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Business Innovation and the Law

Business Innovation and the Law

Perspectives from Intellectual Property, Labour, Competition and Corporate Law

Edited by Marilyn Pittard, Ann L. Monotti and John Duns

Business Innovation and the Law analyses the topical issue of protecting and promoting business research and development. It does so by examining business innovation through the lens of different legal disciplines – intellectual property, labour and employment laws, competition and corporate laws.

Chapter 9: Resolving invention ownership disputes: limitations of the contract of employment

Mark Freedland and Jeremias Prassl

Subjects: law - academic, competition and antitrust law, corporate law and governance, intellectual property law, labour, employment law


The traditional approach under the English contract of employment is to treat inventions and discoveries as fruits of the employee’s labour, thus belonging to the employer as the work-taking counterparty to the contract of employment. The present chapter identifies several key limitations of this approach, beginning with those inherent in the use of the contractual model as the paradigm form of employment relationships: the unclear scope of the contract of employment and its inability to deal with complex employment scenarios are imported into the statutory regimes of the Patents Act 1977 (UK) and the Copyright, Designs and Patents Act 1988 (UK). A further set of limitations arises from the common law operating to control the impact of express terms in the contract of employment, and the side effects of non-derogation provisions in the 1977 Act. Implied terms, especially those of fidelity and confidentiality, are the third limitation to be explored. A brief conclusion then turns to how these limitations might be overcome, not least through a broader reconceptualisation of the employment relationship beyond its current contractual framework. In a volume exploring the ownership of employee inventions and discoveries, a chapter on the contract of employment in English law might at first appear somewhat anachronistic: with the Patents Act 1977 providing a complete regime of ownership dispute resolution and related compensation mechanisms and similar mechanisms in the Copyright, Designs and Patents Act 1988 (CDPA), Parliament has occupied the turf, thus drastically curtailing the role of the common law.

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