Key Issues on Employee Inventions
During the process of industrial life, the employees might end up with certain inventions and the Turkish legislation stipulates that these employees should be awarded by the employer. This article sets forth the key issues on employee inventions pursuant to the Law on Intellectual and Artistic Works numbered 5846 ("Law") and the Regulation on Employee Inventions, Inventions Made in Higher Education Institutions and Inventions Occurred in Public Supported Projects ("Regulation")
The invention that the employee makes based on his/her work, during his/her obligation in a business or public administration or during his/her experience in this business, is called a "Service (Employment) Invention". Apart from the Service Inventions, all inventions that the employee makes is called "Free Invention".
1) Employee's Liability of Notification
When the employee makes a service invention, s/he has to make this invention notification to the employer in writing and is obliged to notify the employer without delay. The employee should specify how s/he realized the problem and the solution accordingly in the service invention and also the business or work experience s/he benefited from, others employees' contributions -if any-, the instruction s/he received and his/her own contribution margin. Upon this notification, the employer can inform the employee about the issues to be corrected within 2 months. Otherwise, the notice of the employee shall be deemed valid.
2) Claim of the Employer
Once a proper notification is made by the employee, the employer may claim (i) a full right or (ii) a partial right on the related service invention. In order to do this, the employer has 4 months from the date on which the notification duly made is received, for notifying the employee of its claim in writing. This deadline is very important; in the event that a notification to the employee is not made or a claim is not made within this period of time, the invention becomes a free invention.
The employer can make either a Full Right Claim or a Partial Claim.
a. Full Right Claim:
In case the employer makes a full claim regarding the service invention, upon receipt of the relevant notification to the employee, all rights on the invention pass to the employer. In this case, the employee may request a fee from the employer in return for benefiting from the invention.
Apart from this fee, the employer has to pay to the employee an incentive award. The incentive award cannot be less than the net minimum wage. It should be paid to the employee within 2 months at the latest, from the date on which the formal declaration of conformity is received by the employer, regarding the application made to the Turkish Patent and Trademark Office ("Institution"). If the invention is realized by more than one employee, the incentive award is divided among the inventors in proportion to their contribution.
With this full right claim, the employer has the liability to apply for a patent. There are 3 exceptional cases and if either of the following reasons arise, the liability of patent application of the employer is terminated: (i) If the service invention is in fact a free invention, (ii) if the employee consents that the employer doesn't apply for patent, (iii) the employer cannot apply for patent application due to the necessity of keeping company's commercial secrets.
If there is none of these cases and the employer fails to apply for patent within the period to be determined by the employee the invention becomes a free invention.
The employer cannot avoid payment of the abovementioned amounts by claiming that the invention is not worthy of protection after making a full claim regarding the invention; unless there is a firm court decision confirming that the invention is not protectable.
b. Partial Right Claim:
In case the employer claims a partial right, the service invention becomes a free invention. The employer can still use the invention based on its partial right. In such case, the employee has the right to ask the employer to pay him a price in return for benefiting from the invention.
3) Calculation of the Amount
The amount to be paid to the employee is calculated by multiplying the coefficients given in the table in Article 21 of the Regulation, based on the income obtained from the invention and the groups to which the invention belongs. The income obtained from the invention shall be equal to the sum of the income obtained (i) if the invention is used by the company and (ii) the income obtained by not using the invention by the company (through license, transfer or barter/exchange).
The price and payment method should be determined by a contract signed between the employer and the employee, following the employer's claim for full or partial rights regarding the service invention. If the service invention is made by more than one employee, the price and the payment method of the amount are going to be determined separately for each employee. In case the parties cannot reach an agreement, the dispute shall be resolved through arbitration.
4) Mandatory Nature of the Provisions
The provisions of the Regulation regarding the employees are mandatory and cannot be changed to the detriment of the employees. Parallel to this protection, it is worth underling that contracts made between the employer and the employee regarding service inventions, even if they are not contrary to the mandatory provisions of the Law and the Regulation, are deemed invalid if they are not substantially in line with "fairness". This provision also applies to the price determined between the employer and the employee. Objections about the unfairness of the contract or the determined price can be made in writing, within 6 (six) months at the latest, from the date of termination of the employment contract.
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.
