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Who owns an invention created by an employee?

August 21, 2017

When an employee conceives of an invention, who owns it? The employer or the employee?

In Canada the general rule is that the employee owns his or her inventions in the absence of an agreement the contrary. Many employers address this through ensuring that employment agreements include a clause expressly transferring rights in any inventions created to the employer. In some cases, even without an express agreement, it may be possible to find that there was an implicit agreement to transfer rights from the employee to the employer. To find an implicit agreement to assign rights, the courts will ask whether the person was expressly employed for the purpose of inventing or innovating.

Among the factors that might be looked at in assessing whether an employee has an implied obligation to assign rights in an invention to his or her employer are:

• Whether the employee was hired for the express purpose of inventing;
• Whether the employee at the time of hiring had previously made inventions;
• Whether the employer had incentive plans encouraging product development;
• Whether the conduct of the employee once the invention was created suggested ownership was held by the employer;
• Whether the invention was the product of the problem the employee was instructed to solve;
• Whether the employee’s invention arose following his or her consultation through normal company channels;
• Whether the employee was dealing with highly confidential information or confidential work; and
• Whether it was a term of the employee’s employment that he or she could not use the ideas that he or she developed to his or her own advantage

One key exception is that the rights to any invention created by a “public servant” (e.g. government employee) are vested in the Crown. There are a few conditions, such as the invention being connected with duties or employment, or using government facilities or equipment. Note also that “public servant” has been broadly interpreted so as to include a Canadian Forces reservist, even where that person has no active duties and is not being paid.

Employees should be careful to review their employment agreements to assess whether they contain clauses relating to transfer or ownership of intellectual property. Employers should be mindful of ensuring that all agreements with employees and independent contractors contain explicit provisions dealing with the ownership of intellectual property.

Information in this article is for information only. It is not, and should not be taken as, legal advice. If you have any questions relating to the information in the above article or any intellectual property related matter, please contact our office and a Rowand LLP professional will be pleased to assist you.