Historical overview of the employee inventions regime

With the law of January 2, 1968 (Law No. 68-1 aimed at promoting inventive activity and amending the patent regime), there were no specific provisions regarding employee inventions (even though provisions existed in the preparatory works, they were removed during the vote).

For a long time, the courts therefore « created » the law to address this complex issue.

A case law-based regime distinguished, at the time, between « service inventions » (which belonged jointly to the employer AND the employee) and other inventions (which belonged exclusively to the employee).

In 1978, the law enshrined this case law-based regime (roughly), which is now codified in Article L611-7 of the Intellectual Property Code.

Finally, additional remuneration was made mandatory (by the law of November 26, 1990) for « mission inventions » (a concept we will define shortly… stay tuned!).

Ownership of inventions

The principle of invention ownership

Article L611-6 CPI states that the right to the patent belongs to the inventor or to their successor in title: we might think that an employee’s invention belongs to them.

However, under certain conditions, the employer may become the successor in title of the employee.

The special regime for employees

According to Article L611-7 CPI, a distinction must be made between three categories of inventions for employees.

Mission inventions

Inventions are classified as mission inventions when they are made (Article L611-7 CPI, point 1):

  • in the performance of an employment contract involving an inventive mission (i.e., a general and early instruction from the employer) that corresponds to the employee’s actual duties (e.g., with regard to their job description, Paris High Court, Chamber 03, Section 03, October 16, 2001), and/or
  • within the framework of studies or research explicitly (but not necessarily in writing) assigned to them (Paris High Court, Chamber 03, Section 03, March 16, 2005).

The latter case is often more difficult to prove, as the instruction to invent given to the employee is late (for example, during a mission) and evidence is harder to gather.

Here, we are squarely within the core of the employment contract: the instruction to invent is given directly by the employer to one of their employees.

In this situation, the right to the patent belongs to the employer (Article L611-7 CPI, point 1).

This right is automatically assigned to the employer by law, without any action on their part.

Attributable inventions outside the scope of employment

In this case, the inventions must not fall under the first category and must be made (L611-7 CPI, point 2):

  • either in the course of the employee’s duties,
  • or in the field of activity of the company, or through the knowledge or use of the company’s specific means (the term « specific » in Article L611-7 CPI, point 2 appears to exclude an employer’s ability to claim an invention if the employee merely used a company pen to write…).

Here, we are at the periphery of the employment contract: indeed, there is no instruction from the employer to invent, but it turns out that their employee invents something.

In this situation, the employer may claim the right of attribution of the invention, but this attribution is not automatic: the employer must explicitly request it (L611-7 CPI, point 2 together with R611-7 CPI) within a period of 4 months from receipt of the employee’s invention disclosure (see the formalities below).

Non-attributable inventions outside the scope of employment

The inventions covered by this category are all other inventions not falling under the above categories (L611-7 CPI, point 2, first sentence).

In this situation, the right to the patent simply belongs to the inventor.

Relevant inventors

Condition No. 1: Inventors

An inventor is someone who conceives, devises, and realizes the invention.

Therefore, a person who merely sets the technical problem to be solved (i.e., defines the objective to be achieved) is not an inventor. The same applies to someone who merely carries out experiments.

In practice, this can be challenging, but factual elements may help (keeping laboratory notebooks, interacting with the IP firm for drafting the patent, imprecise instructions given by their hierarchy, C. Cass. com., 12 February 2013, No. 12-12898).

Condition No. 2: Employees

The relevant inventors are employee inventors, i.e., those who have an employment contract under French law (possibly unwritten) at the date of the invention (C. Cass. soc., 2 June 2010, No. 08-70138) and who are subject to hierarchical instructions in return for a salary.

The following are thus excluded:

Formalities to be observed by the employee when disclosing an invention

Employee’s duty

As mentioned above, the employer has certain rights and must be allowed to exercise them properly.

The employee must immediately inform (R611-1 CPI) the employer by registered letter with acknowledgment of receipt (or any other means allowing proof of sending R611-9 CPI) and provide sufficient information to enable the employer to assess the classification of the invention (R611-2 CPI) into one of the three categories of inventions we have just presented.

Employer’s Decision

The employer must decide on the classification of the invention within 2 months from the date of receipt of the invention disclosure by the employer (R611-6 CPI). Failing this, the classification is deemed accepted.

If the employer classifies the invention as an « attributable non-service invention, » they have an additional 2 months (i.e., 4 months from the date of receipt of the disclosure) to claim assignment (R611-7 CPI).

Disagreement

Naturally, in practice, it is quite likely that the employee and the employer may disagree on the classification of the invention into one of the categories. In the event of such a disagreement, it is possible to refer the matter to the CNIS (conciliation commission known as the « National Commission for Employee Inventions, » established under Article L615-21 CPI), and in this case, the time limits mentioned above are suspended (R611-8 CPI).

