The Fair Premium And The Alleged Nullity Of The Industrial Property Right – Judgement 1031/2009

On 23.11.2012 the Court of Turin issued an important judgement on the correct attribution of the fair premium in the field of patents, according to Art. 64 of the Industrial Property Code.

According to the Art. 64.2 IPC, the fair premium is provided for the subject who carries out an invention in the fulfillment of a contract or employment relationship, if its employment relationship does not provide for a fee for inventive activity. In this case, the patent rights belong to the employer but the inventor is entitled to a fair premium after the grant of the patent.

In the case examined by the Court, the request by the plaintiff for a fair premium referred to several patents, some granted, others being granted.

In the course of the proceeding, the plaintiff’s contractual framework did not provide for fees for inventive activity, therefore the defendant company tried to resist the request on the basis of two different arguments.

The first argument was relative to the ten-year limitation of the claim if the application is filed after ten years from the date of grant of the patent (Cass., 2011 n.23809 and Cass., 1989 n.30).

The second argument concerned the forfeiture of the right to receive a fair premium in the case of a patent being null and void.

In the first respect, the Judge considered that a generic request sent by registered mail does not have an interruptive value of the limitation if such a request does not allow the other party to correctly fulfill its obligation to pay the fair premium. From the previous registered letters sent by the plaintiff, the defendant had no way of assessing the correct amount to be paid without any indication on the patents involved. Therefore, the right to request a fair premium was considered statute barred for those patents granted for more than ten years and which had not been precisely indicated in the letters.

As regards the second point, the defendant tried to avoid the payment of the due amount by pleading the invalidity of the patent rights on the basis of a decision for which:

“The employer is entitled to plead, even in order to avoid paying the fair premium, the nullity of the worker’s patent”.

However, the Court did not agree with this position by referring to two subsequent judgments (Cass. 2000 n.7484 and Cass. 2006 n.586309) and adding its further judgement.

According to these decisions, the employer’s obligation to pay the fair premium fails only with the judicial declaration of nullity which declares the patent null and void from the outset (ex tunc), since a declaration of nullity pronounced in a merely incidental way is not sufficient.

In the present case, this declaration was non-existent at all.

Furthermore, the Collegiate Court has pointed out that, on one side it is true that the invalidity proceedings against a patent can be filed by anyone who has an interest in it but at the same time, the real interest belongs to people working in the field, and not to the owner, as they could be hindered in their commercial activity by such a right.

Therefore, even if the same patent’s holder is theoretically entitled to request a nullity of its own patent, in this case this right was not exercised for a real interest but as an “expedient” to avoid paying the fair premium due, thus determining a “process abuse”.

The nullity proceeding was exercised for a different purpose with respect to the purpose for which the proceeding had been instituted.

The Collegiate Court also noted that, actually, the patent’s owner has in any case enjoyed for many years this patent right which was widely exploited commercially without competition problems because of an injunctive effect which generates a patent right in relation to third parties.

In this sense, the Court concluded that the plaintiff had actually the right to its fair premium even before an alleged nullity of the patents invoked by the defendant and therefore also including the two European patent applications which had not been granted yet between the rights for which the employee deserved a fee.

Only the patents with statute barred lawsuit were considered excluded from the right to fair premium.

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