With global collaboration on the increase, how can HR teams track who ‘owns’ new ideas and protect the business from legal and intellectual property issues?
Many businesses have been looking to fill skills gaps by hiring people living overseas or recruiting foreign workers to join multi-jurisdictional teams based in the UK or elsewhere.
In most cases, this is relatively easy to manage as long as local laws related to their employment, tax and residential status are understood. But what if the business is investing in innovation activity – could there be risks linked to the ownership of inventions?
Many corporate research and development (R&D) programmes actively encourage diversity, and it is not unusual to have employees from different countries and cultures working together.
The rise of remote working, facilitated by online communications platforms, has also made managing teams that are spread geographically far easier than it was before the pandemic.
‘First filing’ law
However, employers may not be aware that a lack of harmonised law governing the ownership of inventions and first filing of patent applications could lead to disputes.
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If a business is organising an ‘inventor workshop’, for example, which includes people living in different countries, with different nationalities and/or residencies, extra care may be needed to navigate any legal variations.
Patent offices in most countries have a default requirement that patent applications for innovations that originated in their jurisdiction are filed locally first.
This is known as a “first filing” law. If the business doesn’t want to do this, it can seek permission from the local government patent office to file for patent protection in another country first, and this is usually granted unless the invention is deemed to be of national significance.
In many jurisdictions serious breaches of these provisions can lead to criminal sanctions.
While first filing rules are generally straightforward, issues can arise if there is more than one named inventor and they are of different nationalities or residencies. In this case, the business should seek specialist advice about where to file first.
What about joint inventions?
Another potential problem area for research-driven businesses with an international or globally spread workforce is agreeing what happens with joint inventions.
While businesses tend to encourage collaborative efforts in innovation, this gives rise to the phenomenon of multiple people on a project being named as co-inventors. Naming joint inventors can give rise to issues further down the line when pursuing patent protection for the invention.
In the UK, there is a statutory provision that ownership of any inventions relevant to the employer made by scientists, engineers or R&D specialists during the course of their employment, is owned automatically by the employer. However, in other countries this is not necessarily the case.
For example, in the US there is no statutory provision and ownership of inventions is generally dealt with in the employment contract.
Now imagine the situation where an invention is created jointly in a video conference invention workshop with the UK inventors, employed by UK-based subsidiary company A, sitting in the UK and the US inventor, employed by US-based subsidiary company B, sitting in the US.
Without some pre-existing contractual arrangement in place, the first ownership of the invention would be jointly between companies A and B. What’s more, both the UK and US patent offices have first filing laws so first filing permission would have to be sought from one or the other.
This is a simple example to illustrate the administrative headache created by such pan-national collaborations and the problem is multiplied for each additional nationality or residence and employment relationship in the team.
Managing ownership
Rather than leave things to chance, it is important that R&D-led companies that employ foreign national workers make sure that their processes for managing the ownership of inventions and first filing of patent applications are robust.
This is particularly important if they operate multi-jurisdictional teams comprising people of different nationalities and residencies, but it’s also important if they are intending to employ consultants, where, the first ownership of the consultant’s inventive contribution may lie with the consultant rather than the contracting company.
While UK law is relatively straightforward when it comes to rights of ownership, there are some important differences in other countries
When running engineering or inventor workshops, businesses should be able to clarify who said what and ensure that this information is well documented, preferably in the form of contemporaneous minutes signed off by all attendees at the end of the meeting/workshop.
This could be critical when determining who was responsible for the inventive ‘spark’. Any external consultants on the team should have a contract in place containing a specific clause regarding the ownership of inventions.
While UK law is relatively straightforward when it comes to rights of ownership, there are some important differences in other countries. In Germany, for example, if the company decides not to develop an invention, it is obliged to offer the ownership of the invention back to the individual responsible for it.
This could cause commercial sensitivities for the business if the employee subsequently decides to file a patent application to protect their innovation. Germany also has strict laws on compensating German inventors, which can lead to an imbalance in the treatment of inventors from different countries working on the same project.
Leaving an audit trail
Ideally, every R&D-led business should have an audit trail of the genesis of every invention, so they can track back to find out who said what and to clarify exactly when, where and by who the invention was made.
They should also have a well-defined process in place for determining rights of ownership at the outset. If they have a workforce comprising people of different nationalities and residencies, a review may be needed to mitigate the risk of legal challenges in the future.
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It is generally much easier to set these structures up early than to try to unpick them later when a problem arises.
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