French Supreme Court, Decision Of 9 July 2013, Case No. 12-22157, Arcelor Mittal - Sollac V. Mr Audibert

The French civil Supreme Court (hereafter "Cour de cassation") upholds the decision finding that the fair price owed at the time of the assignment by the employer to the employee, for an invention conceived outside the scope of his/her employment contract but assignable to the employer, may be assessed based on the commercial impact of said inventions after their date of assignment.

Prior to 1991, Mr Audibert invented a new way for dry- storing mud wastes resulting from the cooling process in steel manufacturing. Mr Audibert who was not an engineer and had no creative task under his employment contract, conceived the invention independently while benefiting from the resources and infrastructure of his employer to reduce his invention to practice. Mr Audibert having notified his employer of his invention, the employer decided to acquire all rights in the invention. In 1991, a French application was filed, covering the invention. This French filing was extended internationally through PCT route and a Canadian application was also filed. Practicing the invention allowed the employer to save money while partially resolving its mud wastes storage.

Under Article L.611-7 (2) of the French Code of Intellectual Property such inventions are considered as made by an employee outside the scope of his/her employment contract and give rise to the payment of the "fair price" of the said invention if the employer wishes to be assigned the invention and at the time the assignment takes place.

Even if the fair price is set at the time of assignment of the invention, ie. early on in the economic life of the invention, it may take into account the economic prospects of the future use of the invention.

Nevertheless, after the assignment of the invention, in case of later commercial success of the invention, some employees do go back to their employer to try getting  an additional payment in proportion with the unforeseen commercial value of the invention.

The French Supreme Court clearly states that in setting the "fair price" owed by an employee to its employer, it is possible to take into account events which occurred after the assignment of the invention, to confirm the initial assessment of the economic prospects of the invention.

Consequently, in the case at stake, the Supreme Court upholds the decision of the Court of Appeal which, after the 1991 assignment of the invention, took into account the savings made by the employer due to the invention between 1991 and 2006 to set the "fair price" owed to the employee to 320,000 Euros.

In light of the above, employers should keep in mind that commercial success of their technologies may lead employee-inventors to seek late assessment of the fair price, based on said success. As to employees, they should keep an eye on the becoming of their inventions made outside of the scope of their employment agreement even once assigned to their employer.