employee inventions

Employee Inventions: Balancing Opposing Interests and Rights

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It is not uncommon in the increasingly modern business world to come across employees who, through personal technical knowledge and potential creative skills, create intellectual inventions.

Well, in cases of creative production of the employee, the latter must be clear - from the outset - to whom are entitled the rights of economic exploitation of their inventions, on the assumption that the authorship of the work and the moral rights are indisputably recognized to them under Article 2590 of the Italian Civil Code.

However, the protection of the recognition of the paternity of the work by the employee must be balanced with the protection of the employer-entrepreneur who, by entering into an employment contract whose object is the performance of inventive activities, bears the cost and economic risk that - inevitably - derives from the uncertainty of the inventive result.

Our current legal system outlines a specific distinction between different types of inventions, maintaining the tripartition of the previous legislation between service inventions, business inventions and occasional inventions.

The regulation of inventions, which is generally referred to in Article 2590 of the Italian Civil Code, was initially contained in Royal Decree no. 1127/1939, now expressly repealed by Legislative Decree no. 30/2005 (hereinafter IPC), which analyses the three types of inventions in Article 64.

The rationale of the rules in paragraphs 1 and 2 and those in paragraph 3 of Art. 64 of the Industrial Property Code is completely different: in the first two hypotheses the basic principle of labour law that the results of subordinate work belong to the employer applies, while in the third hypothesis the general rule on inventions applies according to which the patrimonial rights belong to the inventor, with the sole limitation of the recognition of the right of option to the employer.

Paragraph 1 of article 64 of the Industrial Property Code governs the so-called service inventions, i.e. those inventions which the employee makes in the execution and fulfilment of the employment relationship in which the inventive activity is envisaged as the object of the employment obligation and which are remunerated for this purpose: in this case the legislation provides that the ownership of the inventions belongs exclusively to the employer, and that no additional remuneration is due to the inventor, who is attributed solely the authorship of the work .

With regard to the element of remuneration, it is worth specifying how the majority doctrine considers that in order to classify the case in the context of the first paragraph of art. 64 one must look at the duties actually performed by the employee, which is why the element characterising the case of service invention must be found in the object of the contract and not in the remuneration .

With regard to the so-called business inventions, the second paragraph of Art. 64 of the Industrial Property Code provides that they are made in the execution or performance of a contract or employment relationship but there is no ad hoc remuneration for the performance of the inventive activity. In this case, although the rights of economic exploitation of the invention remain with the employer - except for the moral right - the employee is entitled to a fair bonus for the inventive activity carried out if the employer or its successors in title obtain the patent or use the invention under a secrecy regime. To determine the fair prize, specific parameters are taken into account such as "the importance of the invention, the tasks carried out and the salary received by the employee, the contribution received by the employee from the employer's organisation" .

Finally, the third paragraph of article 64 of the Industrial Property Code governs the so-called occasional inventions made outside the employment relationship but relating to the activity carried out by the employer, cases in which there is no objective connection between tasks and invention. Unlike in the previous cases, in the case of occasional inventions, the ownership of the invention and the relative patrimonial rights to the invention are vested in the employee, but the employer has the right of option on the use, exclusive or otherwise, or on the purchase of the relative patent. The law expressly allows the employer to obtain the patent already obtained by the employee, but authoritative doctrine holds that the employer may also obtain from the employee the right to the grant of the patent, in the event that the latter does not wish to submit the patent application.

In the event of the exercise of the option or purchase right by the employer, the "inventor" employee is entitled to a royalty or price that is commensurate with the value of the invention, net of the sums corresponding to the aid received by the employer to achieve the invention.

In the event of disputes arising between an employer and an employee, jurisdiction has been removed from the Labour Court and is now unquestionably attributed to the ordinary judge - Specialised Business Section.

It should be noted that, pursuant to paragraphs 4 and 5 of article 64 Industrial Property Code, without prejudice to the jurisdiction of the ordinary judge as to the ascertainment of the right to a fair premium (company inventions) and to the fee or fair price (occasional invention), the determination of the quantum is referred to a panel of three arbitrators, who may decide on the amount of the same with a fair assessment pursuant to article 1349 of the Italian Civil Code. The arbitrators will be appointed, two by each party and the third either by the first two arbitrators or - if they disagree - by the President of the competent specialised Section according to the criterion of the place where the inventor habitually carries out his work.