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Industrial property rights of enterprises, employees - old issues but never old

To survive and grow in the business environment with increasing and fierce competition. Each enterprise or individual is required to have its own new and prominent positions to adapt to unique market circumstances, seek new business opportunities, promote the development of the companies and themselves. And one of the essential prefixes for enhancing the effect of unfair anti-competition as well as protect the legitimate interests of enterprises and individuals is the issue of industrial property rights. 

As defined in Clause 4, Article 4 of the Intellectual Property Law 2005 amended and supplemented in 2009 (hereinafter referred to as “the Intellectual Property Law”): “Industrial property rights mean rights of organizations and individuals to inventions, industrial designs, layout designs of semiconductor integrated circuits, trademarks, trade names, geographical indications, trade secrets they have created or own, and the right to repression of unfair competition.” Industrial property rights are valuable assets of every enterprise or individual because industrial property rights help enterprises and individuals to establish the rights to its subjects specified above created or own by them. In essence and fact, the relationship between enterprises and employees that are related to the establishment and assignment of industrial property rights is vital. It adjusts and controls the rights of the parties in situations arising throughout the business, trade, and cooperation process. Because of the enterprise itself and the employee act as the subject of involvement and directly impacted by industrial property rights.

Under the current labor law, the nature of the labor contract between the enterprise and the employee is that the employees will provide their labor-power to the enterprise, and this enterprise will pay corresponding to the labor-power that the employees worked out. Employees can fully be hired by the enterprise to create objects of industrial property rights. So, the issue of registration of industrial property rights protection, the parties need to determine who is the owner? Who is the author of this industrial property rights? However, not all objects of industrial property rights have the same author and owner. For trademarks, trade names, or trade secrets, geographical indications only establish rights for owners without authors; as for geographical indications, the sole owner is the State, and only those organizations and individuals who are authorized by the State to manage geographical indications are entitled to establish rights to such geographical indications. 

At Clause 1, Article 121 combined with Clause 1, Article 122 of the Intellectual Property Law: “The owner of an invention, industrial design, or layout design means an organization or individual who is granted a protection title for the respective industrial property object by the competent body”, “The author of an invention, industrial design, or layout design means the person who has personally created such industrial property object”, as can be seen, in the objects of industrial property rights only to inventions, industrial designs, and layout designs, the author and the owner identified. Businesses and employees, when there exists a relationship related to these products, it is necessary to raise the issue of allocating rights to who is the owner, who is the author, to ensure the rights and benefits of the parties. Also, Article 86 of the Intellectual Property Law clearly defines that an author is the creator of an invention, an industrial design, layout design with their labor, and expense. The owner is "an organization or individual that invests funding and material facilities for the author in the form of work assignment or employment unless otherwise agreed by the parties." The role of the subjects for such industrial property rights must be clearly defined because the authors and owners will have different rights limits:

1. Accordingly, the author will enjoy moral rights and economic rights correspondingly. In particular, moral rights include (i) To be named as authors in invention patents, utility solution patents, industrial design patents or certificates of registered design of semi-conducting closed circuits; (ii) To be acknowledged as authors in documents in which inventions, industrial designs or layout designs are published or introduced.

Economic rights of authors of inventions, industrial designs, and layout designs are the rights to receive remuneration for products themselves created as stipulated in Article 135 of the Intellectual Property Law.

2. The owners of industrial property objects (in general) have exclusive rights to economic rights: (i) To use or authorize others to use industrial property objects according to the provision; (ii) To prevent others from using industrial property objects; (iii) To dispose of industrial property objects. The enterprises may directly use, exploit, or authorize other organizations and individuals to use, misuse, transfer the rights of use or assign ownership of industrial property objects under their ownership.

So, if employees create their inventions, industrial designs, layout designs that meet the conditions for protection by their efforts, it is outside the labor relations and the creative process do not use mediums, tools from the enterprise, but all expenses are borne by themselves. Therefore, the employee will be recognized as the author and the owner of that intellectual property in its possession when they register for a title. Employees will be entitled to the rights of the author and the economic rights of the owners mentioned above.

When the product is made by the employee from their efforts, but based on performing duties, the work assigned by the enterprise (under the nature of the labor relations), and the enterprise expenses investment, providing the necessary equipment and facilities for employees to produce products. The enterprise will have the right to register for a protection title, be established as the owner of that industrial property right, and have rights to the economic rights of the owner. Employees enjoy the moral rights and economic rights of an author.

However, although the current legal corridor on intellectual property has basically been strengthened and regularly reviewed, amended, supplemented, completed; in reality, many situations occur outside that foresee by law. For example, if an employee creates an invention that is not in the process of a labor relationship, it does not belong to the assigned or hired task of the enterprise. Still, they use utilities and tools from the enterprise to research that invention. So, will the owner in this situation be the enterprise or the employee? Regulations of intellectual property law still open to the issue, confusing for businesses and employees when establishing their positions and authority over these intellectual properties. So the definition of the author, the owner of an object of industrial property rights, is always a big knot and never-ending for businesses and employees. The solution to avoid arising disputes about this issue is base on the intention, agreement of enterprises and employees when the labor contract is signed that is related to intellectual property problems. The parties should proactively set up terms of determining the scope of their rights and obligations concerning industrial property rights in specific cases.

Intellectual property is a type of intangible property, which is accessible to appropriate, so the State always encourages enterprises and individuals to register for protection of intellectual property created or owned by them to ensure legitimate rights. Therefore, whether industrial property rights are registered or not, the enterprises or employees still must respect and do not infringe on industrial property rights of others. Help reduce the occurrence of unnecessary disputes, create a healthy competitive environment, and develop sustainably.
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