Employee-driven innovation during home office times

Employee-driven innovation during home office times

02 June 2020 - Małgorzata Furmańska
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Everyone who could switch their employees to work remotely due to infection prevention during the coronavirus pandemic did so. In addition to dealing with the issues of availability of databases, equipment, and the necessary formalities, it is also important to remember to protect the intellectual property rights in the results of home office employees’ work. Until now remote work has not been that common. Nowadays it is a necessity, but it can be perceived as an opportunity to develop new solutions and introduce improvements.

What is employee-driven innovation?

The concept of employee-driven innovation can be understood in many ways. Essentially, the idea is that employees can submit their ideas for both innovative product solutions and process improvements, from relatively simple business improvements to inventions or even ideas for changing the company’s business profile to meet the current market needs.

Some companies have employee innovation programs at different stages of development, which are a channel of communication of employees’ ideas while allowing them to reward those with the greatest implementation potential. The most advanced ones take the form of e.g. platforms for collecting ideas (so-called open box), internal accelerators, innovation laboratories (e.g. series of workshops, after which employees with the best ideas are delegated to work on their projects for a longer time).

Requirements for the acquisition of rights by the employer

Until now, employee innovation has been used to build a competitive advantage. Now it can guarantee the continuity of the company and smooth operation and optimization of internal processes. Therefore, it is important to secure properly the most valuable solutions, which can be protected, among others, by obtaining copyrights or industrial property rights. However, obtaining an exclusive right (e.g. a patent) can be applied solely by the entity that is using that right (e.g. the right to a patent). To exploit the solution and benefit from it, one should also have a legal title (e.g. property right, license).

The right to obtain a patent for an invention or protection for a utility model, as well as the right from registration for an industrial design is vested in the inventor. However, in case of creation of an invention, utility model or industrial design as a result of the inventor’s performance of duties resulting from the employment relationship or other contract, this right is vested in the employer or the ordering party (the so-called employee invention), unless the parties agreed otherwise. Similarly, if an employee creates a work as a result of the performance of duties resulting from the employment relationship (the so-called employment contract-based work), their employer acquires, upon acceptance of the work, the author’s economic rights within the limits resulting from the purpose of the employment contract and the consistent intention of the parties, unless the employment contract provides otherwise. However, according to Article 2 of the Polish Labour Code, an employee is a person employed on the basis of an employment contract, appointment, selection, nomination, or cooperative contract of employment. The employment contract itself should be in writing (art. 29 § 2 of the Labour Code), however, the form of defining the employee’s obligations is not important (in practice non-preserving of the written form causes disputes which are difficult to resolve). This also applies to the “employee” – a contractor providing services under a civil law contract.

Not every creative activity of an employee will be subject to rights acquired by law by the employer. It is necessary to demonstrate a functional link consisting of recognizing that the result of an employee’s creative activity is the result of the employee’s performance of his or her duties. The performance of the employee’s duties is carried out at the employer’s expense, within its organizational structure, using its technical and human resources. However, the use of knowledge, experience, and skills acquired in connection with the performance of employee duties does not mean that the employee’s project is a result of the performance of duties from the employment relationship.

Carrying out an invention does not have to be an employee obligation as such – it does not have to be explicitly stated in the contract. It is sufficient for the contract to result in the obligation of specific creative activity (e.g. the type of work, the work plan, the official order issued). The mere fact of making an invention by an employee during working hours, but without any relation to his duties (as a result of the excess of free time or as a result of striving for the best possible results at work) does not create a right for his employer. Similarly, the place of work as a place of obtaining a creative effect does not determine the transfer of rights to that effect to the employer.

Creative work should be creative, not just limited to providing assistance. It is also not enough to merely carry out instructions or to pass on expertise previously known to experts in a given field. An inventor shall neither be a person who has not worked directly on an invention but has only developed the scientific and technical basis on which the solution was based. A co-inventor can be defined as the person who co-decided on the final shape and outcome of the work.

The criteria indicated under copyright law will not be fully valid under industrial property law. Copyright is formal and covers only the manner of expression (it does not protect ideas), while inventive creation is more innovative. Therefore, under industrial property law, a person who is the source of an idea for an innovation (a technical concept, not only an inspiration to make an invention) can be considered an inventor. The indication of the direction of action alone is not sufficient. Similarly, an inventor is not an ordering party, or assisting to make a solution, providing materials necessary for implementation or making insignificant corrections. According to the Supreme Court’s position, a person who only provided assistance in making an invention but did not participate in the concept of creating a new solution is not its inventor (see: Supreme Court judgment of 21.3.1974, I PR 53/74, OSPiKA 1976, No 10, item 195). However, in practice, an entrepreneur may unconsciously assist in the creative work of a subordinate using his equipment and premises, performing activities not related to employee duties. The employer will not then acquire the rights to dissolution under the Act, however, the right to use such “employee innovation” within the scope of the entrepreneur’s activity will remain in dispute (in the background of Article 11(5) of the Polish Industrial Property Law).

