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EMPLOYEE INVENTIONS

Who Is Employee?

Intellectual Property Code No. 6769 Article 2, Pharagraph d defines the employee as follows: ‘’ d) Employee: Persons who are under the service of another party due to a private law contract or a similar legal relationship and under personal obligation with respect to this legal relationship to carry out a certain work given by the employer’’

Within the scope of Intellectual Property Code, employee inventions are secured by the provision of Article 113, paragraph 3. ‘’ (3) Provisions shall be applied, in terms of employees, to students and interns who work unpaid with no time limitation.’’

In this context, inventions made by students and interns serving free of charge within a certain period of time will also be evaluated within the scope of the employee invention. Again, Article 113 paragraph 4  contains the following provision. ’’ (4) The provisions in effect for worker’s invention shall be applied to the invention made by workers of state institutions and organizations, without prejudice to other legal regulations and the provisions of agreements that are made between parties.’’  The important thing here is that the legislator makes arrangements for the employees of the public institution, keeping the provisions of other laws and contracts. In this case, it is clear that qualifying the inventions made by the employees of public institutions and organizations as the “employee inventions” can be prevented by the contract or other law articles made by the parties.

What is a Service Invention?

Service invention; is the invention that the employee carries out due to the activity he is obliged in a business or public administration, or during his business relationship, largely based on the experience and work of the business or public administration. For example; In the event that an engineer working in the R&D department of an automotive factory makes an invention on “car engine working with less fuel”, this invention will be the service invention. Within the scope of employee inventions, inventions that are not considered as service inventions are independent inventions and all rights on them are freely saved by the inventor. As it will be explained detaily below, the service invention may later become an independent invention.

Employee's Rights and Obligations:

  1. Notification Obligation: In accordance with Intellectual Property Code Article 114[1]; When an employee makes a service invention, he is obliged to inform the employer of this invention in writing and without delay. If the invention was made by more than one employee, the notification can be made together. It is mandatory in the notification to explain the technical problem, the solution of the technical problem and how the service invention is realized. In addition, the operating experience and work utilized, if any, the contributions of other employees and the form of these contributions, the instructions he received regarding the work he did have to be stated in the notification. The employer notifies the employee if there are any matters he wants to correct in the notification within 2 months after the notification is received. If the employer remains silent, the notification is considered valid.

According to Intellectual Property Code Article 119[2] If the employee makes an independent invention while in a contract of employment, he is obliged to notify the employer without delay. In the notification, by providing information about the invention and, if necessary, the manner in which the invention is carried out, it is ensured that the employer can make a decision as to whether the invention would be considered as an independent invention. The employer may submit an objection that the invention is not an independent invention with a written notification within three months from the date of notification to him.

If it is clear that the independent invention is not assessable within the scope of the employer’s work, the employee has no obligation to report.

Also, Intellectual Property Code Article 114 clearly states; the employer notifies the employees of the date when the notification is received after he is notified. Because, if the notification obligation is not fulfilled, the employee is responsible for the damages incurred by the employer. In addition, the Intellectual Property Code gives the employer the right to file the deforcement of the patent application and the deforcement of the patent in violation of the notification obligation. In this context; If the patent application has been filed but the application has not yet been concluded,  deforcement of the patent application case and if the invention is patented, patent deforcement cases can be filed against the employee.

** Another issue related to the notification obligation is the partial or full claim made by the employer in writing within four months from the date of notification of the employee to the employer. If no notification is made on this subject or partial claim is made, the invention becomes an independent invention.[3] The savings made by the employee on the invention before the employer claims the service invention are considered invalid against the employer since the employee violates the employer's rights.[4]

If a partial claim is made, the employer can use the invention based on this right. If this use significantly makes it difficult for the employee to evaluate his invention; may request that the right of the invention be taken over entirely or that the right to use based on partial rights be abandoned. If the employer does not respond to this request within 2 months after receiving it, the right to use ends.[5]

  1. Offer Obligation: According to Intellectual Property Code Article 119, If independent invention is in the field of the business or the business is in serious preparation to operate in the field in which the invention is related; The employee is obliged to make an offer to the employer to give the opportunity to benefit from his invention under suitable conditions without giving full rights, before starting to evaluate his independent invention in another way while maintaining his business relationship. If the employer does not respond within three months from the date of receipt of the proposal, it loses its priority on this matter. If the employer accepts the offer made to him but does not find the conditions stipulated, the conditions are determined by the court at the request of the parties.
  2. Confidentiality Obligation: In accordance with Intellectual Property Code Article 114; The employee is obliged to keep the service invention confidential, unless it is qualified as an independent invention. It is clear that the aim of the law-maker is to prevent the violation of the employer's right within the scope of service inventions.
  3. Pre-Emption Right: In accordance with Intellectual Property Code Article 120[6] ; If the employer goes bankrupt and the bankruptcy administration wishes to transfer the invention separately from the business, the employee has the right to pre-emption in relation to the invention he has made and the employer claims full rights. The receivables from employee invention are privileged receivables. The bankruptcy administration distributes the privileged receivable according to its proportion in all receivables to its creditor.The employee may request that his invention be transformed into an independent invention instead of receiving a fee.

