Rights to Service-Related Works and Inventions in Armenia
1) Who owns the rights to service-related works and service inventions created by an employee in the course of their employment?
According to the legislation of the Republic of Armenia, if an employee creates a service invention in the course of performing their employment duties or at the employer's instruction, the invention is considered a service invention. In this case, the employee is the inventor of the service invention, while the economic (proprietary) rights to the service invention and, as a general rule, the right to obtain a patent belong to the employer.
2) What criteria determine whether a work or invention qualifies as service-related?
According to the legislation of the Republic of Armenia, a work or an invention is considered a service work or a service invention if it is created by an employee in the course of performing their employment duties or at the employer's instruction, and its creation is directly related to the employee's job functions or position. In other words, a work or an invention qualifies as a service work or service invention if it is created within the framework of the employment relationship as a result of the employee performing their employment duties or carrying out an assignment given by the employer.
3) Which rights automatically vest in the employer and which require a separate assignment?
Under the legislation of the Republic of Armenia, all exclusive property rights to use a work-for-hire automatically transfer to the employer without additional documentation. This includes the right to sell and modify the object, the right to file an application and obtain a patent in the company’s name, and the right to specify the organization’s name upon publication.
Separate written formalization is required for the terms and amount of the author’s remuneration, which the employer is legally obligated to pay to the employee for creating the work-for-hire, over and above their regular salary.
4) Is an employer required to compensate an employee for a service invention or service-related work?
An employee who is the author of an industrial design cannot claim additional remuneration for their achievements, except in cases where their personal contribution to the service-related industrial design and its importance to the employer are obvious. The amount, terms, and payment procedure of the remuneration for the author of a service-related industrial design shall be determined by a contract concluded between the author and the employer, or, in its absence, through court proceedings.
5) What documents should be put in place to establish and protect an employer’s rights to service-related works and service inventions? What intellectual property provisions should be included in an employment agreement?
To confirm the company’s intellectual property rights, the following is required:
1. A document clearly stating that the creation of works or inventions falls within the employee’s scope of duties.
2. A written assignment for the development of a specific object.
3. A document signed by both the employee and the company representative once the object is completed (this act of transfer confirms that the employee has delivered the result).
4. An agreement on author’s remuneration.
It is recommended to include the following in the employment contract:
1. A clear definition of the job function.
2. The procedure for the transfer of rights.
3. The terms of remuneration.
6) How are rights to service-related works and service inventions allocated within multinational corporate groups and in cross-border employment relationships?
The status of an object as a work-for-hire and the obligations to pay special remuneration are determined by the laws of the country where the employee is physically located and performs their duties, rather than the law of the company's country of registration or the jurisdiction of the employment contract. Property rights cannot transfer to a foreign parent company directly from a remote employee. First, they must be properly formalized and transferred to the local legal entity (a subsidiary or a local branch) with which the employee has an employment contract. Only after that does the local legal entity transfer these rights to the parent structure based on a cross-border corporate agreement.
7) What risks arise if an employment agreement does not contain provisions governing service-related works and service inventions?
Key threats:
1. Risk of losing exclusive rights: the employee may claim that they created the asset on their own initiative rather than as part of their employment duties.
2. Financial claims: the author has a statutory right to separate author’s compensation (royalties) for the creation and use of the employee invention.
3. Difficulties during business sale or audit.
8) Can an employee claim rights to a work or invention created outside working hours using the employer’s resources or while working remotely?
Yes, it can. The use of an employer's resources or a remote work arrangement does not, by itself, make a work "work made for hire" or an employer-owned work. The key legal criterion is whether the work was created pursuant to an employment duty or a specific assignment, or whether that obligation is set out in the employment contract. If there was no official assignment, the rights to a work created outside working hours generally remain with the employee.
9) How can an employer protect its rights when the creator of a service-related work or invention leaves the company?
Employers should clearly define employees' duties to create work-related IP in employment contracts and internal policies, document work assignments and the transfer of results, and promptly secure legal rights to such works and inventions. These records remain the key evidence of the employer's ownership after the employee's departure.
10) How does the use of artificial intelligence (AI) systems affect the legal treatment of service-related works and service inventions created by employees?
The use of AI does not, by itself, change the legal status of employee-created works or inventions. If the output is created by an employee within the scope of their employment duties or under the employer's assignment, the usual rules governing employee-created IP apply, regardless of whether AI tools were used.
Authors: Ani Hakobyan, Meri Artashesyan
