Legal Question in Intellectual Property in California

Re: Ownership

If your friend developed this tool in the course and scope of her employment, then it probably belongs to the employer, unless her contract with them says otherwise. You say that she developed it on her own time, but one difficulty she would have is proving it--often with intellectual property, a contract will say the employer owns anything created while in their employ, not just during business hours. There is also the question why, if they didn't pay for the tool, did she develop and use it for their benefit? Your friend would have a stronger claim if she had never used it at the hospital.

Re: Ownership

The problem your friend is going to have in a situation like this is deep pockets. The hospital can afford to legally seek return of the tool, while your friend probably cannot. A suggestion is to file a provential patent to see if your friend can get some legal claim to the tool which would render the hospital's claim moot. However, since the tool has been in public use, you may have trouble obtaining a patent.

Small claims court may be an option.