Thinking Globally: Inventor Remuneration Rights

December 8, 2017

By Scott Foley, Jessica Grover, Kelly Petrillo, Amanda Ramadan, and Peter Weatherill, all members of the foreign department of Lando & Anastasi, LLP

A granted patent will allow a patent holder exclusive rights to make, use and sell their invention for a specific period of time.  However, who owns the invention, the employer or employee?  Is an employee entitled to additional remuneration over and above their contracted payment?  For those countries that are signatories of the Paris Convention (Article 4ter), inventors have a right to be named in patent applications.  Some countries provide further rights for inventors.

As corporations are reaching across the world for innovative ideas, it is important to be aware of local laws and rules relating to inventor rights and remuneration.  While some countries allow employee/employer contracts to determine inventor rights and compensation, other countries have provided legislation to ensure fair payment to inventors by employers for inventions made during the course of employment.

In countries such as China and Japan, employment contracts are particularly important.  These contracts provide protection and guarantees for both the employer and employee in determining compensation for inventive activities.  If there is no contract in China, compensation could be determined by the courts.

In Africa and the Middle East, the trend in countries including South Africa, Nigeria, Tanzania, Ghana, Saudi Arabia, Egypt, and United Arab Emirates, is that inventors must be named in an application, but they do not have the right to be notified of any company action. With the exception of a few countries, there are no rules regarding inventor remuneration and often we see that remuneration is to be governed by the terms and conditions of the employment contract and company policy, without the interjection of country law.

Germany, Thailand, China, Hong Kong, Japan, South Korea, and other countries have remuneration rules for employee-inventors.  Thailand is notable in that its compensation rules for inventors are not applied to inventions made only in Thailand or employees/employers based in Thailand.  Any inventor of a Thai patent has the right to demand fair remuneration by lodging an action within a year of the grant of the patent.

A recent court case in South Korea highlighted the need for an employer to ensure fair remuneration even for weak or unused inventions.

Additionally, employers in South Korea, Finland, and the Russian Federation have deadlines by which they must notify employee/inventors if they intend to acquire rights to an invention.

We have researched practices in some of the mainstream IP jurisdictions worldwide and have consolidated a breakdown of the similarities and differences between them.  We will focus on 1) Inventor rights to be named in an application, 2) Inventor right to be notified of company action regarding the invention, 3) Rules or Practices regarding inventor remuneration, and 4) Employer rights.

See below table outlining employer-employee rights for inventions created at the workplace.  We always recommend contacting a local agent with specific questions.

 

Country Do inventors have a right to be named in applications? Do inventors have a right to be notified of company action (filing/not filing) regarding invention/ if company does not file, does inventor own? Are there any rules regarding inventor remuneration? Does an Employer automatically own the inventions of their employees?
Argentina (AIPPI) Yes Yes, an employee is entitled to remuneration.  The amount of payment is determined by Patent Law. Ownership depends on relationship between the employee (inventor) and employer.

In cases where the employee was hired to invent, the resulting invention and patents will belong to the employer.

In cases were the invention was made by an employee during an employment relationship, which was not primiarily based on creating invention, but the invention was made with knowledge aquired within the company or by means provided by the company, the resulting inventions will belong to the employer only if the emplpyer files a patent application within 90 days of the invention being made.

In all other situations, the invention will belong to the employee.

 

ARIPO[1] Yes No provision requires such notification. No provision requires such remuneration. It will depend on the national laws of the member state in which the application is designated. No provision provides for this. It will depend on the national laws of the member state in which the application is designated.
Australia Yes – mandatory Inventors do not have a right to be notified of company action, and if a company does not elect to file an application no automatic rights exist for the inventors No An employer automatically owns the invention of their employees if the invention was developed as part of their employment duties.

 

 

Brazil[2] Yes- Inventor should be named, however they can request that their name not be disclosed No obligation for the employer to notify the employee (inventor) as to whether or not application was filed. Employment contract can be created to stipulate this though.

Even if the employer does not file an application, the employee (inventor) does not own an invention which was developed while the contract was in force.  The IP Law also states that an invention whose patent is applied for by the employee within 1 (one) year from the termination of the employment contract shall be considered as having been developed while the contract was in force.

According to the IP Law, except when there are express contractual provisions to the contrary, compensation shall be limited to the salary agreed upon.

