Does Invention-Creation after Demission belong to Service Invention?

As intellectual property plays a more and more important role in competition, disputes over ownership of patent increase. Among which, the disputes triggered by application of patent by former technologists are usually too complicated to be settled.

Service Invention (‘SI’) refers to a job-related invention-creation made by any person in execution of the tasks of the entity to which he belongs or by primarily using the material resources of the entity. (Patent Law, Article 6). Currently, SI is mainly defined according to the Detailed Rules for the Implementation of the Patent Law, Article 11, 12. According to Article 12, ‘a job-related invention-creation made by any person in execution of the tasks of the entity to which he belongs’, includes hereinafter three situations: 1. Invention-creations made in execution of his duties; 2. Invention-creations made in execution of tasks beyond his duties; 3. Invention-creations made within one year from his resignation, retirement or change of work, and relates to his own duty or the other tasks entrusted to him by the entity to which he previously belonged. And ‘primarily using the material resources of the entity’ refers to the entity’s money, equipment, spare parts, raw materials, or technical data which are not to be disclosed to the public.

Whether SI includes the invention-creation after demission? There are three points at issue in practice. Firstly, how to define ‘within one year’? Secondly, how to define the relevancy of ‘relating to his own duty or the other task entrusted to him by the entity to which he previously belonged’? Thirdly, what are the criteria of ‘primarily using the material resources of the entity’? We’ll analyze them respectively below.

I. About the standard of ‘within one year’. Firstly, how to define the time point of ‘made’? Because it’s difficult to define the accomplishment of invention-creation, relevant judgments often count back from the date of application for patent to define whether it’s been made within one year after demission. Secondly, whether ‘one year’ is a constant period? Actually, it has exceptions. In a judgment of Shanghai First Intermediate People’s Court, it confirms the invention-creations made by person rehired by the original entity within 1 year as SI. The reasons are as follows: the article (§ 3 of paragraph 3, Article 11 of the Detailed Rules for the Implementation of the Patent Law), shall be interpreted according to the whole context and the legislative intent”. According to the former two items, ‘invention-creations made in execution of his duties’ focuses on duties. But once the inventor leaves his post, will the duty remains; can he continue to make technological innovations in original field? It’s hard to say. To solve these problems and balance interests of all parties, Item 3 poses a limit on time, which is one-year. To invention-creations made within one year, it considers more of its factual continuity from the original task, and attributes the right of application to the entity. To those over one year, it focuses more on encouraging the enthusiasm of creation, and attributes the right to the inventor. However, here is an essential premise, which is the inventor has practically left the original post, no matter it’s due to resignation, retirement or change of work. In the case above, although the inventor had retired in 2000, he didn’t quit his job. Instead, he was rehired to the original post immediately, and the retirement doesn’t separate him from the original post. So, the one-year limit shall not be applied to him. The rule embodied in this case is worth attention, and can be used flexibly in individual cases.

II. About the relevancy of ‘relating to his own duty or the other task entrusted to him by the entity to which he previously belonged’. In practice, judges often need to decide whether the inventor’s own duty or other tasks include involved patent inventions, whether technical proposals are the same, or closely related research. If the original entity fails to prove the scope of staff’s official duty, or his acceptance of such research task, the invention won’t be defined as SI. One tendency of judgment in practice is as below: if the worker undertakes R&D task in his own duty or other tasks entrusted to him before demission, though the project hasn’t been finished when he leaves, he learns the progress and periodical results, then the invention-creation he makes within a certain period after demission usually has close relation with the said task, and it’s more reasonable to attribute it to the original entity. So in litigation, the original entity has to be acknowledged that it can’t claim a creation-invention as SI just because the creation-invention is close to the field of technology and business area of itself. Instead, it should raise the claim according to the scope of staff’s official duty or his implementation of such research task.

III. About the criteria for the definition of ‘primarily using the material resources of the entity’. In practice, the entity has to prove three key points: 1. the ‘material resources of the entity’ includes entity’s money, equipment, spare parts, raw materials, or technical data which are not to be known to the public. In short, it shall include tangible substance and intangible technology secret. 2. ‘Primarily using’. According to the Interpretation of the Supreme People’s Court concerning Some Issues on Application of Law for the Trial of Cases on Disputes over Technology Contracts, Article 3, which stipulates that ‘primarily using the material and technical means of the legal entity or another organization’, it includes situation where the employee utilizes all or most of the entity’s money, equipment, spare parts, raw materials, or technical data in R&D of technological achievements (in Article 1 of the Interpretation, it refers to patent or application for a patent), besides, these material resources shall substantially influence the technological achievements. It also includes situation where the substantial content of technological achievements is accomplished based on unpublicized technology or periodical results of the legal entity or other organizations. Hereinafter are some exceptions: 1. The inventor creates the invention mainly with the materials and technical resources of the legal entity or other organizations, but promises to return the capital or pay using fees; 2. after the accomplishment of the technological achievements, use the materials and technical resources of the legal entity or other organizations to verify and testify the technical proposal.

To sum up, in the individual case, the party should use the rules and tendency hereinabove legitimately and flexibly, and formulate appropriate litigation strategy according to its own status and situation.

Note：[1] Analysis based on a typical case on the criteria on the identification of Service Invention, http://www.chinaiprlaw.cn/, Xi Sun