Turkey: Employee Inventions And Designs Under New IP Code

EMPLOYEE INVENTIONS AND DESIGNS

Employee inventions and designs are one of the main areas of intervention of the new Code of Industrial Property 6769. The new code substantially modifies the now repealed Decree-Law 551/1995 on Patents and Utility Models. The modifications brought on employee inventions are structural.

Although the new rules on employee inventions are detailed and precise, they are open to interpretation.

LEGAL PROVISIONS

Under the new code, employee designs and inventions are addressed under separate but largely parallel provisions:

  • Book 3, Chapter 4 on Employee Designs; and
  • Book 4, Chapter 5 on Employee Inventions.

The 24 April 2017 regulation issued under the new code contains no provisions on employee inventions or designs.

The ad hoc regulation exclusively concerns employee inventions and establishes the criteria and parameters to determine:

  • the fee to be paid to employees;
  • the modality of payment; and
  • the rules of arbitration in case of disagreement.

EMPLOYEE INVENTIONS

Applicable solely to patentable inventions

In contrast to the repealed Articles 16(1) and (2) to 33 of Decree-Law 551/1995 – which distinguished between patentable inventions and non-patentable technical improvements within the context of employee inventions – the new IP Code is silent on non-patentable technical improvements. Accordingly, under Article 113(1) of the code, employee inventions are restricted to patentable inventions only.

Service and free inventions

The code distinguishes between service and free inventions and regulates employee inventions according to this distinction, which constitutes the main regime applicable by default and, unless otherwise specified, to private and public sector firms.

Employee invention regimes

While retaining the basic distinction between service and free inventions, the new code provides separate regimes for inventions made:

  • by higher education bodies (Article 121); and
  • during publicly supported projects (Article 122).

The code provides three different regimes for employee inventions depending on the context in which they have been made.

Freedom of contract

The contractual relationship between employers and employees is based on the 'freedom of contract' principle. According to the code, employers and employees can freely determine the terms of their contractual relationship.

Statutory imperative provisions

Under Articles 117(1) and (2) of the code, employers cannot enter or make any factual implementation that would breach the legal provisions on employee inventions or contravene employee interests.

An agreement between employers and employees is deemed null and void if it is:

  • greatly unfair; or
  • in breach of the legal provisions on employee inventions (Article 117(2)).

Requirements

As specified under Article 113(1) of the code, to qualify as an 'employee invention', an invention must be realised:

  • in the course of an employment relationship – this implies a contractual relationship, as the law is silent on formal written employment contracts;
  • between an employer (ie, a private firm or a public administration body) and an employee (including students and unpaid interns); and
  • during an assignment that the employee is obliged to conduct – this implies that the employee's assignment is carried out on the employee's premises, as the law makes no reference to where work is conducted.

An invention may result from the nature of the employee's work or be based largely on the employer's experience and activities.

EMPLOYEE DESIGN REQUIREMENTS

As specified under Article 73(1) of Book 3, Chapter 4 on Employee Designs, to qualify as an 'employee design' a design must be realised:

  • in the course of an employment relationship;
  • between an employer and employee; and
  • during an assignment that the employee is obliged to conduct unless the contrary is understood from an employment contract.

The design may be the result of an employer's work assignment or based largely on the experience and activities of the employer.

Article 73(4) of the new IP Code provides that designs realised within the context of a contract to perform work which remain outside the scope of an employment relationship are subject to the terms of the contract between the parties. Article 73(3) will apply to designs realised by teaching staff, students or interns during scientific research and activities.

Service inventions

Under the new IP Code, service inventions impose reporting obligations on employees, including making an invention declaration to their employer in written form without delay.

Under Article 115/1 of the ad hoc regulation, employers can claim full or partial ownership of an invention within four months of notification by the employee. The employer's reply must be in written form. An invention is deemed to be a 'free invention' if the employer:

  • does not reply within the statutory deadline;
  • does not claim ownership of the invention; or
  • claims partial ownership of the invention.

Service inventions also result in an employer obligation to apply for a patent on claim of full ownership.

