Transfer of patent rights on an employee’s invention: End of a jurisprudential saga!

03/02/22
Transfer of patent rights on an employee’s invention: End of a jurisprudential saga!

Industrial property – employee’s inventions

On January 5, 2022, the Court of Cassation, after a jurisprudential saga, ruled again (Commercial Chamber, appeal no. 19-22.030) upon the transfer of a patent right on an employee’s invention.

 

In this long dispute between an employee inventor and his employer, facts can be summarized as follows (see illustration below – click to enlarge):

 

The procedure went as follows (see illustration below – click to enlarge):

 

 

The Court of Cassation, in 2018 (Cass. Com., January 31, 2018, n°16-13.262), in the context of this same procedure, ruled that the employee’s right to additional remuneration can only be raised against the employer and arises from the date of the realization of the patentable invention.” However, the Court ruled that the transferee was not the successor in title to the employer and therefore could not claim that the invention corresponded to a work-related invention in the context of a claim initiated by said employee. This ruling was therefore likely to worry groups of companies as to the soundness of the chain of rights when the patent filer was not also the employer (see Patent News: A noteworthy decision concerning the constitution and securing of patent portfolios):

“The acquisition of intangible elements of a company’s assets including a patent and the result of work carried out in the continuity of this patent by an employee with an inventive mission whom it had employed, does not confer on the transferee the status of successor in title to the employer, so that this transferee, who filed a patent from these elements, is not entitled to oppose the employee that the invention of which the latter is the author and claims ownership is a work-related invention belonging to him

 

By a decision of rejection, albeit published in the Bulletin, the Court of Cassation seized of the appeal against the decision of the Appeal Court of July 2, 2019 rendered a reassuring decision in this respect. Indeed, on referral, the Paris Appeal Court refused to grant the employee’s claim to the patent, observing that the transferee had legitimately become the owner of the invention.

 

The Court of Cassation therefore confirms that the transfer of patent rights on a yet unregistered invention is possible. It proceeds to a combined reading of articles L. 611-6 and L. 611-7 of the Intellectual Property Code to conclude that the employee cannot claim a patent on an invention on which he has never held any right.  According to this decision of the Court of Cassation, the assignee of the unregistered invention is entitled to oppose the employee inventor as the assignee of the disputed invention, whose right to the title belonged not to the inventor but to his employer.

“It follows from articles L. 611-6 of the Intellectual Property Code and L. 611-7, 1, of the same code, in its wording resulting from law n° 94-102 of February 5, 1994, that if the inventor is an employee and the invention is made within the framework of the execution of his work contract including an inventive mission which corresponds to his effective functions, the right to the patent on this invention belongs to the employer only. Nothing prevents the employer from transferring this right to a third party. Consequently, as the assignor’s successor in title, the assignee who registers the patent may invoke against the employee inventor, who requests the transfer of the patent to him, the fact that the invention protected by the patent is a work in progress, and that the employee has never held any right to an industrial property title.

 

The key takeaway from this ruling:

  • This ruling brings clarity and secures the fate of patents related to work-related inventions. It is with this same concern that the legislator added article L. 611-7-1 to the intellectual property code through an ordinance n°2021-1558 of December 15, 2021 to govern the fate of inventions made by people hosted within companies without being employees (one thinks of interns in particular).
  • Finally, this ruling reinforces the value of a company’s intangible assets, with or without patent registration. In the context of a transfer of assets, it is necessary to take into account not only the patents held by a company, but also the inventions over which it holds rights and which may be the subject of a patent application by the transferee. This can be done without the employee inventors being able to object.
  • At the most, it should be noted that the obligations of the assignor-employer should be clarified in the case of a title transfer and not a patent transfer. Indeed, article L. 611-7 of the Intellectual Property Code provides not only for the assignment of the invention to the employer, but also for a right for the employee to be informed about the fate of his invention and to receive additional remuneration. However, the first Court of Cassation ruling of 2018 (Cass. Com., January 31, 2018, n°16-13.262) held that the employee could only claim this right to additional remuneration against his employer and not the assignee.
  • Unless a company ceases to exist as a result of an insolvency proceedings, as in the case that gave rise to these rulings, the employer who transfers a simple unpatented invention must ask himself whether he is respecting his obligations by simply informing his employee of the transfer of the right to the title and not of the fate of this invention, which is now in the hands of a third party. In principle, the law obliges one to inform of the deposit and issuance of a title. In any case, the assigning employer would be well advised to provide for the payment of an additional fixed or determinable remuneration in case of assignment of the right to the title.

 

To go further : find here, all Litipat episodes  

 

 

To go further