Patents as Community Property?

H and W are married. W invents something, and gets a patent.  They divorce.  W sues  accused infringer on the patent.  In response, accused infringer takes a license from H for a buck-fifty.  Result?

From what I’ve seen over the years, a patent practitioner would say, “the invention is entirely W’s.”  Also from what I’ve seen over the years, a divorce attorney in a community property state would say exactly the opposite. (Washington state has (or at least had) some even more interesting statutes about ownership of stuff developed by couples in business together.)

Y’all have fun with this draft article on an issue I should publish on but haven’t gotten around to that relates to competency in prosecution.  Somehow, someway, we all think W should own all of the invention, but I’m not sure a state court would say so….

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.

49 thoughts on “Patents as Community Property?

  1. 4

    Sorry, all, with the switch to the new blog, I was getting “approve every comment” notices, now I’m not getting notices that comments are posted.

    This one is tough — comes down to, I think, preemption. I’d argue (not sure I’d win) that because patent law must preserve to inventors their rights, that state law that immediately diluted those rights was unconstitutional. Now, that gets into other problems — can state law *ever* make patents CP?

    I don’t know. I just know I don’t know. See Donald Rumsfeld.

    1. 4.1

      Preemption may apply if the law recognizes the aspect of the property as one that such a preemption would apply.

      It does not – not for the purpose under discussion (note that standing and the employer/employee relationship is particularly not at point here, so the Stanford case is inapposite).

      See the case cited by Ned – note how the two examples (military pay and Railroad benefits) each had explicit laws treating the property differently than ordinary personal property. Then note not only the absence of such treatment in patent law, but the fact that patent law explicitly (and only) states that patents are to have the attributes of personal property (and not, personal property except…). Finally, check out what Chisum has to say on patents as property and ownership issues (chapter 22 in his treatise).

      1. 4.1.1

        anon, “standing is not an issue here” — is the basis for dismissing Stanford v. Roche? I think that the inventor owns the invention was necessary for the ultimate holding in that case.

        But, if you think otherwise, please explain.

        1. 4.1.1.1

          Ned, the issue in Stanford was whether the inventor was the first in line (as opposed to the university due to the Bayh-Dole act).

          As you would say, trust me.

          How is your Chisum reading coming along?

    1. 3.1

      Who owns the invention?

      Nobody owns the invention. The invention isn’t property.

      Let’s ask some better questions:

      Who has the right to apply for a patent on the invention, and the ability to assign that right?

      During the marriage, who has the right to license out the invention or assign an interest in the patent?

      More generally, does it make sense to retroactively extend community property-imposed concepts of shared ownership back in time to before the end of the marriage? Or is community property merely a way of calculating how much value goes each way when the marriage fails?

        1. 3.1.1.1

          I think IANAE was playing with words, implicitly differentiating between invention and patent.

          Why? Just being IANAE.

        2. 3.1.1.2

          If someone has an assignable right then, I think of of that right as property.

          Most of us do, and it’s a refreshingly pragmatic view to hear from a professor, but it’s not strictly correct. Lots of balance sheet-type items are assignable but not technically property, like receivables and other claims, leasehold interests, licenses, even cash.

          If we’re delving into technicalities and oddball fact scenarios, we might want to make sure we have every last detail straight.

          On the other hand, if we’re going to be casual with terminology, I think it only makes sense to consider that the “owner” of the invention is the person entitled to be an original patent applicant. Does it make any sense for it to be otherwise?

          1. 3.1.1.2.1

            Am I the only one who chuckles at IANAE asking to “might want to make sure we have every last detail straight“….?

            (I don’t think so)

          2. 3.1.1.2.2

            IANAE, imagine that a wife shows up at the PTO one day and files a patent application on an invention made by her husband, where he refuses to cooperate. She is not the inventor and she does not have an assignment or a power of attorney.

            What would the PTO do?

            1. 3.1.1.2.2.1

              What would the PTO do?

