Yes, I should have known better... but a few questions...

Someone came to me with an idea for a physical product. I agreed to work with him for an hourly rate (not under any contract). I helped with some of the work until I realized that I was adding way more value than an hourly rate. Negotiated some equity, but nothing under legal paperwork. I completed all of the design work and worked with his attorney for the utility patent (not paid).

I was not included on the patent... is this legal?

likehelpful
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If you’re performing work for pay there is an implied contract.

If you want to be a co founder I agree it’s a good idea for you to take that initiative to present an agreement.

If you haven’t already, ask him if you can be in the patent, Better yet just put your name on it - I mean it is yours and you’re writing it so just do it. if he says no then you might consider quitting. You’ve got good experience patent writing now, you can go do one on your own.

If you have no contract, I presume that means no noncompete or NDA.

If I had to take a guess, your partner is an “idea guy” and doesn’t get the purpose of writing things down. And his paranoia might be because he is is making assumptions - which happens when things aren’t laid out in writing.

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It is not necessarily illegal since you didn’t have a contract in place. You could hire an attorney and attempt to litigate but you’re in a really bad position without any legal binding documents. Have you asked this person if they are willing to add you onto the patent and they are refusing?

Personally, I think you have a better shot to have them legitimize the equity they’ve offered you as opposed to getting your name added to the patent. This would be my priority and if you have something in writing you may have a better shot at this angle.

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Doing the work of others, and being an inventor who contributed novel ideas, may or may not be the same thing. If you feel that you contributed as an inventor and can justify it with documentation, then it’s in your and the client’s best interest to do so. A patent that doesn’t list all inventors can be contested by a competitor, or other interested party, and be found invalid.

To add a little more context... still working together and the design has progressed (my work). It's still just the two of us and I am doing all of the actual design/engineering work and he is funding it without much valuable input on the design or progress.

What threw up red flags over the last few months is that he believes that everyone else is after him when we were looking for others join the team or contractors, things that dont make sense. If he believes that everyone is after him and we don't have a contracts or actual agreements in place... is he trying to pull one on me?

Look at it from a completely outsider perspective, based on info you’ve provided here - things are not going well and you need some legally enforceable contracts in place if you hope to get anything from this other than hourly rate compensation. It’s that simple, stop asking people if you should proceed on good faith, you know the answer and it’s no.

The two parts seem to be 1. Some stake in this effort that would allow you to get an upside if the initiative gains traction. I agree this is the priority task. You need to work with an attorney to figure out what that looks like to make all involved happy. If the work you are doing is not already organized under some corporate structure yet, you could sell the benefit of formalizing ‘the company’ to also include clearly articulating your role as a contributor.

Regarding 2. The patent. I wouldn’t bother with this until you settle #1 first. Others had good input on this topic. If you never settle #1, you need to figure out what being on the patent will get you in the long run.

I’ll end on this, I’m assuming that the work you are doing right now is just an idea. If you have no customers or revenue (ie. actual success) yet and this person is this cagey - they will only get worse if the idea takes off. So settle it now or move on to something else and don’t make this same mistake of not agreeing to legal/contractual agreements before doing meaningful work.

likehelpful

Generally the IP are owned by the business itself not individuals or at least that’s what our experience is. Also you can enforce oral contracts at least in CA but obviously you should get something in writing

Haven’t seen the direct patent law answer yet, so I’ll touch on that. Briefly, what you have written does not necessarily tell me that you should be an inventor. The question of inventorship turns (loosely stated) on whether you made your own creative, original contributions to the tech that you filed on. If you are an inventor without an obligation to assign, you are also an owner of the filing. But I agree with others this might not be an easy point to fight out and it would be easier to simply ensure you get your desired payday. That said, inventorship errors can be asserted as grounds to invalidate any issuing US patent, though the issue can often be corrected.

Did you think of the idea for this product? If not then how are you the inventor? Working on it makes you a contractor for hire but not the originator if the invention that is being patented.

He had the general idea and he worked with two others that had essentially napkin sketches that did not work. I have solely gone and designed it from scratch and have changed the design drastically from the original idea. I have also created a new strategy and positioning of the brought with a few product extensions. Again, this was done while not getting paid, just non-legal agreement of a portion of the equity.

At this point, if the work is not finished, just leave them and delete everything you did from their environments (if possible). If they release something you did for them you may be able to take legal action if you can prove that this thing is your intellectual property (not sure about that, but as far as I know since there is no contract in place, they actually don't have the right to own your stuff and takeover you IP). From what you said, they will not be able to continue your design/engineering process.

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