Cross Border Intellectual Property Transfer Basics in Venture Formation
Cross-border IP transfers require executed assignments, local registry filings, tax-compliant valuations, and territorial licensing to protect venture capital equity.
Shop Right Doctrine
Meaning
Intellectual property law establishes an implied, non-exclusive and royalty-free license for employers to use inventions created by employees during their employment. Under the shop right doctrine, an employer acquires this license if the employee designed and developed the invention using the employer’s equipment, materials or working hours. This doctrine prevents employees from suing their employers for patent infringement over inventions created at work.
However, the ownership of the patent itself remains with the employee unless a written assignment agreement says otherwise.
Resource Usage
Determining whether a shop right exists requires assessing how much of the employer’s facilities were used. If the development occurred entirely on personal time and personal computers, the claim fails. The burden of proof rests on the employer to demonstrate the use of their operational resources.
Corporate Value
Acquiring this implied license secures the employer’s right to continue using the developed technology in their own operations. It does not allow the employer to sell or license the technology to third parties. This right protects the employer’s existing manufacturing processes from being halted by a disgruntled worker.
Employment Contract
Modern employment agreements override these implied rules by including explicit intellectual property assignment clauses. These contracts require the employee to assign all inventions developed during employment to the company. This approach provides clear ownership rather than relying on the limited protections of the shop right doctrine.