              Ignore her, most likely.

              Now, supposing she asks your advice on how to demonstrate to the PTO’s satisfaction that she is entitled to proceed with the application, invoking her state’s community property regime. What, if anything, can/should she do that doesn’t require her husband’s cooperation?

      1. 3.1.2

        Answer: the inventor. Bd. of Trust. of Leland Stanford v. ROCHE SYS., 131 S. Ct. 2188, 563 U.S., 180 L. Ed. 2d 1 (2011).

        Now, how did the wife obtain title to the invention without an assignment?

        1. 3.1.2.1

          Ned asks “how did the wife obtain title to the invention without an assignment?

          1) It is a hypothetical situation. The California case failed for a technicality.

          2) The Stanford case is inapposite. That case did not deal with the same type of legal mechanism as might affect personal property in a communal law state.

          1. 3.1.2.1.1

            anon, who owns an invention is exclusively a matter of federal law.

            Community Property is about property acquired during a marriage.

            Clearly to the extent that Community Property law would interfer with and be inconsistent with federal law, it is preempted and federal law applies.

            Thus, if an inventor assigns his patent to a married Californian, Kalifornia community property law would apply. But until the inventor assigns, he owns the invention and the patent.

            I am confident that if put to a test, this would be the outcome. Any Kalifornia cases to the contrary are not reliable on the issue of preemption.

            1. 3.1.2.1.1.2

              Thus, if an inventor assigns his patent to a married Californian, Kalifornia community property law would apply. But until the inventor assigns, he owns the invention and the patent.

              With respect to community property laws, Ned, how is an assignment to a married person different than an initial grant to a married person?

            2. 3.1.2.1.1.3

              anon, Prof. Hricik notes that virtually all cases in all jurisdictions operate on the presumption that a patent is community property without more.

              The issue has never been litigated and decided by a federal court nor even seriously by a state court.

              But trust me, property acquired in exchange for separate property remains separate property.

            3. 3.1.2.1.1.4

              Ned asks “But trust me

              Ned, I do not trust you with patent law, an area that you at least have some familiarity with. I sure as shoot will not trust you with general property law.

              You do not even show the beginnings of understanding of marital property law with your advancing of a dependence on acquisition.

          2. 3.1.2.1.2

            anon, David simply concludes that a state court would conclude otherwise.

            But when it comes to who owns the invention and what that means, the matter is federal. Whether the infringer gets a license from a spouse is also federal. If it were otherwise, we would have a Balkanized patent system.

            1. 3.1.2.1.2.2

              As for Balkanized patent system, I recommend that you read up on Chisum on patents and the state law effects.

              (hint: we already do have Balkanized patent system in many respects)

          3. 3.1.2.1.3

            LB, “property acquired” is property acquired in exchange for consideration.

            If acquired in exchange for community property, it is community property.

            If acquired in exchange for separate property, it is separate property.

            Imagine that I recorded a deed for my separate property. Did that separate property become community property.

            The question then is, who owns the invention. That issue is a matter of federal law, not state. The registration or protection of the separate property by the PTO does not change separate property in to community property.

            State decisions to the contrary need to be challenged in federal court.

            1. 3.1.2.1.3.1

              Ned,

              Help me out and show a start for your position with some basis of treating personal property differently than treating personal property.

              Note, that this is not a standing issue that I am asking about.

              Think a little before you respond.

            2. 3.1.2.1.3.2

              If acquired in exchange for separate property, it is separate property.

              Ned, let’s say you’ve been married for 10 years and you then conceive an invention and file for and receive a patent, using monies from your joint checking account to pay the attorney and the government fees. What “separate property” did you exchange for that patent?

            3. 3.1.2.1.3.3

              LB, good question.

              I would research cases on improvements to separate property made from community property and what rights such gives to the spouse.

              Take building worth 1 million, separate property. The husband uses 1 million community property to add improvements. The building is sold for 10 million.

