The Finnish world of intellectual property rights is governed by a few rules of thumb. Firstly, the rights to intellectual property typically belong to the individual who created it. Secondly, such rights do not automatically transfer to an employer or any other company. And finally, despite the fact that the rights do not transfer automatically, the holder of the exclusive right can, if they want, transfer the right to another, either partially or completely.
Naturally, the list is not exhaustive and these rules are supplemented by a host of exceptions. However, due to their wide-spread effects, these basics should be familiar to everyone working with innovation, regardless of their title or educational background. Even so, as the due diligence processes in transactions reveal time after time, the reality is very different.
From legislation to invention policy
Finland, like the other Nordic countries, has a specific act on employee inventions. It sets out how and when an employer is entitled to claim the rights to an employee-made, patentable invention.
Despite the relative straightforwardness of the wording of the act, it conceals a variety of minute details that can have wide-spread practical effects. For example, the act states that in order for the provisions of the act to apply, an invention must be “patentable”. In order to fulfil this requirement, the employer does not actually have to patent the relevant invention; it is typically enough that the employer begins to use an invention that could be patented. Therefore, the employer cannot, for example, avoid its obligation to pay a reasonable compensation for the employee who created the invention by merely taking the invention into use, but purposefully leaving it unpatented.
Once you have worked your way around the scope of the act, the setup is this: the original rights to the invention belong to the innovator-employee. However, subject to certain conditions, the employer is entitled to claim the rights to the invention, either partially or completely. Procedurally, it can be said that employees have the statutory obligation to report their inventions to the employer and the statutory right to receive reasonable compensation if the employer uses its right to claim the invention.
Although the act sets out provisions on the preconditions, procedures, extent and terms under which the employer can assume the rights to an invention created by its employee, many of these provisions are non-mandatory by nature. As a result, many aspects related to employee inventions can be agreed on in a way, which supplements the legislation or even deviates from it. It is especially these non-mandatory aspects that create the opportunity – and the need – for companies to organise their employee invention processes so that they support the company’s business operations in the best way possible.
As a result, each organisation’s internal instructions on employee invention procedures form the backbone of a carefully executed innovation process. These procedures and measures are usually compiled into an employee invention policy (“invention policy”). Such an invention policy is meant to, among others, highlight the significance and importance of employee inventions, and create efficient and transparent procedures, which ensure that not only do employees report their inventions to the employer without hesitation, but also receive appropriate compensation for them.
