PATENTS IN UNIVERSITIES AND PUBLIC RESEARCH INSTITUTES: Article 65 of the Italian Industrial Property Code
In this context, the lack of promotion of the developed technologies gradually gave rise to an economic disadvantage for these institutions. And, even more dramatically, nowadays such attitude constitutes an obstacle for the growth and development of the whole country.
In 2001, the Italian government launched a special regulation aiming at promoting the protection of the inventions conceived inside both public and private universities and public research institutes, in order to support the transformation of these inventions into real projects, thus fostering an economic boost.
Today, the protection of inventions realized by scholars from universities and public research institutes is regulated by the Article 65 of the Italian Industrial Property Code (CPI), stating that the scholar is the only owner of the rights resulting from the inventions he/she created, except for the right of universities and public research institutes to receive a percentage of the revenues coming from the economic exploitation of the patent.
This regulation has been amended only a few times since its first introduction. However, in the last two decades, several attempts have been made to change its content.
Law n. 383 of October 18th 2001, with article 7, included article 24-bis in the so-called “Legge Invenzioni” (Royal Decree on June 29th 1939, n. 1127), which stated that the scholar was the only owner of those rights resulting from the inventions he/she created. This regulation was an exception to the law protecting employees’ inventions, where the employer was the owner of all rights.
This provision issued in 2001 raised many concerns since it deprived institutes of patents ownership rights. Moreover, from a constitutional perspective, it produced inequalities between employees of universities and public research institutes and those of other types of companies.
During the preparatory works for D.lgs February 10th 2005, n. 30, that is to say the Italian Industrial Property Code (CPI), it was clear that the expected results were not achieved in terms of filing of patent applications by scholars. Therefore, it was suggested to give back to universities and public research institutes patent application rights ownership.
A further goal of 2005 reform was to foster the creation of appropriate structures for technological transfer, inside universities and public research institutes.
Notwithstanding the positive opinions on all sides, such as from Confindustria, the above mentioned amendments were not introduced, because the role of the Italian Government to draft the Industrial Property Code (legge delega al Governo, capo II art. 15) only entailed a rearrangement of the provisions applicable at that time, without radically changing them. Therefore, the proposed wording for the new article 65 could have risked to be considered unconstitutional (because the Chambers granted too much power to the Government in performing a legislative function).
Therefore, article 25 was kept with the same wording as article 24-bis and the only change was adding provision n. 5. This new provision, for those inventions conceived within researches funded, wholly or partially, by private subjects or public entities other then the research institutions which the scholar belongs to, inferred that the regulation of employees was to be applied.
In 2010, on the occasion of the new reform of the CPI, this time the Government was empowered (Legge 23/07/2009 n. 99, art 19) to change the wording of article 65 so that the rights ownership was returned to universities and public research institutes.
The new text of article 65 was thus made, following this empowerment. However, for reasons still unknown today, the wording of article 65 remained unchanged in D. lgs. 13/08/2010 n 131.
The current article 65 in a nutshell
According to the current article 65:
- the scholar is the only owner of the rights resulting from the inventions he/she created. In particular, if there is more than one inventor, those rights belong to all of them equally, unless otherwise agreed.
Moreover, under the current rules, the scholar has to confirm the filing of the application to the institute he/she belongs to (article 65 (1) CPI);
- the university or the public research institute is entitled to receive from 30% to 50% of the revenues or exploitation fees resulting from the invention, as well as to decide such percentage (article 65 (2, 3) CPI);
- the university or the public research institute has the chance to obtain by default a non-exclusive free license to exploit the invention, in case the inventor hasn’t exploited it economically for at least 5 years, unless he/she didn’t do so as a result of circumstances beyond his/her will (article 65 (4) CPI); and
- the previous provisions do not apply to researches funded, wholly or partially, by private subjects or public entities other then the university or research institutes which the scholar belongs to (article 65 (5) CPI). Therefore, in this case, the article seems to refer back to article 64 CPI, which regulates employed inventor rights.
Article 65 interpretation
Article 65 raised many doubts about its interpretation and applicability, to the point where universities and public research institutes felt the need to draft internal regulations to solve the uncertainties of the law text.
In particular, it is not clear which professional figures are included in the “scholar” category. In fact, many university or public research institutes regulations state that the term “scholar” does not include employees with contracts similar to those of subordinate work, such as PhD students or students with grants, nor simple students.
Moreover, the applicability of the rules is not clear when it comes to set the shares due to each entitled subject, in the specific case of inventions conceived by more than one inventor coming from either universities, public research institutes or private entities (when the private subject is not funding the project directly). However, these aspects are usually determined by specific contracts.
In addition, this law leaves a regulatory vacuum in the case of an employed researcher deciding not to file a patent application for his/her invention, while preferring instead to have the scientific results published.
Another aspect this law doesn’t deal with is about the failure to comply with the communication obligations and the related timings. In fact, there are no sanctions for this kind of non-compliance. In this case, even though on one hand regulations of the major Italian universities often establish these communication timings, on the other hand they do not impose any sanction for their non-compliance.
Furthermore, it is not clear whether universities or public research institutes have any chance to claim against an inventor, in case he/she has given up his/her patent rights under unfavorable economic conditions.
Other critics are about the right of universities or public research institutes to acquire by default a non-exclusive free license after the failure to exploit the invention for at least five years. In some industries, such as electronics, this provision could risk to be applied only to inventions already lacking an actual economic interest. Moreover, the Italian Industrial Property Code itself states that whoever is interested can request a costly compulsory license, after just three years after the failure to use the invention (article 70 CPI).
It is still to be clarified how to interpret the role of the university or public research institute’s employee in the case of projects funded, wholly or partially, by private subjects or public entities other then the research institutes which the scholar belongs to. In fact, employees’ rights, regulated by article 64 CPI, can include a reward for the inventor, according to the type of contract. However, under the current law, it is not clear whether a reward should be given to researchers working for funded projects, nor who should possibly give such reward. It is considered that these aspects should be basically defined during the contractual process.
In the end, article 65 does not have special provisions for other types of protection, such as industrial designs, new plant varieties or semiconductor topographies. However, some university regulations have filled this legal vacuum, equalizing this items to inventions.
In conclusion, after the introduction of the above mentioned provisions, many universities and public research institutes have set dedicated offices within their structure aiming at promoting the technological transfer. In addition, these institutes defined their internal regulations in order to supplement the current law.
Therefore, the time to give back inventions rights ownership to universities and public research institutes, and thus to be consistent with the current provisions of the other European countries, may finally have come.