Motivating inventors • IP TRUST •

Motivating innovators

ANTICIPATING AND ORGANISING AN EMPLOYEE INVENTION POLICY

To avoid conflicts and legal risks and to boost the innovation policy within a fair and just environment, IP TRUST has developed expertise not only in legal areas, in partnership with specialised lawyers, but also in organisation and internal processes.

THE LEGAL CONTEXT

French legislation dictates:

That an employee’s inventions, created within the framework of his role, belong to the employer from the very beginning.
That the employer pay a bonus payment to the employee-inventor. This is an obligation, but the law does not define the amount nor the formalities for the bonus payment.

In recent times, we have seen an increase in disputes concerning employee inventions and jurisprudence that favours employees:

A clear increase in the bonus payments awarded by judicial order
Challenges to the five-year prescription period
Increasingly strict interpretation of legal provisions (the “bonus” nature of the payment, compliance with the collective labour agreement, payment formalities, etc.)

THE SOCIAL CONTEXT

Many disputes are the result of an employee-inventor’s frustrations:

After a redundancy or retirement (no prescription period for “problem strategies”)
A feeling of lack of recognition

The risk mainly comes from the “snowball” effect: a vindictive employee launches a series of claims from other employee-inventors who were latently discontent.

The second aspect to take into consideration is the balance that can be found between employee “inventors” who have a right to this “bonus payment” and other employees whose contributions were equally significant but do not result in legal provisions for bonus payment.

RECENT DISPUTES

In France, the rise in the number of disputes has led to a reaffirmation of employee rights:

Removal of the five-year prescription period provided for by article 2277 of the Civil Code
Challenges to previous jurisprudence which limited bonus payments to the equivalent of two or three months salary, amounts of several hundred thousand euros are becoming common, certainly for inventions that have significant economic potential
Thirty-year prescription period proposed by a ministerial response of 18th April 2006, but only from the date at which the inventor became aware of the significance of the use of his invention
Cancellation of the provisions of the Metallurgy Collective Labour Agreement which was not strictly legally compliant
Restrictive interpretation of the notion of employee.

In other countries, the situation is even more favourable to employees:

The company Ajinomoto was sentenced to pay 1.4 million euros to one of its former employees, the inventor of aspartame.
The company Nichia Corporation was ordered to pay 149.5 million euros to the inventor of the blue LED.
Fujio Masuoka, Professor at the Electricity Research Institute at Tohoku University is suing for over 7.3 million euros as compensation for his employee inventions.

It is therefore highly recommended that companies do not risk a dispute by neglecting the implementation of legal provisions, imperatively planning for the payment of bonuses to employee-inventors.

RECOMMANDATIONS

The employer must implement a programme in compliance with public policy provisions, to avoid any disputes:

Bonus payments systematically paid for each invention
Payment for past inventions,
Standardisation of the procedure for declaring employee inventions and allocating bonus payments
Organisation for similar situations (work placements, non-salaried staff)
Organisation of other types of recognition