United States v. Dubilier Condenser Corp.
289 U.S. 178 (1933)
- Dunmore and Lowell worked for the US Dept. of Commerce (Bureau of Standards). They did testing and research related to radios. As sort of a side project, and without any direction from management, they ended up inventing a few improvements to radio technology.
- Dunmore and Lowell applied for and were granted a patent for their designs. They then sold Dubilier an exclusive license to use the patents.
- Turns out, the Bureau of Standards expected that any patents that came out of Dunmore and Lowell’s work would be assigned to the US, and not be kept by the inventors.
- The US sued Dubilier, contending that Dunmore and Lowell never owned the patents and could therefore never have sold a license to Dubilier.
- The Trial Court found for Dubilier. The US appealed.
- The Trial Court found that Dunmore and Lowell were compelled to make their inventions “solely by their own scientific curiosity,” beyond the specific problems they were authorized or directed to work on.
- The Appellate Court affirmed. The US appealed.
- The US Supreme Court affirmed and found that Dunmore and Lowell were the rightful patent holders.
- The US Supreme Court agreed that in general, one who is employed to make an invention is bound to assign his employer any patent obtained.
- However, when the employee is not specifically hired to invent things, but comes across an invention in the normal course of his employment, then the employee gets the patent, but must allow the employer to use the patent without having to pay royalties.
- “Since the servant uses his master’s time, facilities, and materials to attain a concrete result the latter is in equity entitled to use that which embodies his own property and to duplicate it as often as he may find occasion to employ similar appliances in his business. But the employer has no equity to demand a conveyance of the invention, which is the original conception of the employee alone, in which the employer had no part.”
- The right of the employer to use the patent is called a shop right.
- Since Dunmore and Lowell were not employed to invent things, any invention they come up with is their own. However, they can’t deprive their employer (the US) from using the patent royalty-free.
- So they can’t sell exclusive rights to Dubilier.
- In a dissent, it was argued that Dunmore and Lowell had been hired to do research, so it was wrong to conclude that they hadn’t been getting paid to invent things.
- Although this case remains good law for private employers, 37 CFR 501.6 came along which gives the US all the patent rights to inventions made by Federal employees during work hours or using government equipment/facilities.
- 35 U.S.C. §261 allows for people to assign patent rights. Most private employers require all employees to sign written agreements to assign all patent rights to their employer as a condition of employment.
- In this case, the US Supreme Court was unwilling to infer that such an assignment had taken place. The assignment must be explicit.