disputes and the resulting litigation, the "work for hire" clause was introduced into employment contracts. Such agreements supersede the common law and clear up the misunderstandings regarding the exact nature of the employee's work responsibilities.
A "work for hire" clause entitles the employer to take ownership of all ideas, inventions, and discoveries made by the employee as a condition of employment. It is not uncommon to include a clause in the contract that states that employees agree to sell for the sum of $1.00 any inventions, ideas, and/or improvements developed during the term of employment which relate to products, methods, designs, and equipment used by the company or any of its subsidiaries. The following is an example of a "work for hire" clause:
_____________________________________ hereby certifies that (the "Work") was specially commissioned by and is to be considered a "work made for hire" under the Copyright Act of 1976, as amended, for ____________________________________ ("Company"), and that Company is entitled to the copyright thereto.
Without limiting the foregoing, for good and valuable consideration, receipt of which is hereby acknowledged, the undersigned hereby assigns and transfers to the Company, its successors and assigns, absolutely and forever, all right, title, and interest, throughout the world in and to the Work and each element thereof, including but not limited to the copyright therein, for the full term of such copyright, and any and all renewals or extensions thereof? in each country of the world, together with any and all present or future claims and causes of action against third parties arising from or related to the Work and the copyrights therein, and the right to use and retain the proceeds relating to such claims and causes of action.