Introduction to Patents

Introduction to Patents

Contents

What is a patent?

Patents protect inventions. 'Invention' is not a defined term, but it can be a product or a process. Patents generally cover products or processes that contain 'new' functional or technical aspects. They are concerned with how things work, how they are made or what they are made of.

A patent gives the holder of the patent the right to stop competition for the invention for a limited period. The right to stop competition exists only in the country for which a patent has been granted; for example, a UK patent will only enable the owner to stop competition in the UK.

Patent rights make it illegal for anyone except the owner or someone with the owner's permission to make, use, import or sell the invention in the country where the patent was granted.

A UK patent can last for up to 20 years, subject to renewal fees being paid.

Who can own a patent?

The owner can be the inventor, the inventor's employer or someone else who has obtained the patent rights.

Inventions by employees

The following relates to inventions made by an employee after 1 June 1978 where, at the time the employee made it:

(a) The employee was mainly employed in the UK; or

(b) The employee was not mainly employed anywhere or their place of employment could not be determined, but their employer had a place of business in the UK to which the employee was attached, whether or not they were also attached elsewhere.

An invention made by an employee in the circumstances described above belongs to the employee's employer if either of the following is true:

(a) It was made in the course of the employee's normal duties for the employer or in the course of other duties specifically assigned to the employee, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of those duties.

(b) The invention was made in the course of the employee's duties for the employer and, at the time of making the invention, because of the nature of the duties and the particular responsibilities arising from them, the employee had a special obligation to promote the interests of the employer's undertaking.

So, this (in broad terms) covers 2 cases - the first where the employee is essentially employed to invent; and the second where the employee holds a senior managerial position and so has special responsibilities to their employer. The second case has, for example, been applied to a chief technician who was employed to give technical advice on the design and development of soda siphons, but not to design the particular kind of siphon that he actually invented. The outcome would likely have been different if, for example, the siphon had been invented by a junior technician.

Any other invention made by an employee shall belong to the employee.

Any term in a contract entered into by the employee with or at the request of the employer which diminishes his/her rights in inventions made by him/her is unenforceable.

Compensation

As a result of an employee's invention, an employer can be required to pay compensation if the invention or the patent for it (or the combination of both) is of outstanding benefit to the employer and it is fair that the employer should award compensation to the employee.

For benefit to be judged 'outstanding', it must be something out of the ordinary when considered in the context of the employer's activities, and not something normally expected to arise from the duties that the employee is paid for. So, to assess whether the benefit is outstanding, it is necessary to look at the employer's undertaking, which may be the whole or a division of the employer's business, and establish the benefit to the employer taking into account the size and nature of that business and all the surrounding circumstances.

However, an employee with an invention cannot take advantage of this if they and their employer are covered by a relevant collective agreement regarding compensation payment for such inventions. Within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992, such an agreement would have to be made by or on behalf of a trade union to which the employee belongs, and by the employer or an association to which it belongs, and would have to be in force at the time of the making of the invention. The agreement must relate to inventions and employees of the same description as those in question. The employee's rights to any compensation are then governed by the agreement.

Compensation to an employee should be a fair share (taking into account all the circumstances) of the benefit that the employer has gained, or may reasonably be expected to gain, from any of the following:

(a) The invention in question;

(b) The patent for the invention;

(c) The transfer or grant of (i) the property or any right in the invention, or (ii) the property in, or any right in or under, an application for the patent, to a person connected with the employer. In this case, the amount of benefit is the amount reasonably expected to be derived by the employer if the person had not been connected with it. The person in question must be assumed to be an equivalent non-connected person operating in the appropriate market at the appropriate time, rather than a person with the same attributes as the real person without the connection to the employer.

Transferring patent rights

As with any other property, a patent may be bought, sold, transferred or inherited. If you decide to pass the ownership to someone else, a document transferring the rights must be signed by or on behalf of you ('the assignor') and the buyer ('the assignee') for the transaction to be valid.

You or the assignee will also need to file form 21 and the appropriate fee to record the transfer of ownership. If you fail to do this, the transaction will not be completely effective. Also, if you don't sign the form, the UK Intellectual Property Office will need to see documentary evidence of the transaction before they record it on the Register of Patents.