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Can my business partner be an inventor?

Inventors call me all the time and ask if their [fill in the blank – business partner, spouse, children, parents, friend, investor . . . ] can be named as an inventor on their patent application. The answer is “Only if they made an inventive contribution to the invention.”

Simply being related to someone, and even paying for the patent application, is not sufficient to name someone as an inventor on a patent application. Failing to properly name all inventors, or conversely, naming people who are not inventors under the definition of the law, may result in any patent that issues on the patent application being declared invalid. This may also be considered fraud on the Patent Office.

After telling this to the caller, the inventor then explains that their business partner did not make an inventive contribution to the invention, but the business partner will only give the inventor funding if the business partner can own part of the patent application.

There are ways, however, to share ownership of a patent application without having to name someone as an inventor. Perhaps the easiest way to share ownership of a patent application with a non-inventor is to form a business and then have the inventor or inventors assign their rights in the patent application to the business. You can set up the business however you want so that both the inventors and non-inventors have an ownership interest in the patent application.

You can even specify the percentage ownership interests each member of the business will have in the patent application. For example, the inventor or inventors can choose to retain 51% control of the business, while giving a 20% ownership interest to an investor who contributed $20,000 to the business, and a 29% ownership interest to another investor who contributed $29,000 to the business. Or you might give equal shares to everyone.

Be sure to work with an experienced business law attorney to help setting up your business.

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