What factors should be considered in deciding where first to obtain patent protection when an inventor team includes members located in one or more jurisdictions other than your own?
Factors to be considered in deciding where first to obtain patent protection when an inventor team comprises members located in one or more jurisdictions other than your own include whether there are first-filing requirements in those countries.
If such requirements exist, it is important to understand whether they apply only to inventions made by national entities or individuals, or more broadly to inventions made in the national territory. If the applicable law depends on the territory where the inventions were conceived or reduced to practice, this raises the additional question of the determination of the location of the invention. The nationality of the inventors and their usual place of work may also be relevant factors.
If the above leads the team of inventors to find that it should be filing first in several locations (first-filing laws are usually national, rather than harmonised), the relative reach and coercive effect of the relevant national laws should also be assessed. Some countries will require first filing only for specific technologies (eg, military technology and information which might be prejudicial to national security or public safety); while others will have procedures for requesting permission to file first in another jurisdiction.
Another important factor to consider is the ability of an entity owning or using a technology sunsequently to export or import that technology. Some countries impose restrictions on the export/import of technology. It may be wise to avoid filing first in a country with overly high technology export barriers.
How does timing affect this decision?
The timing of filing an application for a patent will determine how quickly the team of inventors must reach a constructive recommendation as to where to file first.
This may vary depending on the country in which the first filing may occur and its applicable law.
If the applicable law includes provisions regarding a so-called 'grace period', these will afford the inventors some time to make a proper determination of the place of first filing. Typical grace periods in patent cases are six months from initial disclosure of the invention.
If, on the contrary, the applicable law includes time bars or other provisions that preclude a party from applying for a patent once information has been disclosed regarding the invention, the team of inventors will face pressure to determine the place of first filing quickly.
Since there is no golden rule for determining where to file first, the most important consideration is to ensure that the first filing takes place in a country which is a member of the Paris Convention, so that the initial filing is treated as a priority and gives the applicant an extra year to file further applications in other countries or through regional or multinational arrangements (eg, European Patent Convention or Patent Cooperation Treaty applications) without the risk of the initial filing being treated as a novelty-killing disclosure.
What are the implications of this decision for employee inventor compensation?
It is unclear whether choosing the most appropriate place to file a patent first has significant consequences for the employee inventor compensation owed to each member of the team of inventors.
In general, provisions governing employee inventions are set out in the following types of document (alternatively or cumulatively):
- statutory provisions, such as labour law;
- collective bargaining agreements applicable to the type of activity at stake (ie, agreements governing all employees working in a particular industry); and
- individual employment contracts.
In this respect, the law applicable to the employment contract usually provides information on the law applicable to employee inventor compensation.
Additionally, in some countries labour law has no specific territorial restrictions, so employee inventor provisions are then understood as public policy rules. This may leave room for extensive application of national law, regardless of the place of first filing.
The place of first filing and the place of the invention will likely significantly affect employee inventor compensation only if these places are identical to the place of usual implementation of the employment contract of the employee inventor. In such case, it could be debated whether compensation should be dealt with under the law of the employment contract or the law of the place of performance of the employment, if different. In some countries, in case of a conflict of applicable laws, the law that is most advantageous to the employee inventor applies.
If an invention is not patentable under the laws of one country, but is patentable under the laws of another, how should this be addressed legally/contractually in case of an international collaboration between entities based in the two countries?
Where a given subject matter is patentable under the laws of one country, but not the laws of another, due care should be taken with the wording of a contract granting rights to this subject matter. For the territorial part of the agreement under which a patent or an application may be filed and granted, the easiest way to deal with the situation is to file an application and enter into a patent-licensing relationship.
However, outside the territory or territories where the subject matter is patentable, no patent right exists and a patent filing in another country amounts to publication of the information relating to the subject matter at stake. Thus, it will not be possible to combine the patent licence in the patent-friendly territory with a trade secret licence or communication in patent-unfriendly territories, because the information is no longer secret.
Consequently, in a contract for an international collaboration between entities based in two countries with different patentability criteria, there could be a need to combine both the patented subject matter over a limited territory and additional information giving a competitive advantage to the holder (whether commercial or technical). This would mean that, rather than the agreement being built solely around subject matter which is not patentable everywhere, it is also built around related proprietary information, allowing for technology licence or transfer which would be deemed valid regardless of the patentability of the subject matter.
What types of dispute resolution clause should be included in international collaboration agreements?
Dispute resolution clauses in international collaboration agreements depend on the field of industry at issue. In markets with a limited number of players (eg, major state-owned energy companies), arbitration clauses are most likely to be the rule. In other fields with more players, the general rule is to find a cost and time-effective forum that does not unduly favour or disadvantage one party.
It is therefore advantageous to include a dispute resolution clause with several layers of effective process, allowing the parties to try to resolve their issues amicably before turning to third parties.
A typical dispute resolution clause will include a mechanism with specific deadlines for interacting and trying to resolve issues amicably.
If this does not lead to resolution of the issue, it may be appropriate to include a mediation step under the rules of recognised mediation organisms. In contrast to arbitration, mediation allows the parties to seek resolution of the conflict, notably by finding their common interests for the future with the help of a mediator. This affordable and confidential constructive step should be dealt with contractually.
Only if such constructive resolution methods have been unsuccessful should the parties include wording regarding the national courts or arbitration. Wording as to who will bear which costs may also be appropriate.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription