Intellectual property rights (IPR) - employees

A guide to protection of intellectual property rights

Almost all enterprises have intellectual property rights, whether in the form of business secrets, know-how, patents, trademarks, designs, copyrights, company names or domain names. These rights are often established on the basis of the employees’ performance. In such cases, there will often be a need for clear rules governing the possible transfer of rights from employees to the enterprise. Knowledge of such rights and of the importance of these rights, as well as how they should be managed in order to provide the best possible return for the parties, varies widely. This guide is intended to increase awareness of such intellectual property rights linked to our members’ employment relationships, including the right to ownership.

The various types of rights

  1. Patent rights 

What is a patent?

A patent is a legal protection of an invention.

What can be protected is something that solves a technical problem, can be utilised industrially and has so-called inventive step. Technical know-how and information that do not meet the conditions for patenting are not included.

Inventions are made on the basis of a creative effort, but not necessarily at a high intellectual level. One condition for achieving patent protection is that the invention can be utilised industrially. This means that it has technical qualities and must also be reproducible. In order to obtain a patent, the invention must also be new and have “inventive step”, which means that it must differ from those  previously known.

A party that obtains patent rights will be given the exclusive right to utilise the invention for up to 20 years (from the date of the application). The exclusive right only applies in the countries where the patent has been registered. There is no such thing as a “world patent”. However, there are two systems that can help to simplify the application procedure worldwide and give patent applicants more choices (PCT and EPC).

The exclusive right is linked to utilising the invention in business activity. This means that you can prevent others from manufacturing, selling, utilising or importing your invention. In some cases, the patent holder will nonetheless have to allow the invention to be used, but in such case in return for payment (compulsory licence).

The requirement of novelty/newness

In order for the invention to be patented, there is, as previously mentioned, a requirement that the invention is actually something new. It is therefore crucial to wait until after the patent application has been filed before informing the rest of the world of the invention, publishing it in trade journals, showing it at trade fairs or in any other way making it publicly known. However, if you have to inform others about it during the process, you must ensure that those involved keep this a secret, for example through confidentiality agreements. You will find examples of such agreements on Innovation Norway’s website, see the link below.

The requirement of inventive step

In addition, the invention must be significantly different to previously known technology in the area. It must represent more than just a logical continuation of that which is already known among professionals and scientists. The idea must thus represent a leap from known technology. The leap must be of a certain size, including in relation to whether the invention leads to major practical benefits, financial savings, etc.

Patent applications

In Norway, patent applications are filed with the Norwegian Industrial Property Office. If you do not have a lot of experience in preparing such applications, we recommend hiring a patent attorney (a patent agency) to help you prepare the application and in the further process.

Once a patent has been applied for in one country, this basically prevents the invention from being regarded as a novelty in other countries. However, according to the Paris Convention, a patent application in one country will not prevent a patent  from being granted in another country if the same application is filed in the relevant states that have ratified the Convention within one year of the filing of the first application. You should therefore decide in advance on the countries in which you want to have a patent and also think ahead when wording the application.

As soon as the patent has been granted or in any case 18 months after the application is filed, the patent application will become publicly available. This is part of the price one pays for being granted a time-limited exclusive right. Others must be able to find out about the technical solution that has been patented in order to have an opportunity to improve it or develop parallel technology. In technology where the patent forms part of the overall concept, a payment will normally have to be made to the patent holder for the use of the patent.

Publication can be prevented by withdrawing the application by certain deadlines.

Infringement of patent rights

Basically, the patent holder has exclusive control over any use of the patent. The use of the invention will infringe this exclusive right if the use has not been agreed to by the patent holder. The commercial use of the invention as one of several components in further developed technology will similarly be conditional on the patent holder’s consent. The patent holder must therefore be prepared to “defend” the patent, possibly also by taking legal steps. A person who is considering applying for a patent should therefore also consider whether the disadvantages entailed in publishing the invention and using necessary resources to defend the patent will be offset by the benefits that the exclusive right may provide. An alternative may be to try to protect the invention through secrecy (confidentiality agreements, etc) in the circles where the technology is to be used.

