Continuous technologic developments in recent years have increased importance of protection of employee inventions. Procedures and principles regarding the protection of employee inventions are stipulated under Industrial Property Code numbered 6769, published in the Official Gazette dated 10 January 2017 and numbered 29944 (“IPC”), and the Regulation on Employee Inventions, Inventions Made within the Higher Education Institutions and Inventions Made within the Projects Supported by the Public Authorities, published in the Official Gazette dated 29 September 2017 and numbered 30195 (“Regulation”).
Classification of the Inventions
Respective legislation classifies employee inventions into two groups as “service invention” and “free invention”. Service invention is defined as invention which is made by the employee during the course of his/her employment resulting from the duties under employment agreement or which are essentially based on employer’s resources (i.e. knowhow, properties etc.) whereas free invention is considered as invention that does not fall under the scope of service inventions.
i. Service invention: An employee, who makes a service invention, has to notify the employer immediately in writing explaining technical problems and their solutions which led to the relevant invention; as well as studies of the employer that were used by him/her for invention and other employees’ contribution, if any.
Following the delivery of this notice, the employer can make limited or unlimited claim on the invention within four months and has to apply to the Turkish Patent and Trademark Institution (“Institution”) to patent the invention if it makes unlimited claim. In case of an unlimited claim, the employer acquires all rights over the service invention and in a limited claim, the invention is deemed as free invention; however, the employer will have utilization right over it. In case of limited claim, if the employer’s limited utilization materially prevents the employee from exploiting his/her free invention in any other way, the employee may ask for the employer to take over the invention with an unlimited claim or cease the utilization.
It is important to note that, the service inventions convert to free invention if the employer does not make a written claim within four months following the delivery of the written notice from the employee or if the employer, upon the unlimited claim, does not apply to the Institution for patenting the invention save for the circumstances defined under IPC.
ii. Free invention: If an employee makes a free invention during the course of his/her employment, s/he has to notify the employer of his/her invention by explaining way of conducting the invention to enable the employer to make an assessment on the status of the invention. If it is clear from the outset that the free invention does not relate to the company’s business, then the employee does not have to notify the employer.
Any objection by the employer regarding the legal status of a free invention is required to be raised within three months in writing following the notice of the employee.
Consideration to be paid to Employees
i. Encouragement award: The employer, who makes an unlimited claim on service invention, has to pay to the employee an encouragement award, which is a one-off payment that cannot be less than the minimum monthly wage, paid within two months following delivery of the procedural conformity notice to the employer from the Institution in relation to patent application of the invention. In case, more than one employee is involved in making the invention, encouragement award is distributed amongst them according to their contribution ratios.
ii. Remuneration for the invention: Remuneration for the invention should be made in case the employer makes any claim on the service invention. The amount and payment method of remuneration can be determined through an agreement in conformity with the legislation and if no such agreement is executed then statutory provisions of the Regulation will be applicable.
The Regulation suggests use of an analytic system, which consists of three main steps, for determination of the remuneration. First step is to identify the group of the invention according to contribution ratio and actual assignment of the employee at the company. Determining the revenue that the company gains as a result of invention is the second step. After identification of group and revenue, the calculation is made pursuant to the schedule attached to the Regulation, which sets out changing coefficients depending on the revenue ranges and groups. It is important that the amount of remuneration is capped at 150,000 times the minimum wage.
Should the invention is made by more than one employee, the calculation is made pursuant to the aforesaid method for each employee and the amount, which is found following the calculation, is multiplied by the contribution ratio of the relevant employee.
Dispute Resolution Mechanism
The Regulation stipulates that any dispute between the employers and employees or among the employees with respect to employee inventions is resolved via arbitration. The parties may opt to resolve the dispute through mediation before applying to arbitration.
It is highly advisable to introduce internal policies and procedures at the workplace with respect to the employee inventions which are compliant with IPC and the Regulation. This will not only ensure that the employees are informed of the ways to be followed in case they make an invention but also lead to enlighten them regarding their obligations and responsibilities towards company on this case.