The Issue
It is widely acknowledged that large corporations spend a lot of resources on research and development to produce new, patent-worthy products and technologies. These corporations hire individuals to work on this research and development. These corporations in this case are the Employers. The point of contention here is who will be the owner of these patents, the employer or the individual who create such inventions. The Patent Act, 1970 is mute on this subject and does not actually address who owns patents developed while a person is employed, but it does indicate that the inventor will always be the patent’s first owner. As a result, it becomes a bit murky since the employer made a capital investment in the invention of the patent while the employee has completed the task for which he was employed.
Unlike the Patent Law, the Indian Copyright Act, 1957, despite being the older enactment, clearly states in section 17(c) that the owner of any copyrightable work created during employment shall belong to the employer unless a contract is executed between the parties to the contrary.
Course of Employment Explained
The Indian Courts have consistently protected the rights of employees against their employers in matters related to patent ownership. In the case of Darius Rutton Kavasmaneck v. Gharda Chemicals Ltd. (2014), the High Court of Bombay ruled that it is not the duty of a managing director to participate in a company’s research and development activities. As a result, his invention would be outside the scope of his employment, and he was not hired for the position that produced the paten.
This means that an employee’s job responsibilities will be limited to the specific tasks they were hired to perform. For example, if an employee is hired in the process of developing a patent and comes up with a new invention in that course, it will only be recognised as a patent developed during the course of employment and not otherwise.
Comparative Analysis
Indian patent law is not as effective as it could be in safeguarding the employer’s rights. However, there are certain other countries that have implemented measures to address this issue.
Deemed Ownership
The concept of deemed ownership is discussed in three different patent acts: section 39 of the United Kingdom Act, section 132 of the Israeli Patent Act, and section 6 of the Chinese Patent Act. The concept of deemed ownership is founded on the principle of ‘Duty to invent’. This means that if an individual is employed with the specific responsibility of inventing something, they are not entitled to claim ownership of the patent for that invention. In other words, if an employee is hired to create something new, any resulting intellectual property belongs to the employer rather than the employee. The reason behind this action is to provide incentives to employers who dedicate their resources towards the creation of new patents. This, in turn, contributes to the overall progress and advancement of the nation.
Shop- right
The principle of Shop Right has been implemented and utilised in the United States of America. It is a non-transferable right that grants the employer the ability to use a patented invention without having to pay any royalties, even if the employee is the rightful owner of the patent. In the United States patent laws, there is no mention of the provision of employer-employee ownership of patents. However, the courts have established precedents to safeguard the interests of employers.
Takeaway for the Employer
The only option left to employers in India, where there is no law defining who owns patents created during the course of employment, is to add a clause relating to the exhaustion of patent rights to the employment contracts of the employees, stating that the employees will not assert any ownership rights over any patent that may be created during their employment. This will protect the ownership of any potential patents. Furthermore, the absence of precedents on the given lacuna in India demonstrates that the employers are being wise and have already taken steps to protect the workers they hire for research and development.
Conclusion
The lack of provisions in the Patent Act regarding employee-developed patent ownership in India discourages employers or large corporations from investing in research and development, which ultimately slows down the growth of the entire nation. As a result, a consistent provision defining the ownership of patents created in the course of employment is urgently needed.
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