To thrive in these unprecedented economic and digital times, organizations need to embrace
creativity and innovation. Through innovation an organization can achieve competitive advantage
which creates room for growth and sustainability. An organization’s innovative climate is driven
by its human resource. Employees breathe life into innovation through their knowledge, skills and
abilities; while employers are the driving force, they provide the employees with the required
environment and resources to innovate.
In Kenya, the main hindrance towards the development of new inventions is the lack of awareness
of laws and legal rights of the employees and employers related to ownership of intellectual
property of the invention. Due to this gap, innovators are exploited, this demotivates them from
actualising their creative potential, for fear that the organization or employer will take all the
credit.
In a recent South African case of Vodacom (Pty) Ltd v Makate and Another (401/2022) [2024]
ZASCA the Supreme Court ordered Vodacom to compensate Mr. Makate in billions for the ‘please
call me’ idea he invented when he was an employee at Vodacom, although the idea was wholly
operationalised by Vodacom.
Such lawsuits against employers and organizations can be prevented by implementing the rights
granted to each party under the law. This Article will discuss how the law creates a balance
between the rights of the employer and the innovator employee to ensure both benefit from the
innovation.
Innovations are governed by the Industrial Property Act, 2001 (IPA). The general rule under
s.30 of the IPA is that the right of ownership belongs to the inventor, however under s.32, there
is an exception to the general rule. The law stipulates that unless there are contractual provisions
to the contrary, the intellectual property to an invention made in execution of an employment
contract or a commission belongs to the employer or the person having commissioned the work.
This rule applies when the employment contract does not require the employee to engage in
inventive activity, but when the employee makes an invention using data or means available to
him through his employment. The law further provides that the employee has a right to equitable
remuneration taking into account the salary, importance of the invention and benefit to the
employer that is derived from the invention; in the absence of an agreement between the parties,
the remuneration shall be fixed by the Tribunal.
Another scenario envisaged under the law is that when an invention is made outside the scope of
the employment contract without the use of the employer;s resources, data, means, materials,
installations or equipment, the ownership rights of such an invention shall solely belong to the
employee.
In short, when an invention is created in the course of employment, with the employer’s
resources, unless there is a contract stipulating otherwise , the intellectual property rights belong
to the employer, albeit the employer should give the employee an equitable remuneration. If the
invention is made beyond the scope of employment and without the resources of the employer,
the intellectual property rights belong to the employee.
The IPA under Part XIV also discusses technovations, which are defined as:
“Solutions to specific problems in the field of technology, proposed by an employee for an enterprise
in Kenya for use by the enterprise, and which relates to the activities of the enterprise, but which has
not yet been used or actively considered for use by the enterprise.”
Under this part, the law states that an employee is entitled to a technovation certificate. However,
if the employee’s contractual duties require the employee to make technovations, that employee
is not entitled to a technovation certificate unless the degree of creative contribution is beyond
what is required by the employee’s duties.
To get a technovation certificate, the employee has to request for one in writing and the
enterprise shall issue a receipt to indicate a request has been made. The enterprise shall within 3
months issue a technovation certificate, or a refusal to the request with reasons of the same.
When a technovation certificate is issued, the enterprise shall inform the employee their
intention to use the technovation. Upon being issued with the certificate, the technovator
employee shall not communicate his technovation to anyone other than the enterprise and shall
not use it unless the enterprise does not intend to use it or if it intended to use it it has not started
using it within six months from the issuance of the certificate. Where the enterprise uses the
technovation or communicates it to a third party, the technovator shall be entitled to
remuneration that shall either be governed by a collective bargaining agreement, or in the
absence, mutually agreed by the enterprise and the technovator.
The law clearly gives both parties a benefit. The employer gets the benefit of ownership,
commercialisation and use of the invention, while the employee is remunerated for his effort.
Employers should remunerate their employees. Remuneration acts as an incentive; it gives
employees recognition and awards them for their time, effort and hard work, thus motivating
them and encouraging them to invent.
The ideal way to tackle this issue is through:
1.Having an intellectual property policy that clearly stipulates that ownership of any
inventions created within the organization shall belong to the organization and that
employees will be rewarded, either a certain percentage of the revenue derived from the
use of the invention, or an amount mutually agreed upon.
2.Having a clause in employee contracts that any inventions created by the employee shall
belong to the employer and that the employee will be rewarded either a certain
percentage of the revenue derived from the use of the inventions, or an amount mutually
agreed upon.
3.Have a separate agreement with the employee that has details on the amount agreed
upon.
These documents will ensure that the rights of each party are well secured.
Dated: 1st March 2024
By: Suhaila S. K. Noorani