Read more about patents and the patenting process on the Norwegian Industrial Property Office’s website

More information can also be found on Innovation Norway’s website: http://www.innovasjonnorge.no/

See also the Norwegian Act no. 9 of 15 December 1967 on patents: http://www.lovdata.no/all/nl-19671215-009.html

2. Copyrights

What is protected by copyright?

The subject of copyright protection is the work that is a result of the author’s creative efforts. It is the form of the intellectual work, i.e., the expression it creates, which is protected. The copyright does not protect ideas, knowledge or methods, but these may well lie behind the work’s form and be the basis for the author’s ability to produce the work.

According to the Norwegian Copyright Act, intellectual work means “literary, scientific or artistic work of any kind, irrespective of the manner or form of expression”. Works of music, written works of all kinds, films, paintings, drawings, sculptures, computer programs, maps, etc, are all covered by the designation intellectual work.

What are the conditions for obtaining protection?

The copyright arises as soon as the work has been created. There is no requirement of registration or any other formalities as there is for patents and trademarks. The intellectual work thus does not need to be labelled with the international copyright mark © or similar  to be protected. At the moment when you have created drawings of a building , written an article or composed music, copyright is established provided the other conditions are met.

Two fundamental conditions must be met in order for something to be regarded as an intellectual work:

  • In the first place, the intellectual work must have been created by human beings.
  • In the second place, the work must meet the requirement of originality. The requirement of originality means that the work must be characterised by something (new and) original, and be an expression of individual creative intellectual efforts.

Further details on the content of the protection

Within certain frameworks, the copyright gives the author an exclusive right to utilise the work (commercial rights) and thus prohibits others from making any corresponding use of it. This means:

  • the right to decide whether a work is to be utilised and, if so, the way in which it is to be utilised
  • the right to decide who is to be allowed to utilise the work, and possibly that it can be utilised in certain ways by various entitled parties
  • the right to determine the more detailed conditions for usage, and that payment is to be made for the utilisation.

 In addition, the author has so-called moral rights, see below.

Limits on the exclusive right

It can be said that the exclusive right is limited by three protection lines and that the author loses control over the utilisation gradually as each of these protection lines are crossed.

  • As long as a work has not been published, the author has full control. Without the author’s consent, no one is entitled to make copies of, or in any other way show, perform or make known, a manuscript that a person has lying in his/her office or bedside table drawer.
  • By making the work public (public presentation with the author’s consent of building drawings and models in architect competitions), the author relinquishes some of this control. For example, pictures may be reproduced and the work may be quoted from in other ways in the media.
  • If copies of the work are also published, the author relinquishes additional control. A practical example of this is the copying of lawfully obtained music files.

Once all these protection lines have been crossed, the author has still not relinquished the copyright. It has been reduced so that he/she must accept a certain limited utilisation of the work by others.

More information on copyrights, etc, is to be found at http://www.clara.no/.
See also Norwegian Act no. 2 of 12 May 1961 on copyright: http://www.lovdata.no/all/nl­1961051 2-002.html 

3. Moral rights linked to intellectual work and patents

The so-called moral rights are included in the exclusive right to both patents and intellectual work, in addition to the commercial rights. The moral rights entail a duty to state the name of the inventor/author when using the invention/work. In addition, the moral rights prevent the actual usage being offensive to the person concerned or the invention/work in itself.

The moral rights cannot be lawfully restricted in agreements to any great extent.

4. Trademarks

A trademark, such as a logo or name, is a mark that distinguishes an enterprise’s goods or services from those of others.

The right to a trademark is achieved by registration in the Trademark Register or by ensuring that the mark becomes commonly known in the market. The Trademark Register is kept by the Board of the Norwegian Industrial Property Office (the Patent Office). The benefit of registration is that you can easily prove your right to the trademark in question.

A trademark right is an exclusive right which means that others cannot use trademarks that may be confused with yours on goods or services of the same or a similar type to those for which the mark in question is registered or commonly known.

The trademark right is not limited in time provided the registration is renewed (every 10 years) or the trademark remains commonly known. For registered trademarks, an obligation to use the trademark within five years of the registration date also applies.

