Watch your step with intellectual property

Entities that receive U.S. government funding for developmentprojects typically have a right to retain title to theintellectual property they develop on those projects.Although such entities might have a right to own theintellectual property, that ownership is not automatic. To obtaintitle, you must give timely notice to the contracting officer that youhave made a patentable invention and then promptly elect to retaintitle. Failure to do so can result in loss of title.That is what happened in the case ofCampbell Plastics Engineering andManufacturing Inc. v. Brownlee. InCampbell, the contractor repeatedly failed tocomply with the procedural steps necessaryfor retaining title. The Army then took titleto the patent from Campbell. This is oneexample of the need to ensure that you haveeffective intellectual property policies andprocedures in place to avoid inadvertent lossof rights.Even if you properly receive title to apatentable invention, the government mayretain a government purposelicense. It is important tounderstand how this canhappen, what it means andwhat steps you can take insome circumstances to avoid or minimizethe government license.Many people believe that if you file apatent before you receive government funding,the government does not get a licenseto the resulting patent. That is false.Anytime an invention is first conceived or"actually reduced to practice" ? that is, built? using government funds, the governmentgets a license.Actual reduction to practice meansbuilding the invention and showing that itwill work. However, it does not have towork well enough to be ready for commercializationor work according to governmentstandards. Thus, is some cases, youmight have a patentable idea, file a patentapplication and then get government fundingto build the patentable device or have itbuilt.In that scenario, because governmentfunding was used to build the device ? thatis, reduce it to practice ? the governmentgets a license. This means that even if youown a patent, the government can procuredevices covered by it from a competitor, andyou are not entitled to a royalty. Obviously,this is undesirable.In some cases, you might be able to avoidor minimize the government license. Forexample, if you have a patentable ideaand can do enough testing to show that itwill work, you might be able to documentreduction to practice at private expensebefore you get government funding. Youmight still need or want governmentfunding to refine the device and showthat it is ready for commercialization orcapable of meeting government standards.But by documenting reduction topractice using private funds, you canavoid or minimize the governmentlicense.Remember, government funding canbe beneficial, but it comeswith a cost. In some cases,the right course might be toseek other funding sources.In other cases, it could just bea question of timing in obtaining governmentfunds after a reduction to practice.The decision is somewhat fact-specific andrequires careful analysis of the legal issues.The extra effort and consideration can meana huge difference in some circumstances.