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Navigating Employee Inventor Rights

Navigating Employee Inventor Rights

Industry news News 30/09/2024

Understanding Employee Inventor Rights


Typically, employees of an innovative company have employment agreements specifying that the employer will own any IP created during the course of the normal duties performed by the employee or in the case of duties specifically assigned to the employee. In addition, many countries have laws which specify that in usual circumstances an employee’s invention is automatically owned by their employer. In some countries the employer is under an obligation to provide specific compensation in addition to the normal salary to an employee inventor, and in some cases, it is necessary to execute an explicit agreement between the employer and the employee inventor to ensure full transfer of ownership of the IP to the employer. 

UK Law on Employee Inventor Rights


In the UK an employee inventor may bring an action to require the employer to pay compensation for the invention in addition to the normal salary, but only if the invention now owned by the employer is of outstanding benefit to the employer.  The principle behind this aspect of the patent law in the UK is to ensure that the employee inventor will also receive a fair share of the commercial benefit that the employer receives as a result of the invention.  Deciding whether the invention is actually of outstanding benefit or not often involves considering the type of business of the employer, and the size of the employer’s market share and turnover.

The Case of David Parsons vs. Convatec


These type of disputes between an employee inventor and an employer are somewhat exceptional.  However, the UK courts issued an interim decision last month in a case between an inventor, David Parsons, and his former employer, Convatec.  The inventor claims that the invention relating to silver in antimicrobial products was of outstanding benefit to the former employer, and that the inventor is therefore entitled to additional compensation.  In this recent decision the court considered exactly how the invention should be defined.  

There were conflicting opinions about whether the invention should be defined in terms of the specific claims of the granted patent, or whether the invention should be held to be the broader general inventive concept within the patent.  In this case the court decided that the latter approach was correct and that the invention does not need to be defined by carefully reviewing the claims per se.  Instead the invention should be considered to be the core inventive realisation, rather than looking at the wording of each claim of the granted patent.

We now await the full hearing for the court to finally decide whether this invention meets the necessary criteria to be classified as being of outstanding benefit to the employer, and if so the level of compensation that the inventor will be awarded.

Key Takeaways for Businesses


Understanding employee inventor rights is crucial for businesses to protect their intellectual property and maintain positive relationships with their employees.

Key takeaways:

 - Employment contracts are essential: Ensure that employment contracts clearly outline the ownership of intellectual property and compensation arrangements.

 - Understand law: Be familiar with the specific laws regarding employee inventor rights, particularly the requirement for "outstanding benefit."

 - Communicate effectively: Maintain open communication with employee inventors to avoid misunderstandings and disputes.

 - Seek legal advice: Consult with legal experts to ensure compliance with relevant laws and regulations.

By taking these steps, businesses can effectively manage employee inventor rights and protect their valuable intellectual property.