Member Article

Intellectual Property and Employees

With Watson Burton LLP Law Firm

When an invention or creative work is created by an employee during the course of their employment, the general rule is that the intellectual property in that invention will belong to the employer, unless there has been agreement to the contrary. Where work is created outside the normal course of employment, the intellectual property will not automatically vest in the employer. The question of whether a work was created during the course of employment is a common matter of dispute between employers and employees.

In the recent case of LIFFE Administration and Management v Pinkava & Others [2007] EWCA Civ 217, the employee, Dr. Pinkava was asked to create a credit derivative future to be traded on an electronic exchange. Instead, Dr. Pinkava created a much more complicated system which allowed the trading on the exchange of certain types of swaps. Dr. Pinkava left LIFFE and applied to patent the system in the USA, but LIFFE argued that as employer, the intellectual property in the system belonged to them. The court asked itself first, was the invention made in the course of the employee’s normal duties and, secondly, would an invention be reasonably expected to result from the carrying out of those duties?

On the first question, the court found that although the relevant duties were not set out in Dr. Pinkava’s contract, his duties had evolved over time such that the relevant duties had become normal. On the second question, the judges found that an invention could reasonably have been expected to result from his duties, though the three judges disagreed on the correct approach. The dissenting judge thought that the particular qualities of the individual employee should not be relevant, i.e. that it was not right to say that if the employee was intelligent and inventive, it was more likely that an invention could reasonably be expected to result from his duties. He thought that it was quite unfair that a brilliant employee would be expected to hand over his inventions, while an unimaginative employee would be entitled to keep his because no-one expected him to create a new invention. The majority, however, found that the expectation of an invention had to arise from the carrying out of a person’s duties by that person himself, not by “some notional employee of reasonable or average ability”, and therefore, the qualities of the particular employee were relevant.

If you have any comments or questions about this article or any other intellectual property related matter, please contact claire.waller@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .