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[Taiwan] The Legal Significance of Employment Relationship in Determining Patent Ownership and Invalidation Eligibility

[ May 27, 2025 ] >Back
To advance high-end technologies, enterprises often rely on the R&D capabilities of technical personnel. The agreements and actual relationship between the parties are crucial in determining patent ownership. 

In practice, disputes over ownership of inventions between enterprises and technical personnel are common. We provide the following decisions that bring insight into how enterprises and inventors can better protect their rights.
•  Civil Judgment No. 91 (2020), Intellectual Property and Commercial Court
•  Civil Appeal Judgment No. 20 (2022), Intellectual Property and Commercial Court
•  Civil Judgment No. 39 (2024), Supreme Court

These cases underscore that the existence of an employment relationship is critical in determining whether an invention constitutes a service invention and whether a party qualifies as an “interested person” eligible to file an invalidation action under the Patent Act.
 
I.    The relevant provisions of the Patent Act:

1. Article 7, Paragraph 1 (first part)
Where an invention, a utility model or a design is made by an employee in the course of performing his/her duties, the right to apply for a patent and the patent right thereof shall be vested in his/her employer and the employer shall pay the employee reasonable remuneration.
 
2. Article 119, Paragraph 1, Subparagraph 3, and Paragraph 2
Where a request for an invalidation action is filed against a utility model claiming the utility model patentee is not the owner of the right to apply for a utility model patent, such action shall only be filed by the interested party.
 
II. Case Background:

Individual A filed a utility model patent application. 
Company B subsequently filed an invalidation action, asserting that A was not the rightful applicant, and initiated a civil action seeking the assignment of the patent and compensation for damages. 

After over four years of litigation, the central issue remained:
“ Did an employment relationship exist between A and Company B? ”
This determination would affect whether Company B qualified as an “interested person” eligible to file the invalidation action.

III.    Court’s Assessment- No Employment Relationship Found:
 
1. No Genuine Intention to Be Bound by the Employment Contract (Substance over form—actual intent of the parties prevails over formal wording)
Although the parties had signed a consultancy agreement (2016–2018), A later assisted Company B in applying for a Ministry of Economic Affairs project, which required the project lead to be a formal employee. Therefore, A was enrolled in labor and health insurance under Company B and signed a so-called employment contract. However, the court held that there was no real intention by either party to be bound by said employment contract.

The timeline of their relationship and the patent filing further demonstrated the lack of genuine employment intent.


 
2. No Employment Relationship Existed Between the Parties
A was not required to clock in, did not need to personally perform labor, could freely choose work location, could engage in other jobs, and was not subject to authority, discipline, or managerial oversight. The employment contract lacked key employment terms such as salary, job title, duties, and working hours—further evidence that the essential elements of an employment contract were absent.
 
IV.    Court’s Conclusion:

The court ruled that no employment relationship existed, and as such, Company B did NOT qualify as an interested person to file the invalidation action. Without such a relationship, Company B could not claim ownership of the invention as a service invention.
 
V.    Practical Implications and Recommendations:
 
The decisions underscore the importance of clearly defining the relationship between enterprises and technical consultants. Whether acting as enterprise or as technical personnel, both parties should have a clear understanding of their rights and obligations.
 
  • For technical personnel (creators): Whether one acts as an external consultant or an internal employee significantly impacts the ownership of R&D outcomes. The terms should be clearly stipulated to avoid future disputes.
     
  • For enterprises: In a typical employment relationship, employees work at designated locations, have set working hours, and their performance is evaluated. If an enterprise expects to obtain rights to inventions developed by technical personnel, it must clearly stipulate such terms. Merely enrolling them in labor and health insurance or signing a so-called employment agreement is not sufficient. In the event of a dispute, it remains necessary to assess whether the parties were in an employment relationship, or whether the technical personnel merely provided technical guidance under a cooperative relationship as an external consultant.

The above reflects the author's personal views and does not represent the position of the firm.
Written by CHEN, YI-SIN (Legal Department)

For further information or legal advice, please feel free to contact us via email (jawhwa@jaw-hwa.com.tw).