Employer's Obligations:

  1.  Price Payment Obligation: In accordance with Intellectual Property Code Article 115[7]; If the employer claims full rights on the service invention, the employee may ask the employer to pay a reasonable price to him. If the employer claims a partial right on the service invention, if the employer uses the invention, the employee has the right to demand that a reasonable price be paid to him.

In calculating the price, the economic evaluability of the service invention, the duty of the employee in the enterprise and the share of the enterprise in the realization of the invention are also taken into account. If the inventor has more than one employee, the price is determined separately for each employee. Following the partial or full claim of the employer regarding the service invention, the price and form of payment are determined by the provisions of the contract or similar legal relationship signed between the employer and the employee.

If the parties cannot agree on the amount and payment methods which are mentioned below;[8]

  1. If the employer accepts that he is the rightful owner, the date of patent or utility model,
  2. If the employer claims partial right on the invention, from the date the employer starts to benefit from the invention

within 2 months, the dispute will be settled by arbitration.  The parties also have the opportunity to go to the mediator before going for arbitration.

In Article 25[9] of the relevant regulation (Regulation on Employee Inventions No. 30195, Inventions in Higher Education Institutions and Inventions in Publicly Supported Projects), the provisions covering the employees constitute a mandatory provision and no changes can be made against the employee. In addition; In Article 26[10] of the same regulation, the contracts signed between the parties regarding inventions and  independent inventions, and the price determined must comply with the principle of equity. If not, it will be considered invalid. Objections must be made written within 6 months of the end of the employment contract.

After the employer makes a request for the service invention, he can not avoid paying the price, claiming that the invention is not worth protecting. However, if the court decides the acceptance of the case as a result of the lawsuit filed against the fact that the invention is not sustainable, the employee cannot claim a fee.

  1.  Confidentiality Obligation: According to IPC Article 115; If the employer does not claim full rights, the employer is obliged to keep the information regarding the invention notified to him confidential during the continuation of the employee's rightful interests.
  2. Application Obligation: According to IPC Article 116; The employer is obliged to make the first application to the Authority for the purpose of granting a patent if the claimant has made a full claim for the service invention. However, in order to protect business interests, he can avoid filing for a patent.

 

The employer’s obligation of first application to the Office vanishes in at least one of the cases mentioned below;

a)  the in-service invention acquiring qualifications of independent invention;

b)  the worker’s consent not to file a patent application for their invention;

c)  protecting the company secrets requiring not to apply;[11]

The employer shall be obliged, before the payment of the rate which is demanded by the worker due to their in-service invention, to notify the worker of the situation if they renounce the patent application or patent rights. Upon the worker’s request, the employer must transfer, at the worker’s own cost, the patent rights or documents required to obtain a patent to the worker. If the worker does not respond to the notification that is made regarding this matter within three months as of the date of notification, the employer can renounce the patent application and the rights provided by the patent.[12]

If the employer does not file an application on the in-service invention on which they claimed full rights; or does not apply within the time period that is to be determined by the worker, the invention acquires the qualifications of an independent invention.[13]

If the service invention has become an independent invention, the employee has the right to apply personally. (for example, if the employer has made partial claims)

Upon the worker’s request; the employer shall be obliged to give their rights on the invention for the foreign countries in which they do not wish to obtain a patent; and to provide the worker with conditions for making an application to claim a patent in such countries. Releasing the invention shall be made in a reasonable time period in terms of keeping within time period of priority right.[14]

 

Case:

We would like to give a case study to understand the above obligations better.

After a service invention is made and notified to the employer duly, the employer informs the employee that he accepts this invention as an employee invention and that the patent application will be made by him. However, because the employer did not apply within the period, the invention loses its innovation criteria and cannot be registered as a patent. In this case, the employer not applying on time causes the invention not to be registered as a patent.

Here obligations; we will evaluate both the employer and the employee through the case.

In terms of the employee: the employee has fulfilled its notification and confidentiality obligations. But the point that we will evaluate here in terms of employees is whether the quality of the employee's invention has changed. Within 4 months after the employee fulfills his notification obligation, a full or partial written claim must be made by the employer and a patent application must be made within the period determined by the employee. Otherwise, the invention becomes an independent invention. Shortly, if no claim has been made by the employer within 4 months or no application has been made within the period given by the employer, the invention will not be registered as a patent since the invention will now be an independent invention. So it will be employee’s own fault that he could not maket he application on time.

