Who has ownership rights for employee inventions?

In the Japanese patent law, there is a provision called Article 35 that is not present in the U.S. patent law. This provision stipulates that, in order for an employer to apply for a patent for an invention created by his or her employee within the scope of the employer’s business, the employer must pay the employee a reasonable compensation separately from his or her salary. This rule was created to protect the rights of Japanese employees, whose positions are extremely vulnerable. American companies also need to be careful about this rule because the employee can later claim that a patent application or right is invalid using this rule.

On the other hand, if the employee individually obtains a patent for an invention which was created within the scope of the employer’s business, the employer may obtain the license-fee and a non-exclusive right to use the patent, and this is true even if the employee applies for a patent on his/her own after s/he leaves the company.

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