More information is to be found at http://www.patentstyret.no/.

See also  Act no. 8 of 26 March 2010 on protection of trademarks: http://www.lovdata.no/cgi­wift/wiftldles?doc=/app/gratis/www/docroot/all/nl-20100326-008.html 

5. Designs

The design protection protects the appearance and shape of a product or part of a product. The product’s technical function (idea) is not protected. If relevant, an application must be made to protect this by a patent. This protection was previously referred to as the model protection (mønstervern).

Design protection is achieved by registration with the Norwegian Industrial Property Office and is an exclusive right to utilise the design commercially. The conditions for legal protection are that the design must be new and that its overall visual impression must be different to that which was generally available prior to the application date. The right is valid for a limited duration.

See more about design rights on the Norwegian Industrial Property Office’s website: http://www.patentstyret.no/no/Design

See also  the Design Act: http://www.lovdata.no/all/nl-20030314-015.html 

Intellectual property law in employment relationships

1. Inventions in employment relationships - patent rights

Employees basically have the same rights to their inventions as other inventors. This is stipulated in section 3 of Act no. 21 of 14 April 1970 on employees’ inventions (Employees’ Inventions Act) http://www.lovdata.no/all/hl-19700417-021.html.

The right is in practice restricted by various provisions which give the employer such rights at the expense of the employee. Such restrictions follow from section 4 et seq of the Employees’ Inventions Act, and often also from the employment contract or other separate regulations (staff regulations, etc). Basically, compensation is to be paid to the employee for such a transfer of rights, see section 7 of the Employees’ Inventions Act.

The employer’s right to acquire inventions

The employer’s right to the invention depends on how close a connection there is between the employment relationship and the invention, and on whether the invention comes under the enterprise’s business area. The law operates with three levels of connection:

  • If the invention has been created in connection with a further defined work assignment, it is natural that an employer that has financed and made conditions suitable for the development of the ideas behind the invention is to be given the right to acquire the whole invention or part of it.
  • The invention may also have been created without any, or with a more remote, link to the work assignments. In such cases, the employer may demand to use the invention in its operations. If the enterprise wants to acquire a more extensive right, it has a preferential right to enter into an agreement with the inventor regarding this.
  • Regarding inventions that have been created outside the employment relationship, the employer has a preferential right to enter into an agreement with the employee regarding the acquisition of the rights. It will be a condition here that the utilisation of the invention is covered by the enterprise’s business area.

The formal conditions for being granted a patent are not affected by the fact that it is the employer that is the applicant. Inventors must in any case be named as such on the patent application. It is normal to have separate forms which document the transfer of the right to the invention between the parties to the employment relationship.

The employee’s duty to notify

Once an invention has been created, the employee must, pursuant to section 5 of the Employees’ Inventions Act, send the employer written notification of the invention without undue delay. The enterprise is thus to be given an opportunity to consider whether it will exercise its right to acquire the rights to the invention.

The employer’s response following notification

If the enterprise wants to acquire the rights to the invention, it must, according to section 6 of the Employees’ Inventions Act, provide written response to the inventor within four months of receiving notification of the invention.

It is important that the parties comply with these notification rules. A failure to provide clear notification and response from the enterprise may lead to vagueness and conflicts about who is entitled to the invention and whether there is anything to blame the parties for, especially if the opportunities for patent protection, and thus also the opportunity to be able to utilise the idea commercially, are lost.

In particular concerning universities’ and colleges’ rights to acquire inventions – the previous “lecturer exception”

Until 1 January 2004, lecturers and scientific personnel at universities and colleges have been  exempted from the Employees’ Inventions Act. Lecturers and other scientific personnel at such institutions are now, with a few exceptions, treated in the same way as other employees.

Following the amendment to the Act, institutions may demand that the right to commercially utilise inventions made by lecturers and scientific personnel as part of their ordinary work at universities and colleges is to be transferred from the employees to the institution.

