Introduction

Concepts for inventions and resources for filing patent applications provided by a company may be insufficient to prove that an employee's research results are an invention produced in the course of their duties. According to the Patent Act:

"Where an invention, a utility model, or a design is made by an employee in the course of performing his/her duties, the right to apply for a patent and the patent right thereof shall be vested in his/her employer and the employer shall pay the employee reasonable remuneration; where there is an agreement providing otherwise, such agreement shall prevail."(1)

In the event of doubt regarding the ownership of patent rights for research work conducted by an employee during his or her tenure, the following questions should be asked:

  • Is such work carried out "in the course of performing the employee's duties"?
  • Have any special agreements been made between the parties?

Facts

On November 14 2013 the IP Court(2) gave its view on determining what constitutes an "invention produced in the course of employment". B was the general manager of company A. Both A and B had previously agreed by way of a contract that if B used A's resources for his research, any results from that research would be shared by both parties. During B's employment, the chairman of A provided B with the ideas, photographs and opinions for the development of new products and instructed B to develop new products. Following this, B proposed his research ideas for a new product (the invention at issue). B also leveraged A's manpower and funds to produce drawings, models and production molds. Eventually, B solely applied for a new utility model patent Y, based on his research results, and named himself as the sole creator. All expenses for the patent application were paid by A. Under these circumstances, A claimed that the invention at issue should vest in it based on the grounds that it had been made in the course of B's employment or, even if it had not been made during the course of B's employment, it should vest in both parties as joint owners according to the contract agreed by both parties.

Despite A providing numerous witnesses in an attempt to prove that the research process for the invention at issue was not created independently by B, the court ruled in favour of B. The court accepted B's argument that the ideas provided by A's chairman were merely presented in order to promote the company's business and, as such, were not essential information for the patent's development. In addition, any such ideas and materials were empirical or pure concepts or suggestions (ie, they contained no essential technology for the patent). Although A's engineers had assisted in the drafting of the patent drawings and specification, they were merely documents essential to the administrative procedures of the patent application and thus had no substantive involvement in the research process. As for A's staff providing assistance in making models and then producing molds for manufacturing, the assistance was likewise provided with respect to the production process and was therefore unrelated to research and invention. The court rejected the claim that patent Y was a creation completed by B during his employment with A.

As for A's claim that both sides had agreed on sharing B's research results for any research conducted using A's resources, the court took the view that the term 'sharing of research results' in the contract did not amount to an agreement to have joint ownership of the patent rights. Further, A raised no objections during B's application for the patent in his own name. Accordingly, the court rejected A's claims.

Supreme Court decision

The case was appealed to the Supreme Court. On July 17 2014 the Supreme Court(3) overturned and remanded the IP Court's decision. According to the Supreme Court, since both sides had expressly agreed to share the research results if B used A's resources to carry out any research, the IP Court's interpretation ran counter to common sense by stating that it did not amount to both sides "having joint ownership of the patent right". The Supreme Court further pointed out that as A had paid patent application expenses, given development ideas, drafted drawings, communicated with B during the drafting of drawings and had participated in negotiations for the manufacture and production of molds, its claim of the patent at issue being jointly owned was therefore not without merit and should be accorded due consideration. As to the IP Court's decision regarding the contention that the technical content of Patent Y was not a creation completed by B during his employment with A, the Supreme Court expressed no different opinions.

For further information on this topic please contact Hsiu-Ru Chien or Shih-I Wu at Lee and Li Attorneys at Law by telephone (+886 2 2715 3300) or email (hrchien@leeandli.com or shihiwu@leeandli.com). The Lee and Li website can be accessed at www.leeandli.com.

Endnotes

(1) Article 7(1) of the Patent Act.

(2) 2013 Min-Zhuan-Shang-20.

(3) 2014 Tai-Shang-1479.

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