UK: Employees’ Inventions Draft Bill

Last Updated: 9 March 2012
Article by Marius Petroiu and Claudia Jelea

1. A draft bill aimed at supporting R&D.

On 13 October 2011, the Romanian State Office for Inventions and Trademarks ("OSIM") published a draft bill on employees' inventions (the "Draft Bill") on their website. Initiated by OSIM, the Draft Bill appears to have been the subject of consultations with the National Authority for Scientific Research ("NASR").

On 25 November 2011, the Romanian Ministry of Economy promoted the Draft Bill on its website, together with its arguments. According to these arguments, the Draft Bill is aimed at: i) supporting R&D by company and university employees, ii) encouraging legal entities (investors or universities) to file patent applications (given that in 2011 55% of OSIM patent applications were filed by individuals), and iii) boosting technology transfer through the patent applications that would be issued under the Draft Bill.

2. Is Patent Law no. 64/1991 detrimental to R&D?

The Draft Bill would be deemed to replace the current provisions of Patent Law no.64/1991 (the "Patent Act") and its implementing norm in relation to employees' inventions. The authors of the Draft Bill believe that current Patent Act provisions do not sufficiently protect the rights of R&D investors over their inventions.

At present, under the Patent Act, unless otherwise provided in his employment contract, an employee has the right to patent an invention developed by him while performing his work duties. In contrast, the employer has the right to patent inventions being developed by the employee pursuant to either an "inventive mission" clause provided in the employment contract, or a research contract. The authors of this article believe that when employment contracts are properly drafted, the current Patent Act provisions are not detrimental to R&D activities.

3. Criticisms of the Draft Bill

The main principle of the Draft Bill is that the employee must inform the employer every time he patents an invention. Based upon such information, the employer shall assess if the invention falls under the "employees invention" definition, and shall, if applicable, provide employee with a remuneration.

However, at this stage, the authors of this article are of the opinion that the Draft Bill should be construed as a preliminary document, drafted for discussion purposes only. This is because the Draft Bill, in its current form, contains inconsistencies and confusing drafting that, if enacted, would prove more harmful than the current provisions of the Patent Act. Specifically, the Draft Bill includes:

  1. Confusing "employee invention" definition: Art. 3(1)(b) of the Draft Bill allows for an invention patented by a former employee to be deemed an "employee invention", subject to notification of the former employer, if filed during the two years after termination of the employment contract of such former employee.
  2. Confusing employee status: Although Art. 1(1) of the Draft Bill provides that at least one inventor must be an employee, Art. 3(1) implies that all inventors must be employees. 
  3. Inconsistent employer reference: According to Art. 1(1), the Draft Bill would apply only to inventions created by employees of legal entities, while according to Art. 3(1)(a) and Art. 2(c) the Draft Bill would apply to inventions created by employees of either legal entities or authorized individuals.
  4. No mechanism for sanctions against employees' abuse: The Draft Bill relies on the above principle of "employee obligation to inform", but provides no sanction if a former employee fails to notify his former employer that he has patented an invention.
  5. An invention cannot acquire trade secrets protection: Art. 10(1) of the Draft Bill provides that an employee invention can be protected as a trade secret. This unfortunate provision raises serious concerns for the entire Draft Bill. By law, every invention involves publication of its description, prior to such invention being awarded protection under a patent (normally valid for 20 years). However, it is of the essence of any trade secret to be kept secret, and as such, not to publish its description. Therefore, an invention (whose description is published) would fail to be protected as a trade secret.

4. Conclusions

At this stage, compared to current Patent Act provisions, the Draft Bill provides few incentives for companies, universities or their employees to develop their R&D activities. As a result, the authors of this article believe that due to its significant flaws the Draft Bill should be entirely withdrawn. Instead a consultation should be launched with all industry actors (OSIM, NASR, university professors, magistrates, lawyers, unions and major corporations) in order to assess: a) whether such legislation is really necessary, and b) if so, the form and substance of such legislation, with regards to actual domestic legislative requirements and EU standards.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 01/03/2012.

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