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Blog | Who gets the patent when you invent something together? | EP&C

2022-10 EP&C Basis_2_Samen_een_uitvinding_Kolom_356x301A great deal of collaboration takes place within the high-tech sector. For example with universities, IT specialists and research institutes. After all, especially in a rapidly changing sector like high-tech, you do not always have all the specific knowledge you need in-house. But what happens if such a collaboration leads to an invention? Who is going to be entitled to the patent in that case?

What does patent law say about this?

In the Netherlands we have the Patents Act [Rijksoctrooiwet], which provides a great deal of clarity in such cases. Within that law we have the inventor and the applicant. The inventor is the person who invents something and the applicant is the holder who submits the patent application.

If your employee invents something then in many cases your company will be the applicant and thus you will be entitled to the patent. But if an employee of one of the suppliers you work with, such as a software expert or a university, invents something then that employee or that company or university may be entitled to the patent. This when all the while you wanted to own the patent yourself. How do you prevent this? Lay down in an agreement in advance who is entitled to what in the event of a patent application. If you fail to do so, the inventor or his employer will be entitled to the patent.

Smart collaboration agreements

If you are active in the high-tech sector there is a good chance that you will be working on an innovation together with a university or research institute. Technology is complex and often requires several different specialists. In such cases legislation stipulates that the research institute or university is entitled to the patent if one of the specialists you hired invents something. This does not necessarily need to be the case as long as you lay this down in an agreement beforehand. You can also opt to apply for a patent together.

However you will need to bear in mind that the process from filing to obtaining a patent can easily take three to six years. So make agreements that are tenable for a longer period. What happens if one of the parties is taken over, what if one of them is declared bankrupt or it is impossible to work things out together?

Patents add value

A logical choice when making the arrangements is: "who pays, decides". So if you are the one hiring the experts, it is only logical to agree that you will apply for the patent and obtain the rights. After all, a patent on an innovation adds value. You will have exclusive rights and will be able to earn back your money with your invention. A patent also makes your company more attractive to investors.

However, that value is only there once the rights are in your name. So if, as a company, you want to reap the benefits from an innovation through a patent, you will need to make very clear agreements. Think of it as a negotiation in which terms and conditions are mutually laid down and recorded in an agreement.

Joint patent application

A joint patent application is an option, but one that is not quite so popular. And for good reason. In the beginning things usually go well. However problems have a tendency to arise when decisions have to be made. For example about the countries in which you want to pursue the patent application or how long you want to maintain the patent.

One party may see potential in the high-tech sector in the United States, while the other has no interest in pursuing this at all and does not want to pay for it. You can then agree in advance that the party that is the only one who wants protection in a particular country will pay the costs and will then also have the rights in that country.

Another option would be for the other party to apply for a patent and then grant you a licence to the patent. A licence to use the patented invention could potentially be of value for you. With an exclusive licence you can also stipulate that you are the sole licensee who is allowed to use the invention in a certain territory, for example, for a certain application. You should make proper arrangements in that case too.

Complex negotiations

So always negotiate in advance about who is entitled to the patent and under what conditions. Even if you do not initially expect to invent something at all. An expert you hire may well come up with an innovation along the way that is interesting enough to protect. In this case it is good to already have an agreement in place.

The negotiations about such a contract are complex. So always get good advice from a patent attorney. A specialised lawyer can then put the agreements down in writing for you. That way, you can focus on innovating with peace of mind.