Main Rule Regarding Inventions

The essential issue with regard to inventions originating within employment arises when the employer desires the possession of the invention. In Finland, the main principle of invention ownership is provided by the Act on the Right in Employee Inventions, which states that an employee shall have the same rights to his or her inventions as other inventors, unless otherwise provided by legislation. This means that, primarily, the employee owns all rights to an invention made by him or her; a specific procedure and assignment of these rights is required to render the invention the property of the employer.

The Employee Invention Act is mainly non-mandatory, which means it is applicable only insofar as nothing else has been agreed upon between the employer and the employee, or can be considered evident based on the employment agreement. There are, however, some significant mandatory provisions included in the Act and any contractual terms in violation of said provisions are null and void.

The Employee Invention Act applies to patentable inventions made by employees in private or public employment. It is not applicable to inventions made by university researchers, whose rights are regulated by the new Act on the Right in Inventions made at Higher Education Institutions. For the Employee Invention Act to become applicable two conditions must be fulfilled: the invention must be patentable in Finland and it must be made by an employee. The term "employee" must be interpreted in light of the purpose and premises of the legislation in question; it might therefore be more extensive than in Finnish labour legislation.

Employer's Field Of Activity

A prerequisite for the employer's acquisition of the rights of an employee invention is that the use of the invention falls within the field of activity of the employer's enterprise, or of an enterprise belonging to the same group of companies. This requirement does not apply, however, if the invention is the result of a task more specifically assigned to the employee. It is worth noting that the "field of activity" refers to the actual field in which the employer or the group member carries out its business, and it may therefore be more restricted than the frequently extensive line of business defined in the company's articles of association.

The employer's rights to an employee invention are graded in relation to the level of independence enjoyed by the employee when carrying out his or her tasks; the more closely related the invention is to the inventor's employment, the more extensive the employer's rights to the invention will be.

Reasonable Compensation

One of the most essential mandatory provisions of the Employee Inventions Act is the provision establishing the employee's right to a reasonable compensation if the employer decides to assume the rights to the invention. It follows from this provision that the employee is entitled to a reasonable compensation from the employer even in cases where it has been agreed to the contrary before the invention was made. It is general practice in Finland for employers to apply their own employee inventions policies, setting forth the procedures and compensations applicable to employee inventions. However, it is worth noting that, notwithstanding the more-or-less binding nature of the employee inventions policies, the employee retains his or her right to reasonable compensation under mandatory Finnish law.

New University Inventions Legislation

The University Inventions Act entered into force on 1 January 2007, and its purpose is to promote the recognition, protection and exploitation of inventions made at Finnish universities. The Act aims at clarifying the legal status of the inventions made in universities, as an increasing number of research activities performed at universities involve extensive cooperation with external parties. This new piece of legislation applies to inventions patentable in Finland and made either by persons employed by Finnish higher education institutions during employment, or by persons holding a research position funded by the Academy of Finland. In practice, the new legislation extends the possibility for universities to assume the rights of inventions conceived within the domain of the institution. Previously, as university researchers are excluded from the scope of the Employee Inventions Act, they were entitled to retain the rights to their inventions themselves, unless agreed otherwise.

Pursuant to the new Act, research is divided into two main categories depending on the extent of the involvement of an external party. Collaborative research refers to research involving at least one party external to the higher education institution, such as a financier of the research, and including liabilities related to research outcome that extend to other areas other than just publication of the results. In such a case, the university now has the right to acquire the right to the invention.

If the research does not involve any external parties, it is referred to as open research, as a result of which the inventor may retain the rights to the invention. The Act secures the inventor the right to a reasonable compensation if the university has acquired the rights to the invention. The amount of the compensation is determined on a case-by-case basis and depends on the returns on the invention to the university.

Employee Invention Committee

The Employee Invention Committee is a statutory body appointed by the Council of State. The Committee gives nonbinding advisory opinions on matters falling within the scope of the Employee Inventions Act and the University Inventions Act, thereby providing the parties with a quicker and cheaper means of resolving disputes pertaining to employee and university inventions, and may function also as an arbitration tribunal if agreed upon by the parties.

Contractual Relations Involving Inventions

The legislation discussed contains some essential aspects that should be observed in the management of contractual relations regarding inventions; for example in structuring outsourcing

R&D functions to other companies or university research units. The ownership of inventions and the desired assignment chain should be planned, clarified and agreed upon in advance. The mandatory legislation involves some procedures and time frames that need to be observed and controlled in order to avoid potential losses of rights. In making agreements, the reasonable compensation for inventors should be observed, and the responsibilities related to them taken into account.

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.