Federal Circuit Finds Employee Assignment Obligations Do Not Cover Pre-Conception Ideas

In Bio-Rad Laboratories, Inc. v. ITC and 10X Genomics Inc., No. 2020-1785 (Fed. Cir. Apr. 29, 2021), the Federal Circuit held that employment agreement provisions to assign IP, including “[a]ny and all ideas . . . inventions, discoveries . . . that [an] Employee conceives, develops or creates” during the term of employment and “[a]ll inventions (including new contributions, improvements, designs, developments, ideas, discoveries”  conceived, developed or reduced to practice during the term of employment, were inapplicable to ideas that did not reach conception during the term of employment, even when those ideas later developed into a patentable invention.  The dispute over the employment agreements arose when Bio-Rad relied on them as a defense to alleged infringement of 10X’s patents, arguing that they were a co-owner of the patents based on the obligations set forth in the agreements. In particular, Bio-Rad argued that the inventors of the 10X patents were under an obligation to assign a co-ownership interest in the patents because the inventors conceived the idea during their employment at Bio-Rad.  The ITC disagreed and found that Bio-Rad was not a co-owner of the patents because the obligation to assign was limited to the term of employment and the invention was conceived subsequent to the departure of the employees from Bio-Rad.  The Federal Circuit affirmed the ITC ruling, finding that the agreements at issue only covered subject matter that reached a protectable level of development during the course of employment.

The full opinion is here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1785.OPINION.4-29-2021_1770917.pdf