In the terms of employer: In this case, the employer did not fulfill its obligation to apply, preventing the invention from being registered as a patent. Because, the employer is obliged to make a claim regarding the right ownership within 4 months from the date of notification and to make the first application for the patent if it requests full rights ownership. We assume that the employer has requested full ownership.

In this case, the situations specified in Intellectual Property Code article no. 116/2 have not occurred, which eliminates the obligation to apply.

a) The service innovation becomes an independent invention,

b) The employee consents to not to apply for his invention,

c) Protection of business secrets requires not to apply

Therefore, the employer has violated the obligation to apply. In this case, the employee can file a lawsuit for compensation against the employer. Becasuse the employee was damaged due to the inability to register his invention as a patent due to the employer’s fault. Our legal comment on this issue is; considering the article no. 116/1 of IPC, if his invention registered as a patent, the amount to be paid to the employee must be calculated and paid to the employee.

 

[1] ARTICLE 114- (1) Workers, when made an in-service invention, are obliged to report the invention in written to the employer without delay. If the invention is made by more 54 than one worker, the notification can be made jointly. The employer notifies the date of receiving to the reporting individual or individuals in written and without delay. (2) The worker shall be obliged to explain the technical problem, the solution and how they made the in-service invention on the report. In terms of explaining the invention in a better way, the worker also provides the employer with pictures, if any. (3) The worker also explains the experiences and works that they relied on; other workers’ contributions, if any, and the form of such contributions; the instructions they received regarding their jobs and their contribution besides mentioned contributions. (4) The employer informs the worker in what aspects the report needs to be reorganized within two months as of the date of receiving the report. In case no requests are made, the notification specified in paragraph 2 will be considered valid. (5) The employer shall be obliged to provide the worker with the needed help in order to make the notification as specified in this Code. (6) The worker shall be obliged to keep the in- service invention private unless it acquires the qualification of independent invention.

[2] ARTICLE 119- (1) In case a worker makes an independent invention while in a business relation; the worker shall be obliged to notify the employer of the situation without a delay. In the notification; the employer shall be provided with informational conditions in order to reach the conclusion of whether the invention is fit to be considered as a real independent invention or not; by means of providing information about the invention and the form of invention, if needed. (2) The employer can make an objection regarding the independence of the invention with a written notification within three months as of the date of the notification made to themselves. (3) The worker shall not be obliged to notify if it is clear that the independent invention is not deemed to be within the employer’s field of activity. (4) If the independent invention is considered within the employer’s field of activity; or if the business is preparing to take considerable actions to do activities in the field which the subject invention is within; the worker, before beginning to evaluate their independent invention from different angles while continuing the work relation; shall be obliged to make an offer the employer in order to provide them with conditions to benefit from their invention under proper circumstances without releasing full rights. If the employer does not respond within three months as of the date of receiving the notification, they will lose their preferential right regarding this matter. If the employer confirms the offer they received but do not agree with prescribed conditions, then, the conditions shall be determined by the court upon the parties’ request.

[3] ARTICLE 115- (1) The employer can demand full or partial rights on the in-service invention. The employer shall be obliged to notify this demand to the worker in written within four months as of the date of receiving the worker’s notification. In case that no notification to the worker is made within notification time period, or a notification is made not to demand any rights, the in-service invention will acquire qualification of independent invention.

[4] ARTICLE 115-(2) In case that the employer demands full rights on the in-service invention, all rights on the invention shall be transferred to the employer as the worker receives the notification.

[5] ARTICLE 115- (3) In case that the employer demands partial rights on the in-service invention, the inservice invention shall acquire qualification of independent invention. However, in this case, the employer can use the invention based on the partial rights. If this use considerably complicates the worker’s evaluation of his work, the worker can offer the employee to either undertake the invention in full rights or renounce their rights of use based on partial rights. If the employer does not respond to the worker’s this offer within two months as of the notification.

[6] ARTICLE 120- (1) In case that the employer bankrupts and the bankruptcy administration desires to transfer this invention separately from the business; the worker has a 57 right of pre-emption on the invention that he made and on which the employer claimed full rights. (2) The balance generated from the worker’s invention shall be of preferential balances. The bankruptcy administration apportions this type of more than one balance among the claimants at the rate of their balance receivables. The worker may claim his invention to be an independent invention in return for his balance receivables.

