Rights to Service-Related Works and Inventions in Mongolia

1) Who owns the rights to service-related works and service inventions created by an employee in the course of their employment?

In accordance with the applicable laws and regulations of Mongolian, an employee remains the author of a service-related work and retains the moral rights in that work, while the employer generally holds the exclusive rights to exploit a work created within the employee’s duties, unless otherwise agreed. For an invention or utility model created in the place of employment, the employer is entitled to the patent rights, subject to the statutory notification, filing, and remuneration rules.  Accordingly, authorship or inventorship remains with the individual, although the principal commercial rights may belong to the employer.

2) What criteria determine whether a work or invention qualifies as service-related?

A copyright work qualifies as service-related where its creation and subject matter fall within the employee’s job description or an agreement with the employer. An invention or utility model is employment-related if it is created in performing contractual duties or an employer-assigned task, or through the use of the employer’s technology, equipment, materials, information, experience or other resources. The assessment therefore, depends on the legal and factual connection with employment, rather than only on when or where the result was created. 

3) Which rights automatically vest in the employer and which require a separate assignment?

For service-related work, the employer automatically holds the exclusive exploitation rights. For a workplace invention, the employer is statutorily entitled to the patent right.

Unless the duty to invent and appropriate remuneration are already established in the employment contract, the employer must conclude a separate agreement with the inventor and pay appropriate remuneration to obtain the patent. 

4) Is an employer required to compensate an employee for a service invention or service-related work?

No additional payment is generally required for a copyright work created as part of the employee’s principal duties, unless the parties agree otherwise. However, where the employer uses work created within the broader employment duties but outside the employee’s principal activities, the employee is entitled to a share of the resulting income unless otherwise agreed. For a workplace invention, the employer must conclude a remuneration agreement and make an appropriate payment unless the duty to invent and appropriate remuneration are already covered by the employment contract.

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?

The employment agreement and job description should clearly identify the types of work and inventions expected from the employee and state who will hold the relevant exploitation or patent rights.  It is important to the employer should establish an internal IP policy requiring employees to promptly disclose potentially protectable works and inventions in writing and setting out procedures for determining ownership, preserving evidence of creation and maintaining confidentiality. Separate invention and remuneration agreements should be signed where required, and any subsequent copyright or patent assignment or license should be documented in the form required by law. 

6) How are rights to service-related works and service inventions allocated within multinational corporate groups and in cross-border employment relationships?

Within a corporate group, the relevant rights initially arise in the employing entity under the applicable employment and IP rules and do not automatically pass to a parent company or another affiliate. Therefore, group-wide ownership or use should be implemented through written assignments, licenses or other intercompany arrangements, with patent transfers or licenses recorded or registered where required. In a cross-border arrangement, the parties should also review the governing law of the employment relationship, the country in which the protected right is asserted or registered, and any applicable international treaty before assuming that a single clause is effective in every jurisdiction. 

7) What risks arise if an employment agreement does not contain provisions governing service-related works and service inventions?

The main risk is uncertainty over whether the result falls within the employee’s duties and whether the employer actually acquired the relevant rights. For copyright works, an employee may retain the exclusive exploitation rights where the creation or content is not covered by the job description or agreement. For inventions, inadequate disclosure and remuneration provisions may cause the employer to miss filing period or face a claim for payment or conclusion of an agreement.  This can disrupt filings, investment, licensing and intra-group use, and may expose the employer to infringement or ownership disputes. 

8) Can an employee claim rights to a work or invention created outside working hours using the employer’s resources or while working remotely?

For copyright works, the decisive issue is whether the creation and content fall within the employee’s job description or agreement; creation outside working hours or during remote work does not by itself determine ownership. If the work falls outside that defined scope, the employee may retain the exclusive rights even if employer resources were used, although such use may raise separate contractual or confidentiality issues. However, for the patent rights, the use of the employer’s technology, equipment, materials, information, experience or other resources is independently sufficient for an invention or utility model to qualify as employment-related, regardless of where or when it was created.

9) How can an employer protect its rights when the creator of a service-related work or invention leaves the company?

Termination of employment does not by itself reverse rights that were validly allocated to the employer during employment. Before departure, the employer should obtain any outstanding invention disclosures, execute required assignment and remuneration agreements, preserve creation records, and ensure the return of confidential information and company materials. Exit documents should confirm continuing confidentiality and cooperation obligations without purporting to transfer the employee’s personal status as author or inventor. 

10) How does the use of artificial intelligence (AI) systems affect the legal treatment of service-related works and service inventions created by employees?

Mongolian law does not currently establish a specific ownership regime for works or inventions generated through AI systems. Copyright protection is framed around a work resulting from the creative activity of an individual author, so protection for wholly AI-generated output is uncertain, while a sufficiently creative human selection, arrangement or revision may still qualify.  Likewise, the Patent Law defines an inventor as a person, meaning that AI should not itself be treated as the inventor; the employee must have made the relevant human inventive contribution.  Employers should therefore document human contributions and regulate approved AI tools, confidentiality, third-party terms, disclosure, and ownership in employment contracts and internal policies. 

Authors: Kadbaatar Dashiisuren (Associate), Nandin-Erdene Zorigt (Senior Associate)