TIPO issues decision in dispute over ownership of on-duty invention

In Taiwan, a patent invalidation case is first examined at the Taiwan Intellectual Property Office (TIPO). TIPO's decision can be appealed to the Petitions and Appeals Committee and then the IP Court. As an administrative agency, TIPO does not usually rule on a patent ownership dispute in an invalidation action, leaving such disputes – which are legal issues rather than technical issues – to the courts. However, TIPO recently issued a decision regarding patent ownership on its own, based on existing evidence. Such practice by TIPO could have a major effect on patent practice and thus the employer-employee relationship should be dealt with carefully in order to preserve the correct rights.

The on-duty invention provisions – also known as 'service inventions' – differ from country to country. According to Article 7 of the Taiwanese Patent Act, where an invention, utility model or design is made by an employee in the course of performing his or her duties, the right to apply for a patent and the patent right itself shall be vested in the employer, which shall pay the employee reasonable remuneration. However, where there is an agreement providing otherwise, such agreement shall prevail. In other words, the employer owns the right to apply for a patent and the patent right. If the inventor and applicant disagree over the patent ownership, the employment relationship must be clarified. Was the inventor hired by the applicant to develop the technology of the patent at issue? What if the inventor developed the invention independently when he or she was hired by the company?

In the case at hand, the employer filed the invalidation action, asserting that the employees had been hired to research and develop the technology of the patent at issue, and thus they were not entitled to apply for and own the patent. The employees claimed that they had just “cooperated” with the employer after the invention of the patent at issue was completed, and that they had been hired by the employer to develop another product. During the invalidation proceedings, TIPO asked the employer to provide documents proving the employment status and relevant agreements, but it failed to do so. Since the evidence provided by the employer did not prove that the inventors were hired to develop the technology of the patent at issue, TIPO decided that the patent at issue, which was held by the inventors, could not be invalid based on the employer’s patent ownership assertions.

This decision shows that the mere fact that employees were hired by an employer is insufficient to prove that the invention completed during the inventors’ employment was an on-duty invention. The employer must prove that the inventors were hired for the research and development of the patent's technology.

Thus, employers and employees that wish to secure their IP rights regarding on-duty inventions should deal carefully with the agreement between them. Such agreement should include a clause clearly describing the ownership of any IP rights (eg, the right to apply for the patent). If certain inventions, technologies or knowledge are involved in the employment, the employer should be sure to describe the status of such inventions and the duties of the employee in advance. Further, records should be kept of the research and development carried out during the employment. Once a patent ownership dispute arises, such records will help to secure what belongs to whom. Otherwise, ownership might be taken away by TIPO.