The problem of different compensation of inventors in multi-jurisdictional inventorship
When an invention is invented, it’s highly unusual for just one inventor to do all the work. Instead, the main inventor often requires a lot of assistants to help him/her with all the minor stuff. In addition, for some cases, when the invention is on the world level, the assistants might be from multi-jurisdictional but normally, the employees from those multi-jurisdictional companies will get a different compensation or reward for their efforts and create a problem of unfair compensation.
As the world becomes more and more open and easily connected, the cooperation between big, multinational companies has become more regular.
Not just contracts for providing necessary parts, technology or services but nowadays, the cooperation to create an invention is becoming more and more popular, as top scientists and researchers from multi companies and countries work together.
However, when the invention is completed, normally, most of these researchers won’t be named in the inventor list because that invention will be registered by one or some of the companies who paid for all the research resources.
Instead, they will get compensation or some other agreements in their respective contracts.
To normal cases in one country or one jurisdiction, that will be the end of the matter. But because the collaboration is from multi jurisdictions, the compensation level will be different according to the regulations of each company and each country that that company is established.
For example, if 2 companies from the United States and China collaborate, according to the normal trend of compensation for inventions of these countries, the reward that the inventors from the 2 countries will vary considerably.
Principally, the reward or remuneration for inventors is not required in most states in the US. Nevertheless, most companies will have a remuneration clause in their employment agreement.
In China, reward and remuneration are mandatory for service inventions established in the country, not just Chinese patents.
This creates problems of unfair compensation that will likely generate a problem in future cooperation and accordingly, it needs to be resolved right away.
Expert opinions
Dan Altman, Partner, Knobbe Martens explained the consequence of different compensation regulations for inventions in multijurisdiction during Panel Session No. 5 of the 2021 AIPPI World Congress on Oct. 19, 2021: “This could conceivably result in an inventor in a country like China receiving substantial compensation whereas the inventor in the US may receive nothing.”
Altman further added: “Most companies will require some sort of compensation to inventors as either incentive to invent or as something to maintain their morale because inventors who don’t receive anything, who contribute to a very successful invention, maybe resentful. So these agreements of employment need to be thought through very carefully because not only do you need to address the requirements of each jurisdiction or inventions made, but you also need to consider the moral, the fact of the agreement of different compensation and different inventors.”
Mengmeng Yu, patent attorney at AFD China Intellectual Property in Beijing added that agreements or by-laws should provide forms and standards of reward and remuneration in multi-jurisdictional inventorship, especially in China: “Without clear indication, courts tend to not accept arguments that it has been included in salaries, allowance, bonuses, and benefits.”
Accordingly, a record of the issuance of such rewards and remuneration in detail should also be kept if needed if a possible future conflict with the company occurs: “Rewards and remuneration have different coverage in China. A reward is a payment when a patent is granted while remuneration is usually paid in installments when a patent is exploited or licensed. A reasonable agreement can be reached between the employer and the inventor in terms of form and amount.”
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