If you are concerned with the issue of employee inventor compensation, as mentioned in my article, let me congratulate you, because you are having a happy problem – you do not have to be concerned if you are not making a huge profit from your invention.
Comparing to other jurisdictions, China is very generous to the inventors, reflected by the legal requirements on compensation after the patent is commercially exploited within the term of the patent as below:
- for invention patent or utility model, not less than 2% of the profit;
- for design patent, not less than 0.2% of the profit; and
- not less than 10% of the license fee.
The good news is, compensation is to be calculated based on contribution of the invention to the profit (much like assessing patent infringement compensation), and the number of inventors
As the readers could imagine, many enterprises are not happy with the above, and tried to get around with the following attempts, which all failed:
- Count salary and bonuses as award and compensation
- Contracting out
- Count compensation paid before patent grant
- Have award and compensation scheme signed and agreed by the inventor, while the schem deviates substantially from the Law
My article has details on how and why the above attempts failed, with reference to relevant Chinese court decisions.
My article also discusses potential scheme that may make everyone happier, while fulfilling the requirements in China. I will be grateful for thoughts on these, and further education on the situations in other jurisdictions.
It is my honour to have my article on this published by the October 202 issue of UK CIPA Journal, which is available at the link below:
http://www.teehowe.com/download/CIPA202110employeecompensation.pdf
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
