Ownership of employee inventions - regulation in Sweden, the United Kingdom and the United States

Abstract: This essay presents the reader with an insight to how Sweden, the UK and the US deal with matters concerning inventions created by employees. It provides information on how employee inventions are categorized, which type of employee inventions belong to the employer, what right the employer has in these types of inventions, what or if he is obliged to compensate the employee and how contracts between employers and employees are handled. How the different countries regulate these matters are described, analyzed and compared. The first country the essay depicts is Sweden. Rules concerning the right to employee inventions are collected in LATU (lag om rätten till arbetstagares uppfinningar). Most of the provisions in LATU are non-mandatory but it is not possible for and employer to contract away from the employee inventor's right to be compensated The employee inventions are divided into three categories. The employer has different rights in the employee invention depending on how/and if the invention is connected to the operations of the employer. Establishing if an invention falls within the ''operations of the employer'' can prove especially difficult if the employee is employed in a concern. After the explanation of the system in Sweden the reader is provided with a description of how the UK handles matters regarding the ownership of employee inventions and this system has many similarities to the one in Sweden. In the UK, the employer can take over employee inventions in two situations. The employer has this right when an invention is created in the course of the employee's duties and was reasonably expected to result, and also when the inventor because of his position in the company owes a special obligation to the company which employs him. The rules governing employee inventions are stated in the Patents Act 1977. The Patents Act provides the employee with a right to be compensated by the employer. Certain requirements have to be fulfilled if the employee should have a right to be compensated. The employee has to be employed either in the UK or by an employer who has a place of business in the UK and the invention for which compensation is to be paid has to have been granted a patent. After the description of the legislation in the UK, focus is turned to the system in the United States which in many ways is different from those in Sweden and the UK. The employee inventors may be obligated to assign their patents to their employers because of an obligation arising from an implied agreement created when the employee was hired to invent, or from the so-called ''fiduciary duty'' which employees in high-ranking positions owe to their employer. Who initially receives the title to a patent is stipulated in federal common law. Employment status is determined by state law. The rights to employee inventions are generally governed by two types of rules: default rules or employee-employer contracts. Because of the uncertainties involved with applying the common law rules, most employer in the US use express contracts to allocate patent rights. The employers are free to contract around the common law rules but there are eight states which have passed legislations that limit the possibilities to make these types of contracts. The aim of the state statutes is so prevent employees from taking advantage of their unequal bargaining power. As in Sweden, employee inventions are in the US divided into three categories: 1) Specific inventions, 2) General inventions and 3) Independent inventions, and the employers have different right according to which category the invention fall under. All these facts are more deeply described below. After explaining these three systems, the essay will be concluded in a chapter where the systems are analyzed and compared.