Turkey: Employee Invention Fee

Last Updated: 6 March 2019
Article by Esra Baş

At the present time, it is a known fact that people who deliver solutions about problems in the technical area are usually employed in R&D departments. According to Turkish Industrial Property Code ("IPC"), technical inventions which are made by these people, are bifurcated as:

  1. Free inventions
  2. Service inventions

Pursuant to IPC Art.113, Service inventions are the inventions made by an employee as a part of her/his work at a firm or public administration or the inventions made by an employee during the employment relation, based on experience and operations of a firm or public administration. According to the second paragraph of the same article, every other invention except the service invention is accepted as free inventions.

Judicially, when an employee makes any service invention, she/he is liable for making written notification to the employer without any delay.  After that notification, the employer is able to claim full or partial ownership of that service invention. In the case that the employer claims ownership, the employee may demand a fair amount of fee.

In general;  the economic assessment of the invention, the position of the employee and the contribution rate of firm/public administration relative to making invention are taken into account during the evaluation of the fee.

Moreover, the fee which is paid for the invention to the employee working at public administration, is determined by IPC Art. 113, para 5, indicated as "the fee has to be more than one-third of the incomes acquired from the invention. However, if the invention is used by the public administration's itself, the fee cannot be more than ten times the monthly net fee of the employee. "

On the other hand, there is no legislation about the invention fees for the other employees, except IPC Art.113; and in IPC, it is said that fee tariff regarding employee inventions and arbitration process will be drawn up by regulations. Therefore, in 29th of September 2017, "Regulation In Respect of Employee Inventions, Inventions Made In Higher Education Institutions and Inventions Occurred In Administratively Supported Projects" ("Regulation") enters in force.

In this Regulation,  Article 10 and the rest are related to the determination of invention fees. Like as IPC, according to that Regulation,

  1. Economical value of service invention
  2. Assigned position of the employee
  3. Contribution rate of firm/public administration relative to making invention are taken into consideration while determining fee amounts.

Moreover, some formulas, ratios and coefficients regarding invention fee tariff are prescribed in the Regulation. Therefore, in case of full ownership claim by the employer and fee demand by the employee,  a one-off encouragement award and a separate fee evaluated according to formulas in the Regulation would be paid by the employer to the employee.

Besides, in case of partial ownership claimby the employer, a fee would be paid to the employee in exchange for the usage of  invention by the employer.

Furthermore, demanding a fee in exchange for the ownership of invention right of the employee is reserved each time. At the time employee request a fee in exchange for his/her invention, it is eligible to assure payment by writing a receipt, for providing a basis to employee's assignment while the employer is appling for the patent. On the other hand, paying a fee to the employee for the invention is not a legal prerequisite for starting patent application process.

The Regulation and IPC should be interpreted together since defrayal of invention fee is conditional upon employee's request although the articles about setting fee amount have a peremptory structure in the regulation. After this dual interpretation,  there is a generated conclusion that  "appointing a fee for employer's ownership of the invention or not is left to parties' discretion and if the parties settle with fee payment for invention to employee, that fee should be calculated with respect the formulas on the Regulation. "

According to the Regulation the invention fee will be calculated as follows:

Fee amount = 'Received value arise from the invention' x 'Legal Coefficient of the Group where the invention belongs in' [F= RV x LC]

 

In case that the invention is used by the Firm,'Received value arise from the invention' is calculated by method of comparison with similar products, deduction of incomes and expenses or determination of approximate sale value if it had to be imported. On the other hand, if the invention is not used by the Firm, 'Received value arise from the invention' will be determined considering the sale price, the licence fee or the trade value of the invention.

'The Group'  takes place in the formula is determined according to the definitions in the 20th article of the Regulation:

1st Group:The inventions which are regarding the subjects that are not directly related to the assigned position of the employee, which are with the occasion of a task that employee takes on by herself/himself and which occur without any support or contribution of the firm.

2nd Group: The inventions which are not directly caused by the employee's assignment of firm nevertheless which are produced for meeting a need or for solving the problems which are ascertained by the firm or the inventions which occur with the contribution of the firm.

3rd Group: The inventions which are directly related to the assigned position of employee in the firm and which occur with the full contribution of the firm.

'Contribution of the firm'means that technical tool and equipment support, energy and raw material support and firm's equipment which are very effective for producing the invention.

Moreover,'the legal coefficient of the group' in the formula is determined with respect to the table in Regulation, Article 21. According to the table, the legal coefficient decreases inversely proportional to the obtained incomes from the invention.

The method of payment is specified in the 22nd Article of Regulation.  According to that, the fee is calculated considering the coefficient of net minimum wage at the recognition period of  the received value arise from the invention by the Firm; and it is paid annually unless otherwise stated in a contract. When fee remitting is determined in periods exceeding one year, fee calculation is made with regard to the net minimum wage at the payment time.

In case that the invention made by multiple employees, each one's fee is determined by multiplication of calculated total fee with contribution rate of related employee.

Finally, in Article 24, general arbitration process is anticipated in case that employer and employee cannot agree in 2 months upon the incompatibilities related to fee amount or payment method; and upon conflicts regarding this Regulation.

August 7, 2018

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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