University and college employees’ right to publish

In order to safeguard the “free right to publish”, however, it is up to such employees to decide whether the research results are only to be published or whether a patent for the invention is also to be applied for, see section 6. According to this section, they are given an opportunity to publish their inventions freely. If the researcher chooses to publish his/her invention, the novelty requirement which is a condition for a patent will prevent a patent from being granted and thus also prevent the institution from having an opportunity to establish an exclusive right to commercially utilise the invention.

The condition for the institution not acquiring the right to utilise the invention is that the researcher must publish his/her material within one year of the institution being notified of the invention’s existence for the first time, see section 5.

The special rules concerning transfer and publication are intended, among other things, to make the researcher and institution cooperate so that the inventions can be patented without this affecting the researcher’s opportunity to publish his/her results. Publication after a patent application has been filed does not prevent patent protection from being granted.

The employee’s right to reasonable compensation when rights are transferred

The employee is entitled to reasonable compensation if the enterprise acquires the rights to an invention. However, this does not apply if the value of the invention does not exceed that which could be expected based on the employee’s employment relationship.

The value is to be determined discretionarily, based on the specific circumstances of the case.

There is no overview of the normal practice for determining compensation. There is also little case law in this area. It can therefore be difficult to estimate reasonable compensation. One factor that particularly complicates this is that a number of years normally elapse between the date when an idea is conceived and the date when the idea may be commercially utilised. In addition, in order for the process to be successful, extensive venture capital is normally required, as is access to the market through a player that knows this market. Even if the technical idea is the actual core of the activity, the inventor’s contribution to the commercial potential may thus be relatively modest in the overall picture. Due to this and other factors, determining compensation to the inventor at an early stage is a very uncertain exercise. For this reason, section 10 of the Employees’ Inventions Act ensures the inventor an opportunity to raise the question of compensation again if crucial factors have changed significantly.

When determining the compensation, the Act stipulates that the following are to be particularly taken into consideration:

  • the value of the invention
  • the extent of the right that the employer has acquired
  • the employee’s employment conditions
  • the importance that the employment has otherwise had for the invention being made

The Association of Patent Attorneys in Norwegian Industry (NIP) has published a booklet on compensation for employees’ inventions. This booklet can be ordered from Tekna on e-mail  registrering@tekna.no

Mediation Board for Employees’ Inventions

If the parties do not agree on the question of compensation or the transfer of rights, either party may bring the matter before the Mediation Board for Employees’ Inventions. This Board’s task is to help the parties to arrive at a solution that both can live with, among other things by proposing a balanced settlement.

Read more about the Mediation Board and its working methods here:

http://www.patentstyret.no/no/Patent/Arbeidstakeres oppfinnelser/

Freedom to agree to transfer rights

The Employees’ Inventions Act’s provisions can usually be waived by agreement, see section 2. However, the employee’s right to reasonable compensation when rights to inventions are transferred cannot be validly waived by such advance agreements.

It is not unusual for an employer to offer new employees employment contracts that restrict the employee’s rights pursuant to the Act. Tekna is very sceptical to such uncritical restrictions in that they have a direct negative effect on the employee’s interests and are also used in cases where the enterprise has no real expectation that the employee concerned will make inventions, etc, based on the employment relationship. We experience that some employers exploit their normally strong negotiation position to obtain unreasonable advantages in this field.

We also believe that reducing employees’ opportunities to be valued for their creative contributions by, among other things, depriving them of ownership of their own ideas can have the effect of restricting innovation. We believe the Act in general creates a satisfactory balance between the parties’ interests. A suitable solution will therefore normally be to allow the contract to refer to this Act’s provisions as being applicable to the relationship between the parties. Tekna expects enterprises which want to have agreements that give them greater rights than those stipulated by the Act to be able to give an account of their specific need for different regulation.

2. Copyright in an employment relationship

The author has the exclusive right to his/her works when they are created. Commercial utilisation of such intellectual work in the employer’s operations therefore requires the complete or partial assignment of copyrights.

For intellectual work that is created by employees as part of the employment relationship, it is generally assumed that the employer is entitled to utilise the work. Even if this is not regulated in separate agreements and also does not follow from legislation, it is nonetheless fully applicable.