              Does the wife get back 1 million or does the wife get back 5 million?

            4. 3.1.2.1.3.4

              I would research cases on improvements to separate property made from community property and what rights such gives to the spouse.

              Why would you do that? What’s the separate property that has been improved?

            5. 3.1.2.1.3.5

              LB, the invention itself is the separate property of the inventor. The money’s he spends to protect it do not change the character of the property.

              Imagine a house that is separate property. It is damaged. I sue, but use community property to pay for the lawyers. Are the damages received from the suit now community property? Is the house community property? Or, does the community property estate simply get reimbursement for the monies advanced?

              Ditto inventions and patents. It all goes back to who owns the invention. That is a question of federal law. See, McCarty v. McCarty, cite posted elsewhere in this thread.

            6. 3.1.2.1.3.6

              Ned states “The money’s he spends to protect it do not change the character of the property.

              And here’s the important part: the character of the property is…

              .

              …wait for it…

              .

              …wait…

              .

              …wait…

              .

              …personal property. Personal property unlike that which Ned cites a case for. Personal property exactly like any other personal property (of which is fully subject to the state law actions.

              Ned,

              Have you checked out Chisum on Patents yet? Let me know what you find there. Chapter 22, if memory serves me right.

        2. 3.1.2.2

          The US Supreme Court on how Kalifornia community property laws are preempted by federal statutes.

          Federal pensions authorized by statute and intended to reach the beneficiary are not community property.

          Likewise, damages for injury to a person are not community property.

          And certainly, inventions are not community property, otherwise a spouse would have the right to apply for a patent without the partner-inventors consent or cooperation — simply by naming his or her partner the inventor.

          1. 3.1.2.2.1

            Ned, your reply of “And certainly, inventions are not community property, otherwise a spouse would have the right to apply for a patent without the partner-inventors consent or cooperation — simply by naming his or her partner the inventor.

            is off in several regards.

            1) a bald statement of what is (or rather what is not) community property.

            2) confusing inventorship and ownership

            Sorry, but you will not earn my trust with these methods.

            1. 3.1.2.2.1.1

              anon, I confuse nothing. Read the McCarty v. McCarty case. The issue under federal law is whether allowing a spouse ownership of an invention is preempted.

              Under state law, is a invention separate property or community property? Proceeds from tort suits for damage to a person is separate property. I would think that inventions would qualify for separate property status for the same reason.

            2. 3.1.2.2.1.2

              Under state law, is a invention separate

              Wrong question Ned – you conflate invention and ownership – as I pointed out to you.

          2. 3.1.2.2.2

            McCarty v. McCarty, 453 US 210 – Supreme Court 1981

            Egad, I, omitted the citation.

            We really need some way of editing our posts.

            Also, I uses Windows 8.1, and have a problem that in order to see new posts in Windows 8 IE, I first have to clear delete browsing history using Internet Options. This is a fairly new problem that cropped up in the last few days. I have the same problem in multiple computers, so it is a problem either with Windows or with this site.

            Anyone else?

            1. 3.1.2.2.2.1

              Ned,

              The McCarty case is also inapposite (at best) and works directly against your views (at worst).

              This (like the Federal Railroad Act – from the decision “ The “critical terms” of the federal statute relied upon in reaching that conclusion included provisions establishing “a specified beneficiary protected by a flat prohibition against attachment and anticipation,” see 45 U.S.C. § 231m”) has EXPLICIT law written that the patent law explicitly does not. Notwithstanding an absence, though, a two fold inquiry is detailed. The military law referenced was also different than patent law (“ several features of the statutory schemes governing military pay demonstrate that Congress did not use the term [personal entitlement] in so limited a fashion”)

              Once again – the Patent law only (and try to grasp this) ONLY says that patents are to have the attributes of personal property. That’s it. There is no such detailed law for patents as there is for the military item in the case you cite, nor the Railroad benefits as mentioned in the military case. None.

