Who Owns IP in Companies?

Intellectual Property (IP) has become an important part of companies. Patent protection is a “friend” for technology companies that innovate; Copyright has also become crucial for companies, especially ones that produce designs and content. Or the most fundamental example: the brand of a company must also be protected because it consists of all Intellectual Property that is protected.

The Brand is clearly owned by the company, but what about Copyrights and Patents? Do creators hold Copyright and Patents? Or does the company?

Copyright

In Article 1 paragraph 1 of Law number 28 of 2014 on Copyright is an exclusive right of the author vested automatically on the basis of declaratory principle after Works are embodied in a tangible form without reducing by virtue of restrictions in accordance with the provisions of laws and regulations.

What is an Author, a work, and Copyright Owner?

  1. An author is a person or persons who individually or jointly produce works that is unique and personal.
  2. Works is any copyrighted work in the fields of science, art, and literature that is produced based on inspiration, ability, thought, imagination, dexterity, skill, or expertise that is expressed in a tangible form.
  3. Copyright Owner means an Author as the Copyright owner, the party acquiring a lawful right from the Author, or other parties who acquire subsequent rights from the party such acquiring lawful rights

Who holds copyrights in companies?

As stipulated in article 1 paragraph 4 of the Copyright Law, Copyright Owner means an Author as the Copyright owner, the party acquiring a lawful right from the Author, or other parties who acquire subsequent rights from the party such acquiring lawful rights. Thus we can conclude that the author or recipient of the right is the copyright holder.

Usually,  companies would insert copyright related causes in work contracts, in order to avoid potential disputes regarding copyright ownership. However, in Article 36 of the Copyright Law it is stipulated that “Unless agreed otherwise, the Author and the Copyright Holder to Works produced under an employment relation or based on commission are the party producing the Works.”

Thus we can conclude if there is no written agreement regarding the ownership of the work, then an employee that is the creator of the work remains as the holder of the Copyright.

However, it’s also stipulated in Article 34, that in the event that Works are designed by a person and embodied and executed by other Persons under the direction and supervision of the Person who designs, the one will be regarded as the Author is the Person designing the Works. So, say, if the head of a company has an idea, then orders his employees to realize the idea, then the company heads receives the Copyright for the work.

The point is that the copyright owner is the creator of the work, but if the idea comes from a company, then the copyright owner of the work is the company. However, usually there is a written agreement contained in the employment contract at the company regarding the transfer of Copyright, but don’t worry, because even though the Copyright is already owned by the company, the creator may ask for royalties from his creation.

Patent

In article 1 paragraph 1 of Law Number 13 of 2016 on Patents it is stipulated that a Patent is an exclusive right granted to the inventors by the State as the result of his/her invention in the field of technology for a definite period of time to exclusively implement his/her given invention or to give consent to other party.

In Article 1 paragraph 3 of the Patent Law, an Inventor is defined as the person or persons collectively executing an idea in an activity to produce an Invention.

Are patents exclusive to inventors?

Article 1 paragraph 6 of Patent Law defines  a Patent Holder as the Inventor as the owner of Patent, recipient of such right from the owner of Patent or a subsequent recipient of Patent from the person mentioned above who is registered in the general register of Patents

Who holds patents in companies?

According to Article 12 of Patent Law:

  1. Patent Holder of the Invention produced by the Inventor in a work relation is the Party who has commissioned the work, unless agreed otherwise.
  2. The provision as referred to in section (1) is also applicable to the Invention produced by an employee or worker using data and/or facilities available in his/her work.
  3.  The Inventor as referred to in section (1) and section (2) is entitled to Remuneration in accordance with the concluded agreement between employer and Inventor, by taking into account the economic benefit generated from the Invention.
  4. The Remuneration as referred to in section (3) may be paid on the basis of:
    1. a certain amount and a lump sum;
    2. a percentage;
    3. a combination of certain amount and lump sum together with gift or bonus; or
    4. any other forms agreed by the parties.
  5. In the event that no agreement can be reached on how to calculate and decide the amount of Remuneration, relevant parties may file a lawsuit to the Commercial Court.
  6. The provisions as referred to in section (1), section (2), and section (3) do not deprive the right of Inventor to have his/her name mentioned in the certificate of Patent

Thus, it can be concluded that the holder of a patent is an inventor, but usually companies would usually insert clauses in contract stipulating that all inventions would become the property of the company. However, Inventors need not worry, because the Inventor’s Rights are also protected in the Patent Law which stipulates that the Inventor has the right compensation according to the agreement and their name must still included in the Patent certificate.

If Partners have questions regarding this article, or other questions regarding Intellectual Property, or want to register their Intellectual Property, please do not hesitate to contact us at marketing@ambadar.co.id, we are waiting.

Sources:

  • Law number 28 of 2014 on Copyright
  • Law number 13 of 2016 on Patents
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