Supreme Court ruling on remuneration for employee inventions creates more uncertainty

The practical application of Polish law with regard to employees’ inventions was already difficult, with much hinging on the major question of whether an employee’s right to extra remuneration for the use of an invention they have created depending on whether the employer obtained a patent or – at least – whether the invention was patentable. A positive answer to this question significantly limited the scope of legitimate employee claims. However, a 2020 judgment (II PK 173/19, 8 January 2020) by the Polish Supreme Court answered the question negatively – contrary to its previous rulings – adding fresh uncertainties to existing ones, instead of mitigating them.   

Employee inventions under Polish law

Under Article 11(3) of the Polish Industrial Property Law (IPL), where an invention is created during an inventor’s employment or other contract, it is not the inventor who is entitled to obtain a patent, but the employer or the contractor – unless the parties agree otherwise. This solution might seem unfavourable to hired inventors but, as a form of compensation, Article 22(1) of the IPL grants them (again, barring agreement to the contrary) the right to remuneration for the entrepreneur’s exploitation of their invention. Under Article 22(2), the amount of remuneration is, by default, established as an equitable proportion of the entrepreneur’s benefit from the invention.

Remuneration for invention or remuneration for exclusive right?

The provisions referred to above use the term ‘invention’, which is not defined. Article 24 of the IPL states that: “Patents are granted - irrespective of the field of technology - for inventions that are new, have an inventive step, and are capable of industrial application.” According to the dominant view, this implies that patentability is not essential for a technical solution to be recognised as an invention under the terms of the law; that is, there are inventions that are not new and do not have an inventive step. What is completely undisputed is that there are inventions that are not patented, even though they are patentable. However, in older case law, an employee’s right to remuneration for an invention was nevertheless interpreted as intertwined with the employer’s gain in exploiting the invention exclusively under the protection of a patent.  

The Polish Supreme Court’s new stance 

In the case of an employee who sought remuneration from an employer that did not obtain the patent for an invention they created after the patent application was denied by the Polish Patent Office on grounds of lack of novelty, the Supreme Court took a surprising stance. Its judgment means that employees are entitled to remuneration, regardless of whether the employer actually obtained a patent. In the court’s view, even filing a patent application should be considered a clue that the employer has recognised a technical solution as an invention and that they expect to benefit from it. The employee’s right to remuneration arises ex lege as a result of the employer’s benefit, and not as a consequence of, or on the condition of, initiating patent proceedings.

Consequences for patent litigation in Poland

The Supreme Court’s new approach may very well result in an avalanche of employee claims. With the judgment in question, an objective, formal criterion of obtaining a patent has been replaced with a subjective one. It is now virtually impossible for employers to assess the legal risk of remuneration claims. Increased attention is recommended, as employers must now bear in mind that even if they do not have a portfolio of registered industrial property rights, they may still be exposed to remuneration claims.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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