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Patents - Law on Employees' Inventions - Russia

In Russia the regulation on employee inventions is provided in the Civil Code of the Russian Federation ("the Civil Code"). The Civil Code establishes a general regulatory framework for employee inventions and certain contractual relations involving them.

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-When does the law on employees' inventions apply?

Inventions, utility models or industrial designs ("inventions") are recognized by the Civil Code as employee inventions in two cases:

  • if they are created in connection with employees performing their employment duties,
  • or in connection with employees completing a certain assignment of the employer.

-Who becomes owner of employee inventions?

As a general rule, the right of authorship to the invention in this case belongs to the employee (the author). The exclusive right to the invention (the right to use it) and the right to obtain a patent belong to the employer, unless otherwise stated in an employment or other commercial contract. Inventions created, not in connection with performing employment duties or completing an employer's assignment, but using the employer's technical, financial or material resources are not recognized as employees' inventions. In such cases the exclusive right and the right to obtain a patent to the invention belong to the employee.


-Is the employee obliged to notify the employer of an invention?

Unless otherwise stated in an agreement between employer and employee, the employee is obliged to notify the employer in written form about the creation [in connection with performing his employment duties or completing an employer assignment] of any IP sensitive work.

The Civil Code does not provide a specific term for when the notification has to be made. In such cases general provisions of contractual law are applied which require the notification to be made within a reasonable term.



-Which duties do employers have in relation to employee inventions?

After receiving an employee's notification, the employer, within the period of four months, may use one of the following options: 

  • File a patent application;
  • Assign the right to obtain a patent to a third party; or
  • Inform the employee about its decision to keep the invention secret. 

In case the employer fails to use one of these options within the mentioned term, the right to obtain the patent reverts to the employee. In this situation the employer is still entitled to use the invention during the life of the patent under a non-exclusive license with payment of compensation to the employee. The sum of the compensation and the terms of its payment are to be determined in the agreement between employer and employee. Any dispute about the compensation is to be resolved by negotiation and, if without success – by Russian courts of general jurisdiction.

If an invention is created, not in connection with performing employment duties or completing an employer's assignment, but using the employer's technical, financial or material resources, the employer may at its discretion either ask for:

a) Non-exclusive license to use the invention for its own purposes during the life of the patent or;

b) Reimbursement of expenses incurred in connection with the creation of such invention.    

 


-Is the employee inventor entitled to additional remuneration?

If the employer either: a) obtains the patent; b) assigns the right to obtain the patent to a third party; c) decides to keep the information about the invention secret or d) fails to obtain the patent due to its own fault, the employee has the right to remuneration. This right may not be assigned to third parties but in the event of the author’s death, passes to his/her heirs for the rest of the patent’s life.

Russian legislation explicitly names the employer as the person obliged to pay the remuneration, even if the employee is no longer employed or the rights to the invention (the right to obtain a patent and to use the invention) are assigned or licensed to a third party. However, this obligation may be transferred to third parties in the course of corporate restructuring of a company.



-How is the remuneration calculated?

Russian legislation sets out as a general rule that the sum, conditions and procedure of any remuneration payment may be agreed by the employer and employee. In the case of a dispute arising, these issues are usually to be resolved by Russian courts of general jurisdiction.

In the absence of an agreement, the provisions of the Decree of the Government of the Russian Federation of 4 June 2014 No. 512 apply. The Decree enters into legal force on October 1, 2014.

The Decree states that the remuneration is to be paid both for creation and usage of the invention and stipulates the following:  

  • For creation of an invention: 30 percent of the average salary of the employee (author of the invention) for the last 12 calendar months;
  • For creation of a utility model or industrial design: 20 percent of the average salary of the employee for the last 12 calendar months.  Under the Decree the salary is calculated as of the filing date of the patent application, the date of assigning the right to obtain a patent to third party or the date of deciding to keep the invention secret (depending on which option the employer chose); 
  • For use of the invention/utility model/industrial design: the average salary of the employee for the last 12 calendar months during which such invention/utility model/industrial design has been used. 

The first two points above also apply to several types of R&D agreements, contracts for creation of industrial designs and some other agreements.

The Decree also regulates payments to the employee in the case of the employer assigning or licensing the employee's work. 


-Are contractual agreements possible?

The creation of inventions, utility models and industrial designs may also be contemplated in R&D agreements, as well as in contracts for creation of industrial designs.

(a) R&D agreements and contracts for creation of industrial designs

In the case of the agreement being explicitly aimed at the creation of an invention, the right to obtain the patent and the exclusive right belong to the customer. The contractor may use the invention under a non-exclusive license for its own purposes during the life of the patent. The same rules may apply vice versa unless the agreement states otherwise.

If the agreement does not explicitly provide for the creation of an invention, the right to obtain the patent and the exclusive right belongs to the contractor. In this case the customer may use the invention during the life of the patent for the purposes at which the contract aims with no additional remuneration to the contractor. This right remains even if the contractor assigns the right to obtain the patent or the patent itself to a third party. Again, these rules may apply vice versa unless stated otherwise in the agreement.

(b) Contracts for works/services for state/municipal needs

The Civil Code stipulates special regulation of contracts for conducting works/provision of services for state and municipal needs. A party to such contracts is a state or municipal customer acting on behalf of the Russian Federation, its subjects or municipal entities (public entities).

The general rule for such contracts is the following: the right to obtain a patent and the exclusive right belong to the contractor. The state (municipal) customer may in this case ask for a free non-exclusive license to use the invention exclusively for state (municipal) purposes.

It may be provided in a contract that the rights belong solely to a public entity.  In such cases the contractor must ensure, via concluding agreements with its employees and any third parties, that all the necessary rights to the inventions are duly assigned to the public entity. The contractor has the right to compensate expenses incurred in connection with such assignment.

Exclusive rights to an employee's invention may be jointly owned by the contractor and public entity (public-private partnerships). In this scenario the public entity may issue non-exclusive licenses to use the inventions for state (municipal) purposes with prior notification of the contractor.



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