Employee inventions – Part 1: Rights and obligations
Nowadays most inventions are created during employment. This is primarily due to the professional know-how, creativity and innovation of the employee on the one hand, and the employer’s material resources or infrastructure that makes the creation of the invention possible, on the other. When an invention is created, a question that often arises is who holds the rights to the invention for which both the employee and employer deserve kudos. Here we briefly present you the rights and obligations of employer and employee in the case of an employee invention. In the next issue of Legal BUZZ we will focus on one of the more pressing issues in this area – determining a suitable reward for the employee inventor.
Employee inventions are firstly regulated by the Employment-Related Inventions Act (ZPILDR), which differentiates between three types of such inventions:
i. direct work invention, which is created during the fulfillment of employment agreement, on explicit demand from the employer or on the basis of a special contract between employer and employee;
ii. indirect work invention, which is created during the practice of a profession, if the expertise and experiences acquired from the workplace or means, which the employer made available to the inventor, were the main contributor to the invention;
iii. free invention, i.e. any other invention, created during the term of the employment agreement.
When an employee invents an invention, he must without delay notify the employer in writing (which includes e.g. an email) and clearly state that it is a notice of the invention – the latter must contain (i) an exact description of invention, (ii) information on how the invention came about, (iii) a statement whether it is a direct or indirect work invention, and (iv) information about other people included in the creation of the invention.
Upon receiving the written notice from the employee, a 3-month period starts during which the employer can assert its right to a complete takeover (takeover of all rights to the invention) or a limited invention takeover (acquisition of non-exclusive right to use the invention), of which the employer must notify the employee in writing. If the employer does not opt for a possible takeover of work invention within the three-month period (or waives his right), then the employee has the invention freely at his disposal; in case of a complete takeover, the employer must (save for some exceptions) without delay register it in the Republic of Slovenia for a patent or a patent with a specified time limit. If it fails to do so, even within the additional time limit given by the employee as well, the employee himself may do so on behalf and at the expense of the employer.
The employee must also inform the employer about the created free invention. In this case, the employer may, within a two-month period, acknowledge that it is indeed a free invention or it can challenge the claim at arbitration committee / settlement council. Furthermore, the employee must, before using the free invention, give the employer the option in writing to buyout the rights to use the invention. The employer can accept the offer within two months – if the offer is accepted, but where the offered terms are not agreed upon, it can, during the foregoing period, initiate a proceeding before the arbitration committee / settlement council. The foregoing does not apply to inventions which are clearly not in the employer’s field of work.
In the case of a (complete or limited) takeover of a employee invention, the ZPILDR uses the term “appropriate reward” for the employee, which in practice causes quite a lot of problems, especially when specifying the correct reward amount. This topic will be addressed in the next issue of Legal BUZZ, when we will also look at reward determination methods and look at how legislators in Austria and Germany have ironed out this problem.
Author: Martin Pirkovič, Associate
