Amicus Briefs Filed in Employee Compensation Hearing Regarding a Service Invention

briefs

There is an ongoing adjudication regarding a service invention. The hearing is taking place behind closed doors, and is between 1. ” _________” – the plaintiff of the case, and 2. “________”, the defendant.

The adjudication concerns appropriate compensation to the inventor, who is legally bound to assign the invention to the employer, but is entitled to compensation to be decided by a committee set up for this purpose. The Committee is chaired by Professor Englard and additionally consists of the commissioner, Assa Kling, and Professor Michael Tlainker.

A censored intermediate ruling has now issued concerning requests by third parties to submit Amicus briefs. The third parties wishing to be friends of the court are the Association of Israeli Industrialists, the ISS Israel Branch, representing corporate counsel, and Israel Association for Advanced Industries (Hi-Tech).

The larger issues that  require clarification according to the amicii curiae are:

  1. Is the entitlement of an employee inventor to compensation a cognitive right or is it dispositive? In other words, can the employee sign a work contract in which he/she gives up on additional compensation from inventions, above and beyond the salary package?
  2. Is someone working in R&D who is essentially hired to invent in a special category?
  3. Is there a statute of limitations? is there a period after which claims for compensation are considered passe?

The three organizations consider that there is a delicate balance that could be upset here, and awarding compensation to inventors could adversely affect Israel industry, foreign investment in Israel by way of R&D centers, joint ventures, contracting research to Israeli universities, and could ultimately affect everyone by lowering tax revenues and triggering a worldwide recession. (I exaggerate, but only slightly).

The first party (presumably the inventor) considers that the three amicus briefs should not be considered. He/she does not consider that the addition of these parties will add anything to the discussion. He/she believes that they will further drag out an already long-drawn process,  and that general philosophical issues and larger ramifications should be left to academia to discuss and the legislative bodies to right laws about. He?she considers that amicus briefs should be considered in rare cases and only f they raise new, wide issues. Finally, the first party considers that the potential friends of the court have waited too long to submit their request and are guilty of inequitable behavior.

The second party (presumably the employer) considers that there are serious general economic ramifications of this case and that the three associations may contribute to the case by adding their perspective.

In a reasoned analysis, the committee has ruled that they can add third parties as complainants or defendants at their discretion or at the request of the parties or such third parties. The committee further sees itself as authorized to request or accept contributions from interested experts. After Barak’s allowing non-profits to file submissions to the Supreme Court, the court considers itself as having the power to allow submission of amicus briefs, but, quoting Barak in Kozli,  should do so only where there is a compelling interest of the public to do so, and where this adds something to the discussion. Care should be taken to avoid adversely affecting the efficiency of the case and to adversely affect one or other of the main parties. Furthermore, since the committee is the only forum to hear the issue of employee inventor compensation, and since its decisions are final, care should be taken in exercising their prerogative to accepting amicus briefs.

The committee notes that generally the courts are fairly liberal about allowing third parties to submit amicus briefs, but notes that the present case is adversarial, which requires a level playing field. The employer generally has more resources and the employee is thus disadvantaged.

In the specific case the committee was not convinced that accepting the amicus briefs would help the case to be decided efficiently, they did not consider that the third parties had any arguments to contribute that the employer has not thought of, and noted that the individual inventor is disadvantaged with less resources than the employer. The committee rejected the request but did note that the two main parties could themselves submit a document or testimony provided by one of the submitters of amicus briefs, if considered to be of particular relevance.

COMMENTS

This is a hot issue. I organized a conference on this topic a few years ago, which attracted record participation. See here. Speakers included Knesset members, a former Accountant General, representatives of the university tech transfer organizations and industry. It is an issue that is frequently raised by both corporate clients and inventors.  Internationally, there has been a recent change in perspective due to the fact that people change jobs more frequently and may work for more than one company.  It is not easy to come up with fair compensation packages for inventors, where a product’s success may be attributable to other company employees involved in marketing, manufacturing or management. There is a further complication when considering consultants and subcontractors. Particularly where a patent may be attributable to a collaboration of one of more employees and one or more subcontractors, possibly consultants working for universities and the like.

We await the main ruling with interest and hope that the censors will allow enough details to provide some context!

 

4 Responses to Amicus Briefs Filed in Employee Compensation Hearing Regarding a Service Invention

  1. Benny Attar says:

    I work in R&D, have paarticipated in development of patented widgets (no invention is the work of a sole employee) and by company contract am entitled only to “due compensation” – i.e, my payslip – when assigning the invention to my employer. A far thornier question is, what if the invention incorporates the results of research carried out at a former employer? That one is too sticky to touch – we wouldn’t let a lawyer near it.

    • Some inventions are the work of a sole employee. Others are the work of several. So what? The issue is whether employers should have full autonomy to decide terms? what should the terms be?

  2. Benny Attar says:

    Not only are the terms defined by the employees contract with the employer (in most cases) , the employer can (according to the contract) claim rights for an independent invention by an employee if the field is related to his job. I don’t find this unreasonable. If I didn’t like the terms, I could have refused the contract and sought employment elsewhere. I do object to managers claiming sole credit for the work of the R&D team – happens all too often.

  3. […] This ruling settles a great deal of uncertainty that has clouded the industry over the past few years. The  Association of Israeli Industrialists, the ISS Israel Branch, representing corporate counsel, and Israel Association for Advanced Industries (Hi-Tech) petitioned to file amicus briefs see here. […]

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