However, the employer may grant the inventor through an employment agreement or company policy, a share of the economic gains resulting from the exploitation of the patent.

According to the IP Law, an invention or utility model will belong exclusively to the employer when it results from a contract of work being performed in Brazil and whose the subject matter is the research or inventive activity or when the later results from the nature of the services for which the employee was contracted.
Canada (Morgan) Yes As long as the inventor is not a public servant, no additional compensation is required except if mentioned in a contract or is part of a company policy Generally, inventors own inventions except of the inventor/employee has an agreement with their employer or if the inventor/employee was “hired to invent” or if the employee/inventor is hired to produce inventions.  The relationship between the employee and employer may also impact determination of ownership.
Chile[3] Yes No. Although the rights could be regulated by a private agreement. Chilean Law does not regulate the inventor remuneration. This should be agreed between the company and the inventor.

 

No. The company owns the inventions when there is an employment contract specifying that the contract nature is the fulfillment of an inventive or creative activity.
China Yes Article 76 of the Implementing Regulation allows companies to act in accordance with their internal policy/employee contract. (Bai, 2015) If there is no legal policy or contract, per the Implementation Rules of the Chinese Patent Law, royalty payment should be not less than 2% of the business profit. (Jin, 2016)  Amended Technology Commericialization Law of October 1, 2015 sets fees based on assignment/license fees and operating profits (Bai, 2015) Per Article 6 of the Implementing Regulation, If invention is “made by an employee in the course of performing his duty”, invention belongs to employer; if invention is made “mainly by using the material and technical conditions of the employer”ownership would be determined by contract. (Feng, 2016)
Colombia[4]  Yes

 

If the inventors have transferred their rights, there is no obligation to notify them of a filing or not filing.

 

If the inventor is a company employee and the invention was developed in carrying out his duties as employee, the remuneration is the inventor’s salary. The employer may voluntarily give incentives to the inventors for their developments. No, generally, the inventors will transfer their rights to their employers through a work contract.
Egypt[5]  Yes No Yes No
Finland (International Bureau of WIPO, 2017), (International Bureau of WIPO) Yes; also a statement is required as to how the Applicant gained title if the Applicant is not an inventor. An employer must notify the employee in writing within four months of receipt of notification of an invention if they wish to claim rights. An employee is entitled to reasonable compensation. Yes, but an employer must notify an employee within four months if they wish to claim rights.
France (Patent Act 1978, as codified by the IP Code 1992) (Hogan Lovells) Yes The employer must send a copy of the patent application as filed to the Employee. In some instances, an employee might be entitled to remuneration. If an invention is made as a function of an employee’s duties, these inventions typically belong to the employer
Germany (Communication from the German authorities, 1996) (Hogan Lovells) Yes An employee must notify an employer of an invention in writing and without undue delay. If an employer does not file and does not notify the employee that the invention should remain secret, rights must be assigned to the employee An inventor is entitled to compensation if the Employer has assumed ownership of an invention.  German Law will set the amount of compensation based on the economic value of the invention and other factors. invention rights are automatically transferred to the employer unless he/she releases the invention to the employee inventor within four months
Ghana[6]  Yes. No provision requires such notification. Yes  Yes
Greece (Law No. 1733/1987 (FEK 171, A’ of 22/9/1987) on Technology Transfer, Inventions, and Technological Innovation’ (as last amended by Law No. 1739/1987 of November 11, 1987)) Yes If the invention is particularly profitable to the employer, the employee has the right to request additional compensation. If the invention is made by an employee as a result of completion of duties as per employment contract, if an invention is made with the use of information/materials provided by the employer but not as normal duties, the employer is entitled to a portion of the invention.
Hong Kong (Government of Hong Kong) Yes, Hong Kong has specific remuneration rules if a patent is granted. If the invention was made while performing normal duties or as part of the responsibility of an employee, an invention belongs to the Employer.
India (Chakraborty) (Kably, 2015) Yes Remuneration is determined soley by employment contract. Whether an invention belongs to an employer depends on the employment contract.  In the absense of a specific contract, the invention does not become the property of the employer.  Note that copyrights are handled differently.
Indonesia Yes (Indonesian Patent Law Ch. III Article 24 (2c)) Indonesian Patent Law Ch. III Article 23 (1 & 2):  applications must be filed with evidence the applicant is entitled to invention – inventor may review the application Indonesian Patent Law Ch. II  Article 12   (3) inventors shall be entitled to a reasonable compensation for invention Evidence required
Italy (Italian Code of Industrial Property (Article 64) – Leglislative Decree N°30 of 10 February 2005, Text effective as from 2 September 2010, as amended by Legislative Decree N°131 August 2010) Yes Inventors may have a right to additional compensation. If the inventive activity is a result of the duties of an employee, the invention belongs to the employer
Japan (Intellectual Property High Court) (Abe, 2016) (Sonderhoff Einsel, 2016) Yes Employees have a right to reasonable remuneration when assigning a patent to their employer or if an invention is determined to belong to an employer. For inventions made after April 1, 2016, Employer stipulates whether invention belongs to employer; prior to April 1, 2016, invention was believed to be owned by the inventor with a non-exclusive license available to the employer
Malaysia (AIIPI) Yes Depends upon employment agreement Possibly  “If invention acquires an economic value greater than the parties could reasonably have forseen at time of concluding the above contract, the inventor shall be entitled to equitable remuneration”
Mexico[7] Yes No- company is under no obligation to notify the inventor about filing/not filing