Employers must convert an invention into a free invention at the employee's request for countries in which the employer does not wish to obtain patent protection. Employers must provide the necessary assistance to an employee to enable him or her to make the declaration of invention.

Employers must pay such a fee after having claimed full ownership of an invention.

FREE INVENTIONS

An invention which is not a service invention under Article 113/1 of the new IP Code is deemed to be a free invention.

Free inventions are subject to reporting obligations for employees, who must make a declaration of invention to their employer if the invention is realised during their employment contract. The declaration must provide information on the invention and how it was realised in order to permit the employer to assess whether it can be considered a free invention. There is no reporting obligation if an invention cannot be obviously exploited or used within the employer's field of activity. Employers can object to employees qualifying an invention as a free invention. Objections must be in written form and filed within three months from the date on which the declaration of invention was notified to the employer.

No service invention without claim of full ownership

The requirements for service inventions are:

  • an employer's written explicit decision;
  • a claim of full ownership; and
  • a notification to the employee within the statutory four-month deadline.

Effects

Where an employer claims full ownership of an invention, all rights are transferred to the employer from the date on which the declaration of full ownership is notified to the employee.

Partial ownership claims

Employers' claims to partial ownership render an invention a free invention. These claims also give employers the right to use such inventions based on partial ownership.

Filing patent applications

An employer's claim for full ownership of an invention creates an obligation to file the first patent application in Turkey with the Patent and Trademark Office.

Patent application in a foreign country

An employer that has claimed full ownership of an invention may file an application for its protection in a foreign country. The employer's obligation to file the first patent application is lifted if:

  • the invention becomes a free invention;
  • the employee agrees that no patent application need be filed; or
  • the patent application should not be filed for protecting an employer's trade secrets (Article 116/2 of the code).

A service invention becomes a free invention if the employer does not fulfil its obligation to file the patent application where full ownership is claimed or the patent application is not filed within the term set by the employee.

FEES

A fee must be paid to an employee for a service invention irrespective of whether the invention is realised by the employee when conducting a compulsory work assignment.

A fee must be paid to an employee on an employer's claim of full or partial ownership of the invention. Articles 4/1(l) and 7/2 of the ad hoc regulation state that an incentive fee must be paid to an employee, separately from the fee for the invention on an employer's claim of full ownership, which cannot be less than the net minimum wage; this is not applicable to employees who work for public institutions or bodies.

The terms of contract or similar legal instruments signed between an employer and employee, after the employer has claimed full or partial ownership of an employee invention, determines the fee and its modality of payment (Article 115/9 of the new IP Code and Article 11/1 of the ad hoc regulation).

For inventions made by more than one inventor, the fee and its payment are determined for each inventor separately.

Calculating fees

General criteria: The following will be considered when calculating the appropriate fee for a service invention:

  • the invention's potential economic value (Article 10/1 of the ad hoc regulation uses the more restrictive term 'economic value');
  • the nature of the employee's work assignment; and
  • the employer's contribution to realising the invention.

Specific parameters and calculation: The fee for an invention is capped under Article 21/2 of the ad hoc regulation. The employer has no obligation to pay the fee for the portion of the earnings or revenue generated by the invention which exceeds 150,000 times the net minimum wage.

Under Article 10/2 of the ad hoc regulation, fees are calculated by:

  • multiplying the ratio given in the table in Article 21 of the ad hoc regulation by the category in Article 20 under which the invention falls; and
  • considering the earnings and revenue generated by the invention.

Article 20 provides three categories of invention:

  • The employee engages in work on the invention on its own initiative, as the subject of the invention is not part of his or her work assignment and the employer does not contribute to the invention.
  • The employee's work assignment is not directly related to the invention, which is realised as a result of solving a problem identified by the employer and with the employer's contribution.
  • The invention is realised as a direct consequence of the employee's work assignment with the employer's full contribution.

The earnings generated by an invention are determined according to Chapter 3, Articles 12 to 18 of the ad hoc regulation and the general rules of corporate tax legislation. If earnings cannot be determined by the corporate tax legislation, they are determined by:

  • comparison;
  • the benefit that the invention provides to the firm in question; or
  • estimation.

