The manner in which intellectual property (“IP) is regulated within the employment context is crucial for any employer – after all, employees are in the execution of their duties an extension of the employer and in turn, an employer’s IP is both produced and safeguarded through its employees.
On a practical level, copyrights and patents are primarily the two most important IP rights when it comes to the employment context given the default legal positions applicable to authors of copyrightable works and inventors of patentable inventions.
Under the Copyright Act (Cap 415 of the Laws of Malta), the default position is that copyrights’ authorship rights belong to the person authoring the work, irrespective of the fact that the person might have been employed, engaged or otherwise commissioned to carry out the work. Two main exceptions are relevant on this front and should be noted by any employer:
- It is possible to depart from the default position by way of a contract in writing; and
- When it comes to databases and computer programs, the default applicable position is the contrary, namely, by default, in respect of databases and computer programs the assumption is that the ownership of copyright belongs to the employer / person commissioning the work.
It should be noted that this standard position deviates from UK IP law, which is otherwise generally the source of Maltese IP practice. In fact, as opposed to what the general idea might be, the Maltese courts have already confirmed the point that unless there is a written agreement under which copyright is specifically transferred, then, the copyright remains vested with the author of the work and this notwithstanding that the author might have been paid and, or commissioned to do the work (see Mallia Saviour v. MK Leisure Ltd wherein this point was discussed in the context of theatrical productions based on Malta’s 1565 Great Siege).
Furthermore, employers should note that moral rights of copyright such as the right to be mentioned as author of a work cannot be transferred – as such, these rights can only be waived.
The Patents and Designs Act (Cap 417 of the Laws of Malta) provides that the default position is that inventions belong to the persons having commissioned the work or to the employer and not to the inventor if the invention occurred throughout the execution of employment / work duties.
Naturally, the said default position is more helpful for an employer than that applicable to copyright. However, companies especially those involved in R&D, should be careful on specifying the remuneration due for an invention by an employee as, absent of an agreement to the contrary, the courts may intervene and award additional remuneration to the employed inventor (taking into account the inventor’s salary, the economic value of the invention and any benefit which is derived therefrom by the employer).
Similar to moral rights of copyright, inventorship rights such as the right to be mentioned as inventor of a patent cannot be transferred and can only be waived. In this respect, it should be noted that the Patents and Designs Act provides that a special written declaration addressed to the Comptroller of Industrial Property is necessary for the inventor’s name not to be mentioned.
What should Employers Do?
In view of the above, every employer should ensure that its employment agreements properly address and regulate the IP relationship with its employees. Ensuring proper wording on transfer, and where necessary waiver, of IP rights should be the minimum for ensuring protection through employment contracts. Naturally, not even having a contract in writing would be a major red-flag for IP purposes and especially IP reliant industries should generally consider engaging an IP audit exercise to ensure that their IP holdings are properly protected and addressed.