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CIPIL Spring Conference 2012: Employees and Intellectual Property Rights - Faculty of Law, University of Cambridge, Saturday 10th March 2012

Chair: Lord Justice Patrick Elias

The programme was as follows and discussions took place at the end of each session:



With the growing importance of intellectual property rights, issues relating to the rights of employers and employees over creations and information developed during employment have become increasingly controversial. The law in the UK operates different rules on allocation of rights depending on the precise nature of the creations involved (whether they are protected as designs, patents, copyright or merely as secret information). In the case of technical inventions, an exhaustive system of rights allocation is supplemented by a regime that allows for compensation of certain inventors whose inventions turn out to be of “outstanding benefit.” In the field of designs, the legislation allocates rights to the employer and commissioners of designs, while in copyright there are special rules relating to employees and restrictions on employees’ abilities to exercise their moral rights. These legislative schemes sit (not always comfortably) beside the shifting common law rules on employees’ duties of good faith, fiduciary duties, breach of confidence, restraints of trade.

Different rules operate in other countries. In the United States, for example, under the work-for-hire doctrine, employed creators are not even regarded as authors, that position being given to the employer. However, in the field of patents, while an employer is usually treated as owner of inventions created by employees who were employed to invent, in other cases the employed creator is the inventor and owner, but the employer gains so-called “shop rights”, that is rights to use the invention without payment. In Japan, the law on employee remuneration led to an international news story when Nichia Corp paid Shuji Nakamura 840million yen (then £10million) in relation to the latter’s invention, as an employee, of blue light-emitting diodes. In Europe, a number of countries, including Sweden and Germany have “employee compensation” schemes, the German one being famous for its sophisticated differentiations. In France, different rules apply to employees who are employed to invent (where ownership vests in the employer) and those who are not employed to invent but who develop something that could be of interest to the employer: the employer has an option to acquire the invention for a “just price”. In the field of authors rights, in most civil law countries, employees are treated as owners of moral and economic rights, though the latter may be transferred or licensed by express, and sometimes implied, contractual agreement.

There has been talk of harmonisation (such as with the 1997 Green Paper), but so far very little has occurred: the provisions of the Computer Programs Directive, Art 2(3) and the Community Design Regulation, Art 14(3) (interpreted in Case C-32/08 FEIA v Cul de Sac), being two notable exceptions. In other fields, as with the European Patent Convention, Art 60(1), and the Community Plant Variety Right, Art 11(4), the matter is deferred to national law, with some indication of the principles for determining which is the applicable law. Little effort seems to have been made to consider this topic in the context of the proposals for a “unitary patent” in Europe. Moreover there is no harmonisation of the background laws relating to trade secrets, unfair competition or rights and duties associated with employment.

Difficult questions of private international law inevitably arise as a consequence of different national rules. In Europe, in relation to patents, a Protocol on Jurisdiction and the Recognition of Decisions in respect of the Right of the Grant of a European Patent to the EPC offers some guidance on issues of jurisdiction.

Seventy delegates ranging from practioners to academics and students attended the event. The first section of the conference offered a detailed overview of the UK rules, focussing on important cases such as Liffe v Pinkava, Kelly v GE Healthcare, Unilever v Shanks, Faccenda Chicken v Fowler and Yeda v Rhone-Poulenc. Implicit in the analysis was a number of questions: why have different rules for different types of information? How do the regimes interact? Are the different regimes coherent? In the afternoon, the speakers offered introductions to the legal position outside the UK, including the German Employee Inventors Act 2009, the US and Scandinavia, as well as the PIL issues.The final session turned to normative questions and the future: should we be thinking about harmonization of rules on employee ownership? If so, what allocative rules are desirable? In what ways, if at all, is the category of employment a special one?