Employee invention law - horak Attorneys at Law, Germany

The German Employee Inventions Act governs service inventions, free inventions and technical improvement proposals. This overview describes the current general regime. Inventions reported before 1 October 2009 remain subject to the transitional rule in section 43(3); special rules may also apply in the public service and at universities.

1. Notification of employee´s invention

Employees must report a service invention to the employer without undue delay, separately and in text form, clearly identifying the communication as an invention report. The report must describe the technical problem, its solution and how the invention arose, with necessary supporting records. It should identify relevant instructions, company experience, contributors and the reporting employee’s own contribution.

2. Immediate Acknowledgment

The employer must acknowledge the date of receipt without undue delay in text form. If the report lacks required substantive details, the employer must specify the necessary additions within two months and assist where required. If the employer does not request the necessary additions within that period, the report is treated as proper under section 5(3).

3. Claim

The employer may claim a service invention by a declaration to the employee. Under section 6(2) of the Employee Inventions Act, the invention is deemed to have been claimed unless the employer releases it in text form within four months after receiving a proper invention report.

4. Effect of claim

a. Transfer of rights and filing obligations

When the employer claims a service invention, its economic rights pass to the employer. Under section 13, a reported service invention must generally be filed for protection in Germany without undue delay; a patent application is required for a patentable invention unless utility model protection is more appropriate under the statutory criteria.

The filing obligation ceases if the invention has become free, the employee consents to non-filing, or the statutory conditions for keeping the invention as a trade secret under section 17 are met. These are exceptions to the filing duty, not conditions requiring a filing.

If, after claiming the invention, the employer fails to file even within a reasonable additional period set by the employee, the employee may file on the employer’s behalf, in the employer’s name and at its expense under section 13(3).

Once a service invention has become free, the employee alone is entitled to apply for protection. If the employer has already filed, the rights arising from the application pass to the employee under section 13(4).

After claiming the invention, the employer may seek protection abroad. For countries in which it does not intend to obtain rights, it must release the invention to the employee and, on request, enable the employee to acquire protection. Release should occur in time to use applicable priority periods.

When releasing the invention for foreign countries, the employer may reserve a non-exclusive right to use it there against reasonable remuneration, subject to section 14(3).

b. Earlier reports and transitional law

The former distinction between limited and unlimited claims must not be presented as the current general regime. For inventions reported before 1 October 2009, section 43(3) preserves the earlier law. The report date and applicable statutory version must therefore be checked before assessing older cases.

5. Inventor´s compensation

An employee is entitled to reasonable remuneration once the employer has claimed the service invention. Assessment takes account of the invention’s economic exploitability, the employee’s duties and position, and the company’s contribution, as provided in section 9.

The parties should agree the type and amount of remuneration within a reasonable period after the claim. If no agreement is reached, the employer must determine remuneration by a reasoned declaration in text form and pay accordingly. Determination must take place no later than three months after grant of the protective right. Contributions of multiple inventors must be addressed separately.

The employee may object to the determination in text form within two months. Without an objection, it becomes binding, subject to the statutory rules, including those governing multiple inventors.

Either party may seek agreement to a revised remuneration arrangement if the circumstances material to the original determination change substantially. Remuneration already paid cannot be reclaimed under section 12(6).

6. Free invention

A free invention is an employee invention that does not qualify as a service invention under section 4. Notification in text form must provide enough information to allow the employer to assess that distinction, rather than merely the invention’s novelty. Notification is unnecessary where the invention is obviously unusable in the employer’s field of activity.

The employee must notify the employer of a free invention in text form, subject to the statutory exceptions. If the employer does not dispute in text form within three months of receipt of the notification that the invention is free, it can no longer be claimed as a service invention under section 6 of the Employee Inventions Act.

Before otherwise exploiting a free invention during employment, the employee must offer the employer at least a non-exclusive licence on reasonable terms if the invention falls within the employer’s existing or planned field of activity at the time of the offer. The privilege expires if the employer does not accept within three months. If the employer is willing to acquire the right within that period but disputes the terms as unreasonable, either party may apply to the court to determine them under section 19.

7. Technical suggestions for improvement

Technical improvement proposals concern technical innovations that are not eligible for patent or utility model protection. Where they give the employer an advantage comparable to an industrial property right, section 20 grants reasonable remuneration once the employer exploits them. Other treatment may be governed by collective agreements or works agreements; contractual reporting duties require separate assessment.

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