Consequences of Non-Compliance with Formalities

For the Employee

If the employee fails to comply with these formalities, no sanction is provided for in the statute.

However, damages may be sought by the employer in the event of a patent filing by the employee to the employer’s detriment.

In any case, this does not constitute gross misconduct (C. Cass. soc., January 15, 2015, No. 13-14811) that could justify dismissal.

Some have sought to characterize the employee’s « non-disclosure » as misconduct that would effectively deprive the employee of any additional remuneration. However, this misconduct is not considered sufficiently serious to deprive the inventor of their right to remuneration (Paris Court of First Instance, 3rd Chamber, 4th Section, January 30, 2014, Vincent G. v. ADER Languedoc-Roussillon et al).

For the Invention

The Cour de cassation further states (C. Cass. com., December 18, 2007, No. 05-15768):

[…] the formalities prescribed by Articles L. 611-7, R. 611-1 et seq. of the Intellectual Property Code are not provided for under penalty of nullity [of the patent].

Presumption of Inventorship

The inventors named in the patent are presumed to be the true inventors.

However, this is a rebuttable presumption that may be overturned by evidence to the contrary (Paris Court of First Instance, 3rd Chamber, 3rd Section, May 16, 2014; Jacques V. v. Kadant-Lamort). Thus, if an employer has designated an employee as an inventor, they must produce convincing evidence to demonstrate to the court that the employee was, in fact, not a true inventor.

Employee-Employer Relations

Employee Notification

Since the Macron Law of August 6, 2015, the employee must be informed (L611-7 CPI, 1°):

  • of any filing of an intellectual property title application;
  • of any grant of an intellectual property title.

Tensions as Grounds for Dismissal?

While employee-employer conflicts often arise upon the employee’s resignation, dismissal, or retirement, they may also occur during the performance of the employment contract.

In such cases, it is important to distinguish between the circumstances: a legal action brought by the employee (even if it aims to halt a production line and thus indirectly harm the employer) cannot constitute a legitimate ground for dismissal (C. Cass. soc., September 17, 2014, No. 13-15930), unless the employee’s claims are abusive.

Additional Remuneration / Payment of Fair Compensation

The applicable law

One of the issues that arises here is the application of the law over time.

For example, imagine that an invention is made before the 1990 law, but the filing of the patent is done after that same law. Which law should apply?

According to the Cour de cassation, the applicable regime must be assessed as of the date of the creation of the invention and not the date of grant of the patent (C. Cass. civ., 20 September 2011, n°10-20997).

This solution, satisfactory from an intellectual standpoint, may nevertheless pose evidentiary challenges. How can the exact date of creation of the invention be determined? It will then be necessary to look through email exchanges, work meetings, etc.

Triggering event

It is therefore important to determine from which point the additional remuneration provided by law is due:

  • At the time of the invention?
  • At the time of the patent filing?
  • At the time of exploitation of the invention/patent?
  • At the time of grant of the patent?

The courts consider that the inventions referred to in Article L611-7 of the IPC are patentable inventions, whether or not a patent is filed, and whether or not exploitation takes place (C. Cass. com., 18 December 1984, n°83-11677, or C. Cass. civ. ch. com., 20 September 2011, n°10-20997).

The different remuneration regimes

Service inventions

The law provides for an « additional remuneration » in the context of service inventions (L611-7 IPC, 1°).

There is no definition of this term in the statutes, and it is necessary to look to case law to form an opinion.

Inventions before 1990

Before 1990, there was no law requiring additional remuneration.

It is therefore necessary to look at collective bargaining agreements:

Inventions after 1990

Since 1990, the additional bonus is not optional. It is mandatory and must be provided for (L611-7 IPC):

  • by collective bargaining agreements,
  • company agreements, and/or
  • individual employment contracts.

However, it must be noted that many collective bargaining agreements still do not systematically provide for this remuneration, and employment contracts are often silent on this point.

If the collective bargaining agreement sets certain conditions for this remuneration, the relevant article of the collective bargaining agreement must be considered null and void (C. Cass. com., 22 February 2005 n°03-11027, or C. Cass. com., 12 February 2013, n°12-12898), regardless of whether a patent has been filed or granted.

The court will then be free to determine the additional remuneration as it sees fit (often in a manner favorable to the employee, see the section « Method of calculating the additional remuneration« ).

Case of attributable non-service inventions

For attributable non-service inventions (L611-7 CPI, 2°), a « fair price » must be paid to the employee.

This fair price must be determined based on the initial contribution of the parties involved and the industrial and commercial utility of the invention (Court of Appeal of Colmar, 2nd Civil Chamber, Section A, January 9, 2013, Case SNCF and L611-7 CPI, 2°).

