| In relation to Patents: as we know, patents give | | | | An employee is entitled to compensation for the |
| their owner a complete monopoly to use and | | | | invention created, if the employee can show that |
| exploit a particular inventive product or process. A | | | | the invention described in the patent is of |
| patent may be invented by one or more people | | | | outstanding benefit to the employer (in |
| and may be invented by one person and owned | | | | accordance with amended section 40 of the |
| by another. The inventor is the deviser of the | | | | Patent Act 2004). |
| invention and has a statutory right to be referred | | | | The compensation is in addition to whatever |
| to in the patent. However, the inventor's right is | | | | salary the employee was paid for the |
| second to whoever owns the invention. | | | | performance of the duties, which gave rise to the |
| If the inventor is an employee, the owner of the | | | | invention or to whatever consideration was paid |
| invention will usually be the inventor's employer. In | | | | by the employer, for the assignment of the |
| fact, section 39 of the Patents Act 1977, | | | | invention by the employee. The right to |
| provides that, an invention (whether or not | | | | compensation cannot be contracted out and the |
| patentable) belongs to an employer if: | | | | employee is not bound by any terms, that |
| It was made in the course of the employee's | | | | purport to remove this right. |
| normal or specifically assigned duties, when in | | | | Circumstances, in which a claim for compensation |
| either case, an invention might be reasonably | | | | might succeed, include where an employer: |
| expected to result; or | | | | 1) Manufactures and sells the patented invention |
| It was made in the course of the employee's | | | | itself and, after manufacturing, marketing and |
| duties (as they may develop overtime) and the | | | | selling costs are removed, makes outstanding |
| employee has, because of the nature of the | | | | profits from the sales of the product; |
| duties and the particular responsibilities arising from | | | | 2) Embarks on an outstandingly lucrative licensing |
| them, a special obligation to further the | | | | programme under the patent; and |
| employer's interest or it might reasonably be | | | | 3) Has acquired an outstanding, financially |
| expected that, an invention could result from | | | | ascertainable, advantage, because the patent has |
| carrying out such duties. | | | | barred competitors from exploiting the invention. |
| However, be careful, in all other circumstances, | | | | One thing to consider when drafting contract of |
| the invention belongs to the employee, working | | | | employment is the ancillary rights that, arise |
| under a contract of employment. So, particular | | | | depending on the location of the employees (for |
| attention must be given when defining the above | | | | example employees of a foreign subsidiary of a |
| circumstances especially in the event of | | | | UK company) or the nationality of the patents |
| employees that are allowed to work from home, | | | | (for example the rights of UK employees on |
| on part-time basis or on secondment since | | | | non-UK patents). The contract of employment |
| reference to the usual " work from the employer | | | | must address these issues accordingly. |
| premises" or "during the hours of employment" | | | | When considering the provisions addressing |
| may cause uncertainty as to when the invention | | | | creation of intellectual property/patent it is |
| was created and therefore who owns it. | | | | important also to carefully consider other issues |
| So, it is important to ensure that the contract of | | | | such as confidentiality and how to notify and who |
| employment contains the necessary provisions to | | | | will assess when an invention is patentable and if it |
| address when and how an invention is made. In | | | | is worth patenting. In both cases, the employer |
| fact, since future assignment of patent rights in | | | | must have in place specific policies addressing the |
| inventions made by the employee is | | | | confidentiality and notification issues. |
| unenforceable, the contract of employment must | | | | Another important factor is the level of seniority |
| include a job description that specifically address | | | | and specialisation of the employee in question. The |
| notification of invention and ownership of patents, | | | | provisions dealing with intellectual property will be |
| if inventing is likely to form part of the | | | | different for a receptionist contract and different |
| employee's job. If there is any doubt about | | | | again for a director in a technology company. |
| ownership, the employer should seek a written | | | | As far as consultants are concerned, if from their |
| assignment from the employee, soon after the | | | | engagement is likely that an invention may result |
| invention has been made. This may require some | | | | then, the contract for services or consultancy |
| sort of payment in addition to the employee | | | | must again address ownership and in particular |
| salary and of course an obligation on the | | | | include a requirement that the consultant notifies |
| employee to disclose the invention to the | | | | the company engaging him if and when creates |
| employer, as soon as the invention is devised. | | | | an invention. |