The main rule concerning the assignment of copyright in an employment relationship is worded as follows:

“The prevailing principle in Norwegian law is that the copyright to a work created in an employment relationship may, in the absence of any other agreement, be regarded as having been assigned to the employer to the extent that this is necessary for the employment relationship to achieve its objective and that creating such work is also part of the employee’s tasks in the employment relationship.” (Proposition to the Odelsting no.84, 1991-92 p. 21)

When assessing questions of an assignment of copyrights pursuant to this rule, emphasis will be placed on the result not appearing to be unreasonable for the author.

Exemptions for posts at universities and colleges

It is assumed that the non-statutory rule concerning the transfer of rights in an employment relationship does not apply in full to scientific work that is created by researchers at universities and colleges in connection with their work at the institution. The purely scientific objective relating to the job will be achieved by the research results. The employer does not acquire the right to commercial utilisation pursuant to the general objective-based main rule.

In research projects that take place in cooperation with a third party, however, there will often be an express or implied assumption that the right of control is transferred to a third party, or is shared with the institution, or that other restrictions on the researcher’s utilisation of the rights apply.

Exception for computer programs

A special provision in section 39 g of the Copyright Act, relating to computer programs, states that the rights are transferred to the employer unless otherwise agreed, i.e. the opposite of that which otherwise applies.

The Act otherwise contains no provisions concerning the assignment of copyright in employment relationships.

Computer programs can be regarded as intellectual work pursuant to section 1, subsection two, no. 12 of the Copyright Act. At the same time, such programs can also achieve patent protection. Something that “only” comprises a computer program is not normally counted as an invention, see section 1, subsection two of the Patents Act. Among other things, this means that the “lecturer exception” is not applicable to computer programs. Pursuant to section 39 g of the Copyright Act and with the restrictions that otherwise follow from the Act, therefore, the copyright to computer programs created by a researcher at a university while carrying out tasks that are covered by the employment relationship or pursuant to the employer’s instructions is transferred to the employer unless otherwise agreed. Nor does the author have any right to publish, even if the program qualifies for patent protection. However, such a right to publish may be safeguarded in other regulations.

Doubt about what the employment relationship entails regarding the transfer of rights to works

Copyright law operates with a speciality principle regarding the interpretation of agreements to transfer rights, see section 39 a of the Copyright Act. The acquirer of rights pursuant to the agreement is not given any greater rights than those expressly stated in the agreement.

In connection with the transfer of rights in an employment relationship, this means that the right to work which is linked to the enterprise but which must be excluded from the author’s work assignments and expected performance in relation to his/her job is not covered by the employer’s right to acquire rights. If there is any doubt about whether the employment relationship covers the performance represented by the work in question, the issue is to be decided in the employee’s (author’s) favour.

If we compare this to inventions, we see that it is the opposite rule to that which applies to inventions (according to the Employees’ Inventions Act). The difference is in part stated to be because of the assumed stronger personal characteristics and links to the author that apply to intellectual work compared to those which normally apply to ideas of a purely technical nature.

Agreements to transfer rights to intellectual work – right to compensation

Apart from moral rights, see above, the author is free to make agreements to transfer the rights to his/her work, including through employment contracts. This may also be done for work that has not yet been created, but which arises later on through the employment relationship.

Such agreements are normal in employment relationships. They may cover the full or partial transfer of the exclusive rights. Unlike that which applies pursuant to the Employees’ Inventions Act, there is no body of law that ensures the author any separate compensation for such a transfer apart from the salary, etc, stated in the employment contract unless this contract, or another contract, stipulates a right to remuneration.

Tekna advises its members to refuse to allow the employment contract/staff regulations/ personnel manual to stipulate the transfer of copyrights free of charge. For rights other than those that, according to the abovementioned objectives rule, are to be transferred without any further statement, the employer should pay reasonable compensation here too, similar to that for inventions.

Allowing the employment contract to stipulate the same method of calculating such compensation as that stated in section 7 of the Employees’ Inventions Act should take into account both parties’ needs for predictability and balanced contributions.

Modified date: Tuesday, March 17, 2015