Transfer of employee inventions and works to the employer

Right to a patent

Pursuant to the industrial property law, an employer is entitled to a patent for an invention made by an employee, but only if the invention was a result of the employee’s duties under the employment relationship.

As a consequence, the employer is not entitled to such a right if the employee created the invention while working outside the scope of the duties assigned to him.

Payment for an invention

If the employer benefits from the invention used in the company, the employee is entitled to an additional remuneration. The amount of such remuneration should be determined in a fair proportion to the benefit obtained by the company from the invention, taking into account the costs and assistance of the employer in creating this invention.

Right to a work

For the employer to acquire a work created by an employee, the employer must expressly transfer such a work. As a rule, for the work created by the employee in connection with the performance of duties under the employment relationship, the employee is not entitled to additional remuneration (unless the parties agree otherwise).

Computer program

The issue of acquiring the employer's rights to a computer program has been regulated separately. These rights arise immediately for the benefit of the employer without the employer having to transfer such a program.

Tax effects of the transfer of intellectual property rights under the employment relationship

Tax deductible costs

A flat-rate income tax costs of 50% may be deducted from the revenues obtained from the transfer of industrial property rights, granting of a license, the use of copyrights and related rights by authors or the disposal of such rights. The right to deduct costs is also available to employees who receive such income on the basis of employment. The amount may not exceed PLN 85,528 in a calendar year for the total costs of all the above. 

Initial acquisition of intellectual property rights

Under the law, some intellectual property rights are available to the employer from the moment they are created (e.g. copyright to a computer program). However, the mechanism may be different due to an agreement between the employer and employee. If this is not the case, any payment to the employee for the creation of such a right will not be deemed 50 % income tax deductible.

Transfer of industrial property rights

The application of 50% of the costs to the remuneration for the transfer of industrial property rights or to the license fee requires cumulative fulfillment of the following conditions:

• the work performed leads to the creation of an industrial property right;
• the employee is a creator within the meaning of the provisions on industrial property law;
• the employee receives income for the transfer of the rights to the industrial property or a license fee for the right to use it.

The basis for calculating the amount of costs is the creator's income received for the transfer of the rights to an industrial property or a license fee for the employer. The basic amount is not reduced by the contributions for compulsory social insurance. The amount of the creator's income from the subject of the costs should be clearly defined.

Copyright transfer

From 2018, the right to use 50% of the costs depends on the type of activity performed by the author receiving the copyright remuneration. Lump sum costs can only be determined from the remuneration listed in Art. 22 sec. 9b of the PIT Act and only if the following conditions are jointly met:

• the employee performs work consisting in creating works subject to protection under the copyright law;
• the employee is the author of the works;
• the employee's remuneration has been separated from the remuneration for the use or disposal of copyright;
• the employer keeps documentation confirming the acquisition of copyrights from employees, e.g. a detailed list of works to which he acquired such rights.

The list of works may, however, turn out to be insufficient, as there are cases where employers are called upon to present the works themselves, and not their list. The inability to present the works may even lead to the conclusion that the employer did not have grounds to apply 50% deductible.

In the case of income from the disposal of copyrights or the exercise of these rights by an employee, 50% of the costs are calculated after deducting from the income the social security contributions in a given month, the basis of which is this income.

More in articles by Iza Gawryjołek and Tomasz Kret entitled "Employee inventions and works will be transferred to the company" and "How to settle the transfer of intellectual property” for Rzeczpospolita.