[7] ARTICLE 115- (1) The employer can demand full or partial rights on the in-service

invention. The employer shall be obliged to notify this demand to the worker in written within

four months as of the date of receiving the worker’s notification. In case that no notification to

the worker is made within notification time period, or a notification is made not to demand

any rights, the in-service invention will acquire qualification of independent invention.

(2) In case that the employer demands full rights on the in-service invention, all rights

on the invention shall be transferred to the employer as the worker receives the notification.

(3) In case that the employer demands partial rights on the in-service invention, the inservice invention shall acquire qualification of independent invention. However, in this case, the employer can use the invention based on the partial rights. If this use considerably complicates the worker’s evaluation of his work, the worker can offer the employee to either undertake the invention in full rights or renounce their rights of use based on partial rights. If the employer does not respond to the worker’s this offer within two months as of the

notification date, the employer’s rights of using the invention based on partial rights shall expire.

(4) The worker’s commitments on the invention before the employer claims rights regarding the in-service invention, shall be deemed invalid to the extent the commitments violate the employer’s rights. (5) In case the employer does not claim full rights; the employer shall be obliged to keep the information regarding the invention private which is informed to him for as long as the worker’s deserved interests continue. (6) In case the employer claims full rights on the in-service invention, the worker can demand from the employer a reasonable amount to be paid to him. If the employer claims partial rights on the in-service invention; in case the employer uses the invention, worker’s demand of a reasonable amount to be paid to him, generates.

(7) Economical evaluability of the in-service invention, the worker’s job in the business, the contribution of the business to the invention shall be considered in calculating the amount of the rate. (8) The employer cannot avoid paying the rate alleging that the invention is not worth protection after they make a claim regarding the in-service invention. However, in case that the legal proceeding that is instituted to confirm nonpatentability is approved by the court, the worker cannot demand a rate to be paid to him.   (9) The method of payment following the employer’s claim of partial or full rights on the in-service invention shall be determined according to the provisions of an agreement or a similar legal deal signed by the employer and the worker. (10) If the in-service invention is made by more than one worker, the payment and the method shall be determined according to the paragraph 9 separately for every one of them. (11) The rate tariff regarding worker inventions and the procedure by arbitration in case of disagreement shall be determined by a regulation. (12) The workers can make commitments on the in-service invention that is became an independent invention as they see appropriate without an obligation of complying with the provisions of Article 119.

[8]ARTICLE 116  (2) The employer’s obligation of first application to the Office vanishes in at least one of the cases mentioned below; a) the in-service invention acquiring qualifications of independent invention; b) the worker’s consent not to file a patent application for their invention; c) protecting the company secrets requiring not to apply;

[9] The provisions of this Regulation regarding the employees are mandatory and can not be changed against the employees. In this regard, if there is a provision in the collective labor agreement or service contract applied at the workplace or if there is an application established in the workplace, the provision or practice in favor of the employee is taken as basis.

[10] ARTICLE 26 - (1) Agreements between the employer and the employee regarding service inventions and free inventions, if not contrary to the mandatory provisions of the Law and this Regulation, are considered invalid if they are incompatible. This provision also applies to the price determined between the employer and the employee.

[11] ARTICLE 116- (1) If the employer has claimed full rights on the in-service invention that is notified to them, the employer shall be obliged to file the first application to the Office to be granted a patent. However, the employer can avoid applying if it is required by the interests of the business. Without prejudice to the provision of the paragraph 2; in case it is avoided to file an application, possible economical losses against the worker caused by a fail of obtaining a patent are considered in determining the rate which is to be paid by the

employer for the invention.

[12] ARTİCLE 118- (2) The employer shall be obliged, before the payment of the rate which is demanded by the worker due to their in-service invention, to notify the worker of the situation if they renounce the patent application or patent rights. Upon the worker’s request, the employer must transfer, at the worker’s own cost, the patent rights or documents required to obtain a patent to the worker. If the worker does not respond to the notification that is made regarding this matter within three months as of the date of notification, the employer can renounce the patent application and the rights provided by the patent.

[13]ARTICLE 116 (4) If the employer does not file an application on the in-service invention on which they claimed full rights; or does not apply within the time period that is to be determined by the worker, the invention acquires the qualifications of an independent invention.

[14] ARTİCLE 116 (6) Upon the worker’s request; the employer shall be obliged to give their rights on the

invention for the foreign countries in which they do not wish to obtain a patent; and to provide

the worker with conditions for making an application to claim a patent in such countries. Releasing the invention shall be made in a reasonable time period in terms of keeping within time period of priority right.

(7) The employer, releasing the invention in order to make possible for the worker to obtain a patent in foreign countries, has a right to reserve a non-monopolized right of tenancy to be able to use the invention in such countries for a proper fee; and has a right to claim a protection for their interests generated from this reserved right.