Q: Should I fight this? I was working on a patent when we sold our company

A: When a company is sold to a new owner, the new owner generally buys the whole business, including all the assets and all the liabilities. That includes all the products, all patents that go with it, all the products that are in development but not yet on the market, and all the IP that may or may not be patentable in the future. So, unfortunately, it is likely that the new owner does own the rights to whatever you were working on.

However, there are at least two ways that you may still retain the rights.

(1) With almost every sale of a company, there may be some parts of the company which are not a part of the sale. Maybe the new owner was not interested in that part, or the old owner really wanted to keep that part. In any case, the purchase agreement should identify all parts of the company that was not sold. In your case, if the IP associated with your project was excluded from the sale, then the old owner still owns the rights to it. Take a look at the agreement if there are any such exclusions.

(2) It is also possible that the old owner of the company never owned the IP to begin with, that you have always been the owner of the IP even if you did not know it, and now you still remain the rightful owner of the IP. The inventor of an invention is generally the owner of the invention, until he/she assigns the rights to someone else, or the inventor invents the invention as a part of his/her job. Who owns the invention that was invented by the inventor before the start of the employment of the inventor by the company, depends on the employment agreement and on the laws of the state. In your case, it is possible that you have fully invented your invention prior to your employment, and that the old owner of the company was the rightful owner of your invention.

In any case, if you want to pursue this, you need to reach out to a patent attorney that is also admitted in California, and that's not me.

Good luck!

A: As noted by Mr. Mlynek, the answer to the question relies on a whole set of facts. In addition to the ones he noted, it is worth asking whether this invention was relevant to what the sold company did. If this was something that you were working on largely independent of the business goals of the sold company, then you are more likely to own the patent rights.

On the other hand, if the purpose of the sold company was to commercialize the idea that you had and you were given stock in part for your contribution of this idea, then it seems that you were paid for your invention by the company and that asset travels with the company.

When you meet with a patent attorney, be sure to bring all the relevant documents on invention assignment rules, any formation documents that might have addressed your contribution of your invention, etc. Ideally you have a file with all these documents. As a general rule, anytime anyone asks you to sign a document, then it is appropriate for them to provide you with a copy of the document with your signature on it. You should keep all these papers at home in case there is a situation at work such as a layoff and you are not able to go through your work files to bring home the important papers.

Finally, I a disappointed that you seemed surprised at the claim of ownership of the rights to the invention if you were part of the group that sold the company. It seems that something as fundamental as this should have been discussed with you so that you understood the terms of the deal. Perhaps the attorney that represented you and the other sellers of the company can explain what inventions were sold as part of the sale of the company.

If that attorney does not believe the deal documents support the expansive position of the new owners of the company, then that may focus your efforts to challenge their assertion.

Kevin E Flynn