              Previously I asked you to supply a legal basis for treating this personal property differently than other personal property. In supplying Case law for specific – and enunciated property that has detailed law for its treatment – you have actually made the case against your position.

            2. 3.1.2.2.2.2

              anon, I already answered. The Stanford v. Roche case. The inventor is vested with title to the invention under Federal Law.

            3. 3.1.2.2.2.3

              Ned retreads already rejected grounds with “anon, I already answered. The Stanford v. Roche case

              Sorry Ned – that is inapposite.

              Try something else.

              (and you are still confusing inventorship and ownership, while ignoring the fact that marital property does not require a transfer like that of employer/employee)

    2. 3.2

      All, did you know that the basis in the case law for the automatic assignment of continuations is an original assignment assigning the invention?

      1. 3.2.1

        Yes Ned – that follows from awhat a continuation is.

        Did you know the status of a Continuation-In-Part? (it’s an easy question).

        How goes your Chisum review?

          1. 3.2.2.1.1

            Oh, I have made my point already Ned.

            I am just waiting for you to recognize the point and acknowledge it.

            Be a dear and comply already. You know I am right in this discussion and it is OK to admit it.

            1. 3.2.2.1.1.1

              Well anon, if you have no case cites, or any quotation from Chisum to support your dissenting position, we can take this up when an if the opportunity arises in the future.

              Until then, I for one will assume the inventor owns the invention and deal with him or her exclusively.

              When a divorce is involved, it is entirely possible for the court to award the wife or husband a joint interest in issued patents. If they do not, res judicata.

            2. 3.2.2.1.1.2

              Ned – you quite miss the point and (once again) conflate inventorship with ownership.

              You do know how to use legal reasoning, right?

              Try it with the material I have presented.
              Try it with how I dismantled the case cite you provided.
              Try it with your reading of Chisum.

              For the love of law – try it.

          2. 3.2.2.1.2

            Still waiting Ned.

            Why do you pick up and run every time things get interesting?

            Here, this is not a 101 question, so I struggle with why you refuse to explore the concept of a patent as a mere item of personal property. Clearly, patents fail both the direct correlation to military pensions or railroad benefits as well as the two-step analysis (keeping in mind that we are not discussing just who is first in line).

            My directing you to Chisum is an effort for you to appreciate that it is just not I (even though I do wield impeccable legal logic).

            Come back soon my friend.

            1. 3.2.2.1.2.1

              anon, a patent is personal property by statute. But whether it is community property depends upon how it was acquired.

              Do you agree with this much?

            2. 3.2.2.1.2.2

              Ned,

              There is nothing that dictates what you say.

              It is your turn to somehow provide a legal citation that once obtained, the personal property that which is a patent is somehow different than any other personal property.

              Please note that you need to be careful in your continued efforts of conflating the first in line scenario, and the treatment of the item once it has been designated as personal property.

              Feel free to delve into more detail into the case that you cited – and my taking apart your view based on that case.

              Feel free to delve into Chisum and his explanations in chapter 22 of how the patent property is merely a personal property.

              Feel free to recognize the sheer superiority of my position.

  2. 2

    They divorce. W sues accused infringer on the patent.

    If things are happening in that order, and the divorce proceedings don’t settle the question of who owns the patent or has a claim to future licensing revenue, that’s not a problem with patent law, or with property law. It’s a problem with the particular divorce case. That’s what the California case really stands for.

    Besides, anybody careless enough to co-own an intangible property with an ex-spouse deserves whatever happens to them.

  3. 1

    Somehow, someway, we all think W should own all of the invention

    I disagree.

    When Congress wrote the law that designated a patent as having the attributes of personal property, they did not write “except…“. Personal property is personal property. If a State has under its constitutional (and federal constitutional) powers the ability to regulate personal property such as related to marital assets and other personal property, I do not see the legal basis for thinking otherwise.

    The California “almost worked” case did not work only because a technicality removed the issue from consideration.

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