Labor and Intellectual Property in Venezuela
Last May, Venezuela implemented a new Labor Law (the 2012 Labor Law or LOTTT) that introduced many changes to the previous 1997 Labor Law. Some of the most controversial provisions in the new 2012 Labor Law concern the regulation of intellectual property produced in the course of an employment relationship. (See the chart below for a comparison of some of the articles discussed in this posting).
Chapter III of the 1997 Law classified inventions produced in the course of an employment relationship in three categories. First, “Service” inventions are inventions produced by workers hired by their employer for purposes of research and for obtaining different systems, media or proceedings. Second, “Enterprise” inventions are inventions where the facilities, procedures or methods of the employing entity are essential for their production. And third, “Free or occasional inventions” are inventions by an inventor who was not hired for that purpose where the inventor’s effort and talent are predominant.”
Chapter V, Title IV of the 2012 Law maintains the categories and definitions for both “service” and “free” inventions or improvements while eliminating the category of “enterprise” inventions. In a strange twist, the 2012 Law incorporates a paragraph that makes the employer’s facilities and resources a necessary (yet irrelevant) factor for both service and free inventions.
Complementing the elimination of “enterprise” inventions, the 2012 Law makes a new and significant distinction between inventions produced in the course of employment in the private and public sectors. On the one hand, the 2012 Law mandates that all inventions (service or free) generated through employment in the public sector or funded with public moneys, are part of the public domain. Inventors in this case retain only the moral rights of recognition and integrity over their works. Inventors from the private sector, on the other hand, are the ultimate owners of their inventions. The employer has the right to exploit the work for the duration of the employment relationship or of a license granted by the inventor. Even in these cases, the inventor will have the right to participate in the revenue produced by the invention. Once the employment relationship ends, the employer 90 days to purchase ownership rights to the invention from the inventor/former employee.
These provisions have many implications. Eduardo Saman, former director of the Venezuelan IP Office SAPI (equivalent to the USPTO), explained that these provisions reflect the idea that no one should own publicly funded research and that research in general should not be motivated by economic profit. In contrast, Venezuelan IP lawyer, Ricardo Enrique Antequera criticizes the new law and explains that “Venezuela is giving its inventions to the world” since any person will be able to use them for free. Researchers from publicly funded universities are uncertain on whether this new law means their work will be part of the public domain and they will be unable to obtain any type of economic benefit. Another lawyer explains that the public/private distinction in ownership of IP violates Article 88 of the Venezuelan Constitution. This article provides for the equality of men and women in exercising their right to work. Another question that arises from this law is whether it encompasses all types of works (artistic, literary, scientific, etc.) or only patentable ones.
Overall, although developing countries have genuine concerns with the effect of IP protections on the access of their general population to knowledge and inventions, Venezuela’s 2012 Labor Law has an excessive focus on the public domain. As it stands, the 2012 Law fails to balance IPR’s two interdependent goals: fostering invention by rewarding inventors and those who fund them, and ensuring public access to the products of such invention. As of now, the controversy over this new law has faded away in the context of the upcoming October elections. The issuing of regulations pursuant to these provisions will likely revive the debate.
|PREVIOUS 1997 LOT, CHAPTER III ON INVENTIONS AND IMPROVEMENTS||NEW 2012 LOTTT, TITLE V, CHAPTER IV ON INVENTIONS, INNOVATIONS AND IMPROVEMENTS|
|Art. 80.Inventions or improvements produced by the employee will be classified as follows:a) Service;
b) Enterprise; and
c) Free or occasional.
|Art. 322.Inventions or improvements produced by the employee in the social process of work will be classified as follows:a) Service;
b) Free or occasional.
In both cases, the facilities, procedures or methods of the employing entity where inventions, innovations or improvements are produced, are necessary for their production.
|Art. 325. Intellectual production generated in a relationship of employment in the public sector, or funded through public funds, will be considered to be part of the public domain. The author will maintain his/her right to the public recognition of his/her work.|
|Art. 84.The employer will have ownership of service or enterprise inventions or improvements. The inventor, however, will have the right to participate in the ownership of the invention when the retribution for his/her work is disproportionate to the magnitude of the result. The amount of such participation will be set by agreement of the parties with the approval of a Work Inspector. If there is no agreement, a judge will decide the amount of the participation.||Art. 326.Authors of service inventions or improvements will maintain their ownership rights over each of their inventions or improvements without limitations and for the duration of those rights. The employer is authorized to exploit the work only while the work relationship exists or for the duration of a license granted by the inventor. The inventor(s), however, will have a right to participate in the ownership of the invention when the retribution for his/her work is disproportionate to the magnitude of the result. The amount of such participation will be set by agreement of the parties with the approval of a Work Inspector. If there is no agreement, a judge will decide the amount of the participation.
When the employment relationship ends, the employer will have a preferential right to obtain the invention within a period of 90 days after the worker notifies the employer through a Work Inspector or a Labor Judge.