13 June 2019

Employees’ inventions – who owns them when invented outside work hours?

In an important decision, the Intellectual Property Court (IPEC) has examined the right to inventions made by employees, where the invention was in part conceived by an ex-employee in his own time at home.

Background to the dispute

Section 39 of the Patents Act 1977 provides that an invention made by an employee belongs to the employer if they are made ‘in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties.’

But what if the invention was made by the employee in his own time at home and using his own equipment, in this case his computer?  This was precisely what the court had to consider in Prosyscor Ltd v Netsweeper Inc & Ors [2019] EWHC 1302 (IPEC).

The ex-employee, Mr. Kite, had been working remotely in the UK as a sales consultant and software developer for Canadian company, Netsweeper. The invention in question concerned a method of discriminating between requests to access a website. The dispute concerned the entitlement to an international patent application, and the national and regional applications derived from it.

Mr. Kite had first come up with the idea for the software application, and then another of Netsweeper’s employees had developed the invention to the point at which the international patent application was made.

The decision

HHJ Hacon considered the law on entitlement to a patent under an international convention as stated in BDI Holding GmbH v Argent Energy Ltd and another [2019] EWHC 765 (IPEC).  This informs us that it is first necessary to identify the inventive concepts disclosed in the patent application through the eyes of the skilled person, and then decide who devised them.

The judge found that the inventive concept of claim 1 of the patent application was devised by both the Mr. Kite and another inventor and that the other claim in issue was devised solely by the other inventor.

However, Mr. Kite’s contribution was found to have been made as part of his duties as an employee.  This was supported by the fact that he had posted his idea on an internal company website after commencement of his employment.

This sharing of information by the employee with the employer will be a key fact to guide on how inventive work is assessed as being linked to employment or not.  In particular, the judge noted how the Netsweeper intranet site where Mr. Kite had shared his ideas was known within the company as a useful tool for pooling ideas for development.

Perhaps unsurprisingly, it is a seemingly high hurdle for employees to be able to lay claim to ownership of inventions conceived in the course of their normal duties but made at home and out of normal working hours.  The judge stated that while the time and place of the devising of an inventive concept may be relevant to an assessment under Section 39, they are secondary considerations.  The judge went on to say that in a case where there is doubt as to whether the acts were conducted in the course of normal duties, the fact that they were done at home and outside of normal hours may tip the assessment to a finding that the invention was not made in the course of normal duties.

However, where as in this case, the work leading to the invention was very much the sort of work the employee was paid to do, the fact that the work was done at home and out of hours was not relevant.  The judge emphasised that “acts of a nature such as to be within the normal course of an employee’s duties do not cease to be so merely because the employee decides to carry out those normal duties at home and/or outside office hours and/or on his own equipment.”

The judge’s ruling and common-sense approach to ownership of employee inventions should provide comfort to companies at a time when an increasing number of employees are working both flexibly and often remotely.

The full decision from the IPEC can be read here.