If an employee in your company designs a chair or creates a new software programme, who owns the intellectual property rights vested in these creations? The employee or your company? In many companies things are created, ranging from high tech inventions to works of art. Often, these works and inventions can be protected by intellectual property rights such as copyrights or patent rights.
In this blog we explore the ownership of intellectual property rights of things created by employees according to Dutch and European law.
Copyright law and employees
Copyright is still largely regulated on a national level and there does not (yet) exist all-encompassing (harmonized) European copyright legislation. Copyright protects works. Under Dutch law, a work is no defined concept and can apply to almost any creation, ranging from books, paintings and plays, to software and furniture. The criterion for copyright protection, which was developed in case law, is that a work should be the author’s own intellectual creation.
According to the Dutch Copyright Act, the person who creates a work becomes the owner of the copyrights vested in the work. However, when a work is created by an employee in the course of his employment, the Dutch Copyright Act stipulates that the employer is the owner of the copyrights. Making works can be part of an employee’s job description, his/her factual daily activities or a part of a specific assignment.
So the copyrights in a website created by a web designer and a chair created by a designer will in principle be owned by the employer. If a secretary writes a novel, however, she herself will own the copyrights as she is not employed to write books. Parties can make different arrangements about the ownership of copyrights, for example in the employment contract.
Patent law and employees
Patent law protects inventions. Patents need to be applied for. In case an invention meets the relevant criteria, such as novelty and inventive step, a patent can be granted for the invention. The European Patent Convention – regulating patent law on a European level – states that in case the inventor is an employee, national law shall determine which party is entitled to apply for a patent for the invention. Under Dutch law, this is determined by the provisions of the Dutch Patent Act.
In case an employee invents something, he is entitled to apply for and claim a patent for the invention. However, in case it follows from the nature of the employment that the employee is employed to invent, the employer is entitled to apply for a patent for the invention. It will for instance be in the nature of the employment to invent if the employee is working in the R&D department. In case the employer is employed by a university, higher educational or research institution, the Dutch Patent Act determines that these respective institutions will be entitled to the patent for these inventions.
Inventions can be worth much money and a company can benefit greatly from them. The employee-inventor is entitled to a remuneration for his invention, but this remuneration is deemed to be included in his wages, according to the Dutch Patent Act. However, the Act determines that the inventor is entitled to a reasonable sum of money in case the invention represents a monetary value that is such that the remuneration received by the employee through his wages cannot be held to be sufficient. The Act does not specify what the value of the invention should be in order for the employee to be entitled to an additional remuneration. The provision in the Dutch Patent Act is likely to be reserved for inventions which represent an unexpectedly high value.
Design law and employees
Design law is regulated on a European and Benelux level. Benelux legislation regulates design law for Belgium, the Netherlands and Luxemburg. A design right can be registered or unregistered. Designs which are novel at the time of their introduction on the market and create a different overall impression on the public than the designs which already exist at that time, can enjoy protection under design law.
With regard to designs, similar to copyright and patent law, the relevant legislation determines that in case a design is created by an employee in the course of his employment, the employer will be entitled to the design. A design is created ‘in the course of the employment’ where, similar to copyright law, the creation of designs forms part of the employment of the employee.
The employer who is regarded as the designer, also has the right to file for a registered design right. Dutch case law on this point explicitly states that for the application of this rule, it is not necessary that a registered design right has been applied for. Therefore, in case a design has been created by the employee, the employer is regarded as the designer, also where the design is an unregistered design.
Trade mark law and employees
Similar to design law, trade mark law is regulated on a European and Benelux level. A trade mark is used to distinguish goods and services from one undertaking from those of other undertakings. In case an employee would create a name or logo, for example to use as a trade mark on a product, this alone in principle does not create any trade mark rights in the EU. The name or would first need to be applied for and registered with a trademark office.
Trade marks can be applied for by anyone. Unlike copyright, patent and design law, the European and Benelux legislation on trade marks does not contain a provision with regard to employees. The employer/company could in most instances register the trade marks created for its business. A name or logo could (also) be protected by copyright law if it meets the criteria for protection. In that case the provisions set out above also apply.
An employee could, however, apply for and obtain a trade mark registration for a sign which he created during the course of his employment. In case the sign is valuable for his company, the company may try to have the trade mark transferred and registered in its own name, by issuing a claim against the employee on the basis that the trade mark has been applied for in bad faith. Bad faith can be difficult to prove.
Due to the lack of a regulation regarding employee-created trade marks, it is advisable to include in an employment contract that all intellectual property rights created by the employee are exclusively owned by the employer and that only the employer is entitled to apply for registered intellectual property rights.
Questions? Please feel free to contact our intellectual property lawyers
Should you have any questions or require further information about the ownership of the IP rights where something is created by an employee or about intellectual property in general, please do not hesitate to contact Evert van Gelderen or Elise Menkhorst.