diff --git a/src/ng/compile.js b/src/ng/compile.js
index 7d0bb008db21..a6bcc3e754ae 100644
--- a/src/ng/compile.js
+++ b/src/ng/compile.js
@@ -1400,7 +1400,7 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
                 optional = (match[2] == '?'),
                 mode = match[1], // @, =, or &
                 lastValue,
-                parentGet, parentSet;
+                parentGet, parentSet, compare;
 
             isolateScope.$$isolateBindings[scopeName] = mode + attrName;
 
@@ -1423,6 +1423,11 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
                   return;
                 }
                 parentGet = $parse(attrs[attrName]);
+                if (parentGet.literal) {
+                  compare = equals;
+                } else {
+                  compare = function(a,b) { return a === b; };
+                }
                 parentSet = parentGet.assign || function() {
                   // reset the change, or we will throw this exception on every $digest
                   lastValue = isolateScope[scopeName] = parentGet(scope);
@@ -1433,10 +1438,9 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
                 lastValue = isolateScope[scopeName] = parentGet(scope);
                 isolateScope.$watch(function parentValueWatch() {
                   var parentValue = parentGet(scope);
-
-                  if (parentValue !== isolateScope[scopeName]) {
+                  if (!compare(parentValue, isolateScope[scopeName])) {
                     // we are out of sync and need to copy
-                    if (parentValue !== lastValue) {
+                    if (!compare(parentValue, lastValue)) {
                       // parent changed and it has precedence
                       isolateScope[scopeName] = parentValue;
                     } else {
@@ -1445,7 +1449,7 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
                     }
                   }
                   return lastValue = parentValue;
-                });
+                }, null, parentGet.literal);
                 break;
 
               case '&':
diff --git a/test/ng/compileSpec.js b/test/ng/compileSpec.js
index f2fa4ef66863..853290a637ba 100755
--- a/test/ng/compileSpec.js
+++ b/test/ng/compileSpec.js
@@ -2492,6 +2492,62 @@ describe('$compile', function() {
 
         expect(lastRefValueInParent).toBe('new');
       }));
+
+      describe('literal objects', function() {
+        it('should copy parent changes', inject(function() {
+          compile('<div><span my-component reference="{name: name}">');
+
+          $rootScope.name = 'a';
+          $rootScope.$apply();
+          expect(componentScope.reference).toEqual({name: 'a'});
+
+          $rootScope.name = 'b';
+          $rootScope.$apply();
+          expect(componentScope.reference).toEqual({name: 'b'});
+        }));
+
+        it('should not change the component when parent does not change', inject(function() {
+          compile('<div><span my-component reference="{name: name}">');
+
+          $rootScope.name = 'a';
+          $rootScope.$apply();
+          var lastComponentValue = componentScope.reference;
+          $rootScope.$apply();
+          expect(componentScope.reference).toBe(lastComponentValue);
+        }));
+
+        it('should complain when the component changes', inject(function() {
+          compile('<div><span my-component reference="{name: name}">');
+
+          $rootScope.name = 'a';
+          $rootScope.$apply();
+          componentScope.reference = {name: 'b'};
+          expect(function() {
+            $rootScope.$apply();
+          }).toThrowMinErr("$compile", "nonassign", "Expression '{name: name}' used with directive 'myComponent' is non-assignable!");
+
+        }));
+
+        it('should work for primitive literals', inject(function() {
+          test('1', 1);
+          test('null', null);
+          test('undefined', undefined);
+          test("'someString'", 'someString');
+
+
+          function test(literalString, literalValue) {
+            compile('<div><span my-component reference="'+literalString+'">');
+
+            $rootScope.$apply();
+            expect(componentScope.reference).toBe(literalValue);
+            dealoc(element);
+
+          }
+
+        }));
+
+      });
+
     });