Legal Question in Business Law in Illinois

Re: designing pencils

The first question you need to answer is whether you have an employment agreement (or possibly an employment policy which you have agreed to follow) that covers this situation. Many companies do and most that versions that I have seen (and drafted) would give the company the ownership of any invention that "relates to the business of the employer". In order to be enforceable, the agreement must complies with the Illinois statute on employee inventions (765 ILCS 1060/2)

If there is no agreement, the ownership is governed by the common law concept of "shop rights." The Institute of Electrical and Electronics Engineers has published a guide entitled Intellectual Property and the Employee Engineer (PDF file) which summarizes the issue:

"Even in the complete absence of any formal agreements between engineers and their

employers, courts will generally hold that:

1) confidential information and inventions or other creations made during the

course of employment as a normal part of job duties belong to the employer;

2) inventions made by the employee off the job, using the employee's own time

and materials, will generally belong to the employee (absent fraud, related inplant

work of which the employee might be aware, or other special

circumstances); and

3) inventions not related to work duties, but created with some nontrivial use of

the employer's time, funds or materials still belong to the employee, but the

employer has limited rights to exploit the invention without payment of

royalties or other compensation."

I hope this helps.

David K. Staub, an Illinois business attorney