Employee Inventions

termination of employment 2Earlier this month, three decisions were published by the tribunal for establishing compensation for employee inventions. The tribunal consists of a judge, the Commissioner and an academic.

The legal basis for the tribunal providing compensation is Section 134 of the Israel Patent Law which states:

In the absence of an agreement that determines whether the inventor is entitled to compensation and what the compensation should be, appropriate compensation will be determined by the Committee for Compensation established under Section VI.

The three decisions follow a Supreme Court Appeal of a decision of this nature  Supreme Court 4353/14 Barzani vs. Isscar Ltd, from 8 July 2015 which makes clear that the committee’s powers are non-cognitive and the parties can come to alternative contractual arrangements. The rulings provide a good indication of how the committee sees its responsibilities, but are censored of details that could reveal the employee or the company but some general guidelines can still be drawn:

  1. If there is an agreement in place, including one for token compensation or for no compensation at all, the committee has no standing.
  2. Registering the application in the name of the company and the inventor filing assignments of the corresponding patent abroad, including for a nominal sum such as one US dollar, is not considered as an agreement and does not disqualify the inventor from receiving compensation from the committee.
  3. Clauses in the employment contract or an NDA signed by the employee whilst a consultant before starting to work on a salary basis, that state that any invention by the employee will be the property of the company do not mean that the committee has no standing and the employee will not be entitled to compensation ruled by the committee.
  4. A termination agreement signed by the employee in which he states that he does not have and will not have any claims against the company is considered a waiver of compensation.
    Unlike labour law where the labour court assumes powers to delete or amend clauses in a contract that contravene standard labour law, the compensation to inventors is dispositive and can be waived. Furthermore, the committee does not have the power to amend agreements. Once it determines that there is an agreement in place, whatever its terms, the committee no longer has any standing.
  5. Union negotiated general contracts are considered binding on the employee.
  6. Efficiency proposals and valuable discoveries are probably not service inventions

The three rulings may be found here, here  and here.

 

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