Public institutions: The fee to be paid to employees of public institutions for their inventions cannot be less than one-third of the earnings and revenue obtained from the invention (Articles 113/15 and Article 121/8 of the IP Code).

However, Article 11/3 of the ad hoc regulation specifies that no less than one-third of net earnings is to be paid to employees. Where the public institution uses the invention itself, the fee must be paid to the employee in a single payment and cannot exceed 10 times the net salary that the employee received during the month in which the fee is paid (Article 113/5 of the IP Code and Article 11/3 of the ad hoc regulation).

The fee to be paid to the employee is determined by Article 10 of the IP Code (Article 11/3 of the ad hoc regulation).

The net earnings generated by the invention are calculated by deducting all expenses generated in the course of realising the invention (Article 11/3).

No incentive fees are to be paid to employees that work for public institutions (Article 7/2 of the ad hoc regulation).

Disagreements and arbitration: Disagreements will be settled by arbitration where the parties cannot agree within two months from the date on which the employer started using or benefiting from the invention on claim of full ownership or the grant of the patent or utility model (Article 24/1 of the ad hoc regulation).

INVENTIONS MADE BY HIGHER EDUCATION BODIES

Inventions made by the staff of higher education bodies are regulated by the second differentiated regime. Higher education bodies include those specified under Article 3/c of Law 2547 and those that depend on the Ministries of Defence and the Interior.

Article 121/1 of the new IP Code specifies that all inventions made by such staff are subject to the provisions on employee inventions, to the extent that they are not subject to the provisions under special laws.

The abolition of the so-called 'professors' privilege' regarding ownership of inventions made during the performance of work is one of main changes that the new code has introduced. According to the code, all inventions made by teaching staff in the course of their work are deemed to belong to the higher education body concerned, on condition that it makes a formal ownership and patent claim in reply to the declaration of invention made by the teaching staff inventor. If a patent application is not filed on time, ownership reverts to the inventor (Articles 121/3 and 4).

Under Article 121/3, inventions made in higher education bodies entail similar obligations to service inventions. Higher education bodies must apply for a patent on submission of a claim of ownership in reply to the declaration of invention.

Fees paid to teaching staff inventors cannot be less than one-third of the earnings that the invention generates.

Reporting obligations

Under Article 121/2, teaching staff inventors must report to the higher education body details of any inventions or patent applications in written form without delay (the timeframe is not specified in the act or ad hoc regulation).

Projects supported or financed by public bodies

Article 122 constitutes new rules for inventions made in the scope of projects supported or financed by public bodies. Persons benefiting from such projects or support must inform the body in question in writing within one year from the declaration of an invention if they claim ownership.

Failure by the person benefiting from the project to claim ownership in a timely fashion may result in the public body claiming ownership. Article 122 mentions only the person benefiting from the support of a project. There is no mention of inventors or employees.

If a person benefiting from a project and an inventor are different persons, Article 122 will not apply to an inventor who is an employee of a firm benefiting from such project support.

The body supporting or financing a project can use such an invention under licence free of charge for its own needs if the person benefiting from the project support claims ownership of the invention. This right can be waived provided that it is mentioned in the contract (Article 122/4 of the code). The body supporting or financing the project has the right to request that a licence be granted to third persons under fair conditions in situations specified in Article 122/4.

COMMENT

The new IP Code introduces three different regimes depending on the context in which an invention is made. It appears likely that the three regimes will result in substantially different practices regarding fees and payment for inventions.

The ad hoc regulation complements the legal basis that was missing until now to determine the fees. It is expected that this will permit a more complete application of the rules on employee inventions.

The new code and regulation are open to interpretation. The practice and implementation of these new rules will be influenced by such interpretations, which cannot be estimated at this point. The complete set of rules is now available and ready for application.

Originally published by IAM Yearbook 2019.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Koksal & Partners
Erdem & Erdem Law
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Koksal & Partners
Erdem & Erdem Law
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions