Tuesday, April 13, 2010

Employee Inventions - Private Sector Makeover

A proposed piece of legislation was recently filed with the French parliament relating to revamping the current wishy-washy legislation about employee inventor remunerations into something half-decent (in theory at least), hopefully with some teeth, and with the purported aim of stimulating the French economy and turning the nation's patent applicants into a "file first, file fast, ask questions later" IP cowboy. The proposed text can be found here:


The aim of this long sought after legislation (at least from the various inventors' lobbies) is to bring the private sector into line with handling of public sector employee inventions, which have been codified (and operational) for some time now.

After having read the proposal, I find it unlikely that it will sail through parliament unchecked - the employers' (Medef, CGPME, etc) lobbies will no doubt bring their weight to bear on MPs and Senators alike to remove the proposed possibility for employees to come back to their employers at some undefined date in the future and ask in true Oliver Twist style "for more" if they sense that the employer is making too great a profit from the invention to which they contributed. I'm also pretty certain that if, as is proposed, new taxes are set up to deal with these perceived windfalls that are escaping the clutches of the "good ol' French IRS", then the government will cook up something that nobody will be happy with - after all, the French state is up to its eyeballs in debt, and what better way to earn more money for itself than to tax those both giving and receiving, I can see the state treasury laughing all the way to the national bank!!

One thing is certain : the current situation is a complete mess, with the legislation so full of holes you could strain your spaghetti in it and case law apt to swings of mood. It is at least praiseworthy that someone has stood up to the mark to attempt to do something about it, but ultimately the law may have no real teeth as such and it will be a case of yet another piece of rushed positive lawmaking gone horribly wrong.

As examples of a few potholes in the current legislation that IMHO need filling:
  • - applicability (or as the case law now says, "inapplicability") of collective bargaining agreements;
  • - absence of explicit sanctions for not respecting the invention declaration and categorisation procedures; at the moment, the employer can get away with virtual murder of the invention by not sticking to the procedure laid out under law, leaving the inventor to either go to court to obtain a decision, or to file a patent application surreptitiously and then tell his/her employer afterwards - in any event, it generally leads to an uncertain legal position and a fair amount of strife between employer and employee;
  • - HMA (hors mission attribuable) inventors being considered by the Social Security and IRS administrations as having independent inventor status even though they are fully employed with the company that awards itself and files their inventions;
  • - absence of binding (appealable) decisions issued by the National Employee-Inventors Commission;
  • - supplementary remuneration being considered as salary : aside from the taxation issues, French employment regulations currently make it impossible for an employer to pay an inventor "supplementary remuneration" using the only means available to it, i.e. a wage slip, once that person has left the company. An attempt has been made to address this issue in the proposed legislative changes by considering the sums paid as outside the normal scheme of salary payments.

More updates on this topic as things evolve (no doubt slowly given the current political climate).

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