Employee Invention Law

In general, the Law on Employee Inventions (ArbEG) applies to inventions made by employees. It represents the simplest and preferred possibility to transfer inventions made by employees to the employer in a legally effective manner so that they can be exploited within the company. The ArbEG is intended to create a balance between the interests of the company with regard to access to inventions made by employees, which are usually based to a considerable extent on the fundamentals provided by the company, and the interests of the employee in the recognition and, if applicable, additional remuneration of above-average work performance.

By the way, the ArbEG is not directly applicable to the managing directors of a GmbH. If a managing director makes an invention or is involved in it, a contractual agreement is required for the transfer to the company. Frequently, however, corresponding regulations are already included in the employment contracts of the managing directors. There, for example, the corresponding application of the ArbEG can be contractually agreed upon.

In principle, employed inventors have the obligation to report inventions to the employer immediately after their completion, and to do so in such a complete manner that an assessment of the protectability and exploitation prospects within the company is possible.

In practice, it has proven itself that all employees in general, but especially those working in the development area, are made aware of this obligation to report in an appropriate form. Although the employer has no special information obligations with regard to the legal regulations of the reporting obligation, it is advisable to include a corresponding reference in the employment contract and/or to repeatedly instruct the employees, for example in the context of QM audits.

As soon as an employee has reported an invention, this sets in motion a non-extendable period of four months for the employer to declare the release of the invention if he or she does not want to transfer the invention to the company. If the release is not declared in text form in due time, the invention is automatically considered to be claimed. Of course, the claim can still be explicitly declared, which certainly serves the purpose of clarity. The start of the deadline can be delayed if necessary because the invention disclosure is not complete in terms of content. However, such a deficiency must be pointed out within a shortened period of two months so that the employee has the opportunity to complete the notification.

If the employer releases a reported invention, the employee can freely dispose of the invention, so that, for example, a sale of the invention to competitors is conceivable.

Prior to October 01, 2009, a written declaration of claim against the inventor was required for the transfer of the rights to an invention to which the inventor was originally entitled.

The claiming of a service invention automatically triggers the obligation for the employer to prepare and file a national property right application without delay. This can only be deviated from in special cases, for example if the interest in secrecy prevails, in which case the protectability of the invention is assumed even without a patent office examination procedure.

In principle, there is no obligation to file foreign patent applications. However, the employer must release the rights to the invention to the employee in due time if and to the extent that the property right is abandoned prematurely or, for example, no subsequent applications are to be made abroad. The employee should thereby be given the opportunity to continue the property right at his own expense if necessary.

The second main effect of a claim is that the employee inventor is entitled to compensation. The amount of this compensation is initially still zero, since the actual amount of compensation is determined exclusively by the economic advantage which the company can derive from the invention made. However, at the latest when an actual use of the invention is commenced or a patent is granted, there is a need to enter into a binding remuneration agreement. The amount of compensation is calculated according to certain criteria, which include the value of the invention on the one hand and aspects of the invention and the position of the inventor on the other.

In addition to the principle of calculating the remuneration in relation to the current actual economic advantage, it is also permissible to agree with the employee on a flat-rate remuneration arrangement for the respective invention. This may have the advantage that the administrative effort for an annual calculation of remuneration is not required.

As a rule, disputes about the amount of compensation arise when an employee leaves the company and no compensation regulation has become binding by then.