Once the invention has been transferred, company owns the invention- whether or not patent application is filed

The employee is entitled to an additional compensation depending on the importance of the invention and the benefits for the employer (provided that the employee’s salary is not proportioned with employer’s benefit).

This compensation will be negotiated either by the two parties or by the Labor Conciliation and Arbitration Board.

According to Federal Labor Law, inventions resulting from research activities and/or activities related to improvement of the employer’s processes under a labor relationship with company, will be owned by the employer.

Otherwise, in cases where inventions were developed by employees without having any labor responsibility, the ownership of the invention will stay with the inventor. However, the employer willl have a preferential right to the exclusive use and acquisition of the invention and the corresponding patents.

Netherlands Yes Employees might be entitled to additional compensation if the existing contractual remuneration is not sufficient.
New Zealand Yes – mandatory No No An employer automatically owns the invention of their employees if the invention was developed as part of their employment duties.
Nigeria[8]  Yes. No provision requires such notification. No provision requires such remuneration. No provision provides for this.
Oman[9] Yes, it is necessary to mention the inventors name in the patent application.  No There is no rule regarding inventor remuneration in Oman. No, an assignment document signed by the inventors transferring their rights to the applicant is required.
Philippines (AIPPI) Yes Employers not obligated unless in employment agreement/contract No An employer automatically owns the invention of their employees if the invention was developed as part of their employment duties.
Poland (Industrial Property Law dated 30 June 2000 ) (Hogan Lovells) Yes Employees are entitled to compensation for their inventions unless previous agreements are in place. Unless agreed otherwise, invention is owned by Employer
Qatar[10] Yes, depending on terms and agreement between the inventors and company policy It depends on the terms and agreement between the inventors and company policy To be governed by the terms and conditions of the employment contract and company policy as there is nothing written in the Patent Law specifying the relation between the inventors and applicants. To be governed by the terms and conditions of the employment contract and company policy as there is nothing written in the Patent Law specifying the relation between the inventors and applicants.
Russian Federation (Civil Code of the Russian Federation ) (Hogan Lovells) Yes Within four months of receipt of an employee’s notification of an invention, an employer must either file an application, assign rights to a third party, or inform the employee of its decision to keep an invention secret.

If the employer takes no action, rights revert back to the employee, but the employer is entitled to a compensated non-exclusive license

Employees have a right to remuneration by the Employee; Remuneration is calculated based on Russian laws. Authorship belongs to the inventor, while the right to use the invention or obtain the patent belongs to the employor
Saudi Arabia[11] Yes, it is not possible to file patent applications without listing the inventors name. The Patent Office do notify the agent/attorney only unless the inventors filed the application directly. No specific rules No.  Legalized Assignment executed by the inventors assigning their rights to applicant is required.
Singapore (AIPPI) Yes No Not unless specified in employment agreement Yes ((Section 49(1) of the Singapore Patents Act)
South Africa[12] Yes No provision requires such notification.  No – remuneration to the inventor must be discussed during licensing or assignment agreements, if the inventor is not an employee of the company. Employee inventors need not be paid. Yes – an invention made during the course and scope of employment, belongs to the company. An inventor must still sign a deed of assignment.
South Korea Yes Employer must notify employee in writing within 4 months of receipt of invention disclosure if they intend to acquire rights (Monaghan) Employees have the right to be compensated.  Companies should set up internal compensation rules. Employees have the right to raise objections to company compensation rules, and have the right to be notified of amendments. (Choe, 2013), (Monaghan)

Note:  In Supreme Court Decision Case No. 2017 2014Da220347, rendered on January 25, 2017, The Supreme Court determined that employees must compensate even on weak or unused inventions; although the amount of remuneration can be factored in determining the amount. (Lee, 2017)

Employee or Assignee is Applicant.