The above does not apply to inventions made by an employee before the beginning or after the end of his employment relationship. In a situation where an employee started working on an invention before the employment relationship was established and completed it with time, it will be important to determine when the invention has acquired features that allow e.g. to apply for protection at the patent office. Sometimes, for security reasons, it is better to consider an option of subsequent acquisition of a right to exclude doubts.

Moreover, the principle of the acquisition of rights by the employer is not binding and the parties may regulate this issue differently by contract. In such a case, it is the employee-inventor who acquires the intellectual property rights. The parties cannot agree that a third party is entitled. Also, a contract that simply provides for the transfer to the employer of the rights to all the effects of a subordinate’s work, as these must be related to the employee’s scope of duties, will be invalid.

Impact of remote working

Since the entry into force of the provisions of the so-called coronavirus special law, “an employer may instruct an employee to perform, for a fixed time, the work specified in the employment contract, outside the place of its permanent performance (remote work)”. Nevertheless, until now the employer could also instruct the employee to perform the work specified in the employment contract outside the place of its permanent performance.

In the light of Article 108 of the Labour Code, it is still required for the employee to “comply with the established organization and order in the work process”, as well as “the way of confirming arrival and presence at work and justifying absence at work”. When commissioning remote work, the employer should hand over the equipment to the employees, although it has happened before that the BYOD (Bring Your Device) policy was applied in the companies or the employees could use the company’s tools outside the office, especially if the company had to adapt suddenly to the situation. The employer should pay an equivalent for using private equipment for work. Employees often use, even on home equipment, company databases, CRM systems, electronic communication means, etc.

The employer may issue an order for temporary work outside the office through a company’s e-mail, in which the rules for remote working will be specified. The employee retains the full right to remuneration for remote working time. Thus, it must be concluded that despite a change in the place and manner in which the work is performed, as a rule, the majority of employees still take action at the employer’s expense, within his organizational structure, using his technical facilities and human resources.

The main issue remains the finding of a functional link between the result of the employee’s creative activity and the performance of his or her duties. Certainly, the subject of many employee activities has not changed either. However, especially in the situation of sudden adjustment and its scale and changes taking place in the processes of functioning of the economy, it has become necessary to create new ad hoc solutions, which go beyond the established scope of employee duties. In the situation of a protracted state of epidemics and upcoming threats, it will become necessary to adopt an innovative approach to conducting business activity and, first of all, to offer new solutions that meet market needs. As a result, the subject matter of the work performed by individual employees may be subject to significant changes, exceeding the position held and the established tasks. Then controversies may arise concerning the automatic acquisition of rights to innovative employee solutions.

In companies with various types of employee innovation programs, despite exceptional circumstances, it is necessary to ensure maximum compliance with established procedures and regulations for innovation. This will allow for a proper evaluation of a given solution and at the same time, it will increase legal security (e.g. verification of the necessity to transfer rights through a separate agreement).

Other entrepreneurs should carefully look at the innovative solutions proposed by employees and contractors, in particular those with considerable potential for implementation, to properly acquire the rights to these solutions and be able to protect them effectively. It should be remembered that while under copyright law it is primarily required to establish a work, ensuring effective protection through the acquisition of industrial property rights entails statutory limitations, such as, for example, the premise of the novelty of an invention or industrial design. Therefore, disclosing a solution before its protection may have serious and long-term negative consequences.

Of course, another issue is the habits of employees, who have to suddenly or much more intensively use the digital collaboration model or use home tools (and sometimes use within the company’s network technological solutions not approved by administrators). Apart from the fact that this may be of great importance for securing the company’s secrecy, much information and documents concerning the process of creating solutions and works may also remain beyond the employer’s access. These materials are often important in the process of implementing innovative solutions, in the procedure for obtaining exclusive rights, not to mention disputes with business partners or employees.

To sum up, a coordinated approach to employee-driven innovation, especially nowadays, can be crucial for the development or maintenance of a company.

After the epidemic, the home office may become a permanent feature of Polish companies

Nowadays, remote working has become a necessity, but the flexible form of employment was previously positively evaluated and accepted by employees, and more and more companies offered such a possibility to provide work. The research of the HR website Pracuj.pl shows that as much as 82% of employees approve of it. Usually, the possibility of remote work is presented as an employee benefit indicating the flexibility of the employer and the possibility of combining professional and private life in the so-called work-life balance. In the long-term perspective, entrepreneurs inclined by circumstances to adjust the conditions of remote working, after modification of internal procedures and equipment and adaptation of digital technologies, may more often use the solutions developed by the team. In this process of change, such an important aspect of the functioning of the organization as employee innovation should not be overlooked.

The content of the article is intended to provide general information related to a given topic. In specific cases, you should seek specialist advice which takes into account individual circumstances.

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