Appleton v. Bacon, 67 U.S. 699 (1862)
John North was an employee of American Book and Paper Folding Company, hired to design and improve various paper folding machines. That company ceased operation in 1857 and Bacon purchased all the patents, including one issued to North.
North kept a machine he had been working on and improved it further in 1858 before filing for patent protection and that patent issued later the same year. And, at that point North assigned rights to Appleton. One oddity – the patent office actually issued the new patent in Bacon’s name, something that the Supreme Court called “a very grave irregularity” that “has not been explained.”
On appeal, Bacon argued that he owned the invention based upon the prior employment agreement. However, the Supreme Court sided with Appleton, concluding that the keys to the invention came-about after North’s contract had ended.
Parties engaging the services of an inventor, under an agreement that he shall devote his ingenuity to the perfecting of a machine for their benefit, can lay no claim to improvements conceived by him after the expiration of such agreement.
Id. See Catherine L. Fisk, Removing the “Fuel of Interest’ from the “Fire of Genius’: Law and the Employee-Inventor, 1830-1930, 65 U. Chi. L. Rev. 1127, 1198 (1998) (“The question the Court resolved was simply one of fact: who was the inventor working for at the time he developed the patented invention?”).
* Note – the quote above comes from the syllabus of the case as issued by the court in 1862.