Under Invention Promotion Act Amendment of January 31, 2014, barring a contract or employment regulation, employee owns invention and employer is entitled to royalty-free non-exclusive license if the employee is a small or medium sized business. Employers must have an internal compensation rule, provide employee with details regarding compensation amount, consult with employees regarding amendments to internal rules, and determine compensation based on profit gain or expected profit gain.  Employee has the right to object to employee committee. (Choe, 2013)

Spain (Articles 15-20 of the Spanish Patents Act (Law 11/1986, of 20 March, on Patents –”SPA”) ) (Hogan Lovells)22,23 Yes Yes, an employee is entitled to compensation under the law.
Tanzania[13]  Yes. No provision requires such notification.  Yes  Yes – an invention made during the course and scope of the employment.
Thailand (Morrisroe, 2015) (Pornwiriyangkura, 2013) For patents granted in Thailand, Employees have a right to remuneration if the Employer benefits from invention – note nationality/residence of inventor or place of conception of invention does not matter.  Inventor has one year from the date that the inventor is aware of the grant of the patent. Employers have the right to apply for patents made by employees
United Arab Emirates[14]   Yes, depending on terms of employment contract and company policy Yes, however that would be governed by the terms and conditions of the employment contract and company policy To be governed by the terms and conditions of the employment contract and company policy. To be governed by the terms and conditions of the employment contract and company policy.
United Kingdom Yes An employee is entitled to a fair share of the benefit derived by the employer from their invention. If the invention was made as a result of normal course of duties of an employee, the invention belongs to the employer.
USA[15] Yes-inventors must be named No statutory requirement to compensate inventors. Additional employee compensation (beyond salary) is set by the employer. Some companies do choose to compensate their inventors to reward/encourage innovation. Inventor initially owns his/her invention

An inventor may assign their rights to an invention to an employer. This is often contained in the employment contract between the inventor and the employer.

In certain circumstances, in the absence of an express agreement, the common law implies a transfer intellectual property rights from an employee to an employer:

For example-  when an employee is hired to create a specific invention, inventions made by the employee belong to the employer. Or, where an invention is made using materials and equipment of an employer, the employer will usually have at least a license to use the invention.

Vietnam Yes Inventor has a right to remuneration (Pham & Associates, 1997) (Vision Associates) Employees have the right to own inventions made using their investments (Pham & Associates)

 

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AIIPI. (n.d.). Report Q183 in the name of the Malaysian Group Employers’ rights to intellectual property. Retrieved July 25, 2017, from aippi.org: https://aippi.org/download/commitees/183/GR183malaysia.pdf

AIPPI. (n.d.). Report Q183 in the name of the Argentinean Group: Employers’ rights to intellectual property. Retrieved July 25, 2017, from AIPPI.org: https://aippi.org/download/commitees/183/GR183argentina.pdf

AIPPI. (n.d.). Report Q183 in the name of the Philippine Group Employers’ rights to intellectual property. Retrieved July 26, 2017, from aippi.org: https://aippi.org/download/commitees/183/GR183philippines.pdf

AIPPI. (n.d.). Report Q183 in the name of the Singapore Group Employers’ rights to intellectual property. Retrieved July 25, 2017, from aippi.org: https://aippi.org/download/commitees/183/GR183singapore.pdf

Articles 15-20 of the Spanish Patents Act (Law 11/1986, of 20 March, on Patents –”SPA”) . (n.d.).