Case of non-attributable non-service inventions

In this latter case, as the invention remains the property of the inventor, no remuneration is due to the employee in this regard.

Statute of limitations

Duration of the statute of limitations

Most courts consider the additional remuneration to be a wage claim (Cass. com., June 12, 2012, No. 11-21990 or Cass. com., January 26, 2012, No. 10-13825).

The statute of limitations for this type of claim is:

Commencement of the statute of limitations

Does the statute of limitations begin:

  • From the creation of the claim (i.e., the invention)?
  • From the employee’s knowledge of the exploitation of the invention and from the moment the claim would be determinable?

In light of the extensive case law on the subject (and the new wording of Article L3245-1 of the Labor Code), it appears that proponents of the commencement of the statute of limitations on the day the claim would be determinable prevail (Cass. soc., May 5, 2004, No. 02-13318, Cass. com., February 22, 2005, No. 03-11027, Cass. soc., January 26, 2012, No. 10-13825, Cass. com., June 12, 2012, No. 11-21990).

Methods for calculating additional remuneration

Common remuneration systems

Today, many companies provide for additional remuneration.

A 2016 INPI study provides interesting indicators for understanding the methods of calculating this remuneration (Employee Inventions Remuneration – Practices in France – Analyses by the Intellectual Property Observatory – October 2016).

Here are three self-explanatory graphs:

Timing of additional remuneration
Timing of additional remuneration
Types of additional remuneration
Types of additional remuneration
Amount of additional remuneration
Amount of additional remuneration

Optional preliminary procedure: the CNIS

If the employee feels aggrieved (i.e., they have received nothing or not enough in their view), they may freely choose (Cour d’appel de Lyon, 1re ch. civ., sect. A, 27 September 2012) to refer the matter to the CNIS or the Paris District Court (TGI).

If the CNIS is seized, the employee will have a one-month period from the date of the CNIS’s proposal to refer the matter to the Paris District Court (L615-21 CPI). Otherwise, the CNIS’s proposal will constitute a final agreement between the parties.

Calculation method used by the judicial courts

In the absence of a synthesis of CNIS proposals (which are confidential), we will summarize the decisions of judicial courts regarding the calculation methods for this additional remuneration.

Patent bonus / exploitation bonus

The methods used may vary significantly and can be applied cumulatively or alternatively depending on the circumstances:

  • determination of a « lump sum » for the invention (i.e., often referred to as a « patent bonus« ) ;
  • determination of a bonus based on the commercial success of the invention and its exploitation (i.e., often referred to as an « exploitation bonus« ).

Average amounts

By way of illustration, courts may award a « patent bonus » (i.e., applicable even if the invention is not exploited):

Similarly, courts may award an « exploitation bonus » as follows:

It should be noted that the differences between these amounts are partly explained by the economic interest and commercial success of the invention (thus, the situation must be analyzed on a case-by-case basis).

This « exploitation bonus » is not systematically provided for in collective agreements, but even in the absence of a collective agreement, some decisions still award it.

Method: Alignment with the civil service regime?

It should also be noted that some judges have sought to align the additional remuneration with the regime applicable to state employees under Article R611-14-1 CPI (Regional Court of Paris, 3rd Chamber, 1st Section, 10 November 2008).

This method was explicitly rejected, in another case, by the Court of Appeal of Paris, Division 5, 2nd Chamber, 16 December 2011.

Request for additional documents

In any event, the pre-trial judge may request the employer to produce a significant number of documents (Regional Court of Paris, 3rd Chamber, 4th Section, order of the pre-trial judge, 15 May 2014), potentially under penalty:

  • content of each patent family for each invention;
  • lists of third parties directly or indirectly holding a right in an invention or a patent derived from the invention (assignment, license, contribution, pledge, bank guarantee, etc.);
  • copy of each contract (e.g., sale, license, supply, and contribution agreements), relating to any product directly or indirectly covered (e.g., by supply of means) by any of the claims of a patent;
  • details of all payments received in connection with a patent;
  • documents relating to the valuation of each invention, in particular all documents quantifying its economic value, including:
    • sales volume,
    • gross margin,
    • net margin,
    • production savings,
    • and their commercial interest.

Brief focus on the applicable law

From the outset, we have been discussing the articles of the Intellectual Property Code governing the right to the title (L611-7 CPI).

But are they actually applicable?

This is a complex issue governed by private international law.

In Europe, Regulation (EC) No 559/2008 or Rome I (which is based on the Rome Convention) provides, in Article 8, that the employment contract shall be governed:

  • by the law chosen by the parties (subject to more favorable provisions of the other options);
  • by the law of the country with which the employment contract is most closely connected;
  • by the law of the country in which the work is habitually carried out;
  • failing that, by the law of the country where the establishment that hired the employee is situated.

It is up to you to determine the applicable law…