Employee inventions are subject to the Act on the Right in Employee Inventions¹ in Finland. The Act is partly compulsory and governs:
- rights to an invention;
- invention remunerations;
- employee inventors' rights and obligations;
- employers' rights and obligations; and
- claims and disputes relating to employee inventions.
This article, the third in a series on employee invention issues², focuses on employers' rights and obligations in Finland.
Rights to inventions and pro-inventor nature of the Act
According to article 4 of the Act, the rights to an invention belong to the inventor, even when the invention arises during the inventor's employment relationship. However, the employer is entitled to acquire the rights to the invention in whole or in part if the invention results from an employee's activity in the performance of their duties or is essentially a result of an employee's experience in the enterprise or institution of their employer or an enterprise or an institution belonging to the same consolidated corporation. This also applies when the invention is a result of a task assigned to the inventor employee more specifically (for further details, see "Employee inventions in Finland: ensuring proper transfer and assignment of IP rights to employers").
The Act is quite pro-inventor and secures the inventors' rights under an employment relationship. Although the Act does set employee inventors the obligation to notify their employer of inventions and provide detailed information about them (for further details, see "Employee inventions in Finland – inventors' rights and obligations"), there are more stringent obligations on the employers' side.
Rights of employers
The employer is always entitled to be notified of an invention made by their employee and, if the invention falls under the scope of the Act, to acquire rights to the invention in whole or in part depending on the rules applicable to the employer's rights to an invention. The employer's right to be notified of an invention, as well as the obligation on the part of the employee inventor to provide sufficient details of the invention, enable the employer to evaluate the invention for use and exploitation.
The employer is also partially protected in situations where an employee transfers to a different employer. If a patent application is filed within six months of the employee transferring to the new employer and an invention according to the application filed would have been a one to which the previous employer had a right to acquire the rights under the Act if the employment relationship had continued, the invention is considered to have arisen under the previous employment relationship unless the inventor can prove otherwise. If the inventor cannot establish otherwise, the patent application must be assigned to the previous employer.
Obligations of employer
The Act sets certain obligations for the employer that should be carefully considered to ensure that the rights to an invention made by an employee inventor are properly transferred and assigned. Namely, once the employer has been notified – preferably in writing – of an invention by the employee inventor, the Act stipulates that the employer has a four-month period to consider whether they wish to acquire rights to the invention. According to prevailing practice, the period starts running when the inventor has provided sufficient details of the invention, enabling the employer to evaluate it. Unless an invention process is well established and managed, there is a substantial risk that inventions may be lost.
The employer is also obliged to pay a reasonable remuneration to the employee for each invention to which they acquire the rights. This right of remuneration of the employee inventor cannot be waived with any prior agreement and properly executed waivers are uncommon in practice. It should also be kept in mind that an underlying assumption exists in the Act such that if the employer acquires the rights to an invention, a patentability assumption is made. This means that unless proven otherwise, the invention is considered patentable.
The employer is also obliged to provide the employee inventor with such information necessary to calculate and evaluate reasonable remuneration. This includes, without limitation, information regarding any granted patents and, for example, manufacturing and sales information such as the amount and prices of products or goods covered by the invention.
Employers must pay attention to managing invention processes in order to secure their rights under the Act as it is quite pro-inventor by nature. To avoid uncertainty, especially in terms of crucial time limits and ensuring that the rights are being properly transferred and assigned to the employer, proper invention management processes should be set up. Written processes are always preferable.
(2) For earlier articles in the series, see:
Suvi Julin works in Berggren as a Lawyer, Patent Attorney, European Trademark and Design Attorney. Suvi has wide-ranging experience in the field of intellectual property and technology law. Suvi advises clients on a variety of contentious and non-contentious intellectual property matters including trademarks, designs and patents as well as in copyright, contractual, employee invention and privacy matters.