Bai, B. a. (2015, September 24). Inventor Remuneration: Have a Company Policy. Retrieved July 25, 2017, from Kluwerpatentblog.com: http://kluwerpatentblog.com/2015/09/24/inventor-remuneration-have-a-company-policy/

Chakraborty, S. (n.d.). AIPPI Report Q183 in the name of the Indian Group. Retrieved July 25, 2017, from aippi.org: https://aippi.org/download/commitees/183/GR183india.pdf

Choe, M. a.-H. (2013). Employers to Face Additional Hurdles for Employee Inventions: Amendment to Employee Invention Law in Korea. Retrieved July 18, 2017, from www.kimchang.com: http://www.kimchang.com/newsletter/templates/newsletter_ip_en_summerFall2013_article03.html

Civil Code of the Russian Federation . (n.d.).

Communication from the German authorities. (1996, July 1). Law on Employee Inventions (Officially: Gesetz über Arbeitnehmererfindungen). Retrieved July 25, 2017, from wipo.int: http://www.wipo.int/edocs/lexdocs/laws/en/de/de039en.pdf

Feng, C. (2016, February 16). Mondaq. Retrieved July 25, 2017, from China: Employee Inventions in China: http://www.mondaq.com/china/x/462864/Patent/Employee+Inventions+in+China

Government of Hong Kong. (n.d.). Cap. 514 Patent Ordinance – Part VI Employee’s Inventions. Retrieved July 20, 2017, from Hong Kong e-Legislation: https://www.elegislation.gov.hk/hk/cap514

Hogan Lovells. (n.d.). Patents – Law on Employees’ Inventions – France. Retrieved July 25, 2017, from limegreenip.hoganlovells.com: http://limegreenip.hoganlovells.com/article/119/patents-law-on-employees-inventions-france

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Hogan Lovells. (n.d.). Patents – Law on Employees’ Inventions – Poland. Retrieved July 25, 2017, from limegreenip.hoganlovells.com: http://limegreenip.hoganlovells.com/article/137/patents-law-on-employees-inventions-poland

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Industrial Property Law dated 30 June 2000 . (n.d.).

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Italian Code of Industrial Property (Article 64) – Leglislative Decree N°30 of 10 February 2005, Text effective as from 2 September 2010, as amended by Legislative Decree N°131 August 2010. (n.d.).

Jin, X. (2016, October 13). Case Study: How to reward and remunerate inventors in China? Retrieved 25 07, 2017, from IPWatchdog: http://www.ipwatchdog.com/2016/10/13/reward-remunerate-inventors-in-china/id=73533/

Kably, L. (2015, August 3). Startups, SMEs tardy in protecting patents. Retrieved July 25, 2017, from timesofindia: http://timesofindia.indiatimes.com/business/india-business/Startups-SMEs-tardy-in-protecting-patents/articleshow/48322777.cms

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Lee, J. K. (2017). Supreme Court Affirms Employers Have Duty to Compensate Employee Inventors Even for Weak or Unused Patents. Retrieved July 25, 2017, from kimchang.com: http://www.kimchang.com/newsletter/2017newsletter/ip/eng/newsletter_ip_en_spring_summer2017_article04.html

Monaghan, P. (n.d.). Legal Examination Employee Inventions: Who Owns, and Who Owes? Retrieved July 25, 2017, from Businesskorea.com: http://www.businesskorea.co.kr/english/oped/opinions/5595-legal-examination-employee-inventions-who-owns-and-who-owes

Morgan, B. E. (n.d.). Report Q183 in the name of the Canadian Group. Retrieved July 25, 2017, from AIPPI.org: https://aippi.org/download/commitees/183/GR183canada.pdf

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Pham & Associates. (n.d.). Frequently Asked Questions about Patents in Vietnam. Retrieved July 25, 2017, from pham.com.vn: http://www.pham.com.vn/en/publications/publications/frequently-asked-questions-about-patents-in-vietnam-1377.aspx

Pornwiriyangkura, A. (2013, May 17). Employee Inventions and Creativity: Ownership and Compensation. Retrieved July 25, 2017, from tilleke.com: http://www.tilleke.com/resources/employee-inventions-and-creativity-ownership-and-compensation

Sonderhoff Einsel. (2016, June 1). Revision of the Employee’s Invention System in Japan (as of April 1, 2016). Retrieved July 25, 2017, from se1910.com: http://se1910.com/info-center/revision-employees-invention-system/

Vision Associates. (n.d.). Who owns and employee’s invention: employer or employee? Retrieved July 25, 2017, from vision-associate.com: http://www.vision-associates.com/legal_news_detail/2/345/Who-owns-an-employee%E2%80%99s-invention–employer-or-employee

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