Physicians, Don’t Give Away Your IP to Employers

Physicians can be great inventors.  Whether it’s a mobile health (mHealth) application, a phone app, an orthopedic device, or even a new technique to handle a common medical issue, physicians are creative and innovative individuals.

However, the greatest invention/ideas, or intellectual property (IP), may not end up belonging to a physician inventor in the end. This is because a physician’s employment agreement (or employer policies) may automatically allow the employer to claim full ownership and rights in the physician’s IP.  While this may sometimes be appropriate, it can be a frustrating outcome for physicians who spend their own time and resources developing an idea. 

Even if you are a physician with no intent or desire to develop IP, it’s smart to understand your contract and your employer’s policies on such issues.  There are several concepts to keep in mind when it comes to IP ownership and contract/policy language:

1. Watch out for language where an employer claims ownership of all IP developed during the period of employment.  Such language typically requires that everything and anything a physician might develop or think of (whether alone or with others) while employed, belongs to the employer.  This includes inventions that are created on a physician’s own time away from the workplace, whether or not related to medicine.  This could be a new medical device or a football draft app for the iPhone.

Some clarifications that can protect a physician include limiting an employer’s claim to ownership of IP which is developed:

a. Using the employer’s facilities, funding, equipment, etc.

b. During employment hours

c. As part of a physician’s employment duties

d. Using the employer’s proprietary information.

If these components are present, the employer will likely have a claim to the IP, although there can certainly be negotiations between the parties to share ownership and/or royalties.

2. Be cautious of language that asks a physician to reveal all IP developed prior to employment or outside the employment relationship during the term of employment.  Often this request is tied to an obligation for the physician to give the employer a perpetual, royalty-free right to use all such IP.  This can be detrimental to the IP the physician might be trying to develop or market. It also can infringe on other contractual relationships a physician might have with regard to such IP.

3. Many IP provisions give an employer ownership of anything developed by a physician within the employer’s “area of interest,” or which is something which the employer has an interest in developing or is in the process of developing.  Not only is this language vague, but the average physician, particularly at a larger institution, will hardly know about the actual or intended research that might be occurring.  This type of language should be tied to actual knowledge.  Additionally, it’s likely that a hospital and physician might both be thinking of IP related to medicine, so using such a provision to claim ownership of physician IP is unfair.  There should still be a tie to the factors listed above in 1(a)-(d).

In addition to reviewing intellectual property language carefully, it is important to know that many states have statutes that specifically address this issue.  Be sure to check your state’s laws. Also, consider having counsel review your employer’s policies and your contract before you sign if IP issues are important to you.

You may have a great idea that could change the world or become very profitable.  Make sure you clearly understand your rights, or something you create might not belong to you at all!