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Inventions of employees

Employees are very inventive. This is evidenced in that more than 80% of inventions filed in Germany are conceived as part of an employment relationship. In this respect, the Law relating to inventions of employees governs the rights and obligations of the employer and the employee. Inventions eligible for patent or utility model protection are legally divided into service inventions and free inventions.

Service inventions are inventions that are conceived as part of an employment relationship and result from the work activities of the employee or are decisively based on the experiences and the workings of the company. For example, the invention of a new power take-off shaft by an employee (e.g., a design engineer working in this field or even a doorman) of a company that manufactures power take-off shafts is considered a service invention.

The main responsibility of the employee with respect to service inventions is the immediate notification of the employer in writing. This is realized in the form of an invention announcement that is identified as such. The invention announcement needs to describe the problem to be solved as well as the solution achieved with the invention, wherein the description needs to be defined so clearly that the invention can be reproduced by the employer. In addition, it must be described how the service invention was conceived (e.g., type and extent of the employee’s participation). When the invention announcement is submitted with the employer who has the right to the appropriate the invention, the employer immediately needs to acknowledge receipt of the announcement and the date of reception. Once the invention announcement is received, the employer needs to act quickly because the right to releases can be asserted within a period of four months. If the employer misses this deadline, the appropriation right is asserted. The assertion of the appropriation rights is also referred to as “availment of the invention”. An availment results in the employee surrendering all authority and bestowing exclusive rights upon the employer. However, the employer is also obligated to immediately file an application for the invention. If an application is pursued, the employer is obligated, if not stipulated otherwise, to provide the employee with copies of the application documents, to inform the employee of any progress in the application process and to grant the employee access to the pertinent correspondence. The employee is obligated to assist in the preparation of the application documents upon a corresponding request by the employer. The employer is also entitled but not obligated to file subsequent applications in foreign countries.
 

The employee is obligated to notify the employer of any non-proprietary inventions, i.e., inventions that are conceived during an employment relationship, but do not pertain to the employee’s field of activity. This notification is intended to provide the employer with an opportunity to confirm that the invention is actually a non-proprietary invention and not a service invention. If the opinion of the employer contradicts the opinion of the employee and the employer argues that the invention is actually a service invention, the employer needs to inform the employee accordingly within three months after receipt of the notification. If the employer misses this deadline, all claims to the invention are forfeited, namely even if the invention is actually a service invention. An example of a non-proprietary invention by an employee of a manufacturer of power take-off shafts would be a new toothbrush.

Since the employee should not be left empty-handed due to the appropriation of the invention by the employer, the employee is entitled to compensation. This entitlement, in principle, is transferable, inheritable and seizable. If the employer asserts utilization, the entitlement to compensation of the employee arises from the assertion of usage rights and usually ends with the expiration or forfeiture of the protection right.

It is relatively difficult and requires significant experience to determine the appropriate compensation. If the compensation is calculated by means of a formula, the industrial applicability of the service, the duties and the position of the employee within the company as well as the share of the company’s contributions in the accomplishment of the service invention are used as evaluation factors. For example, if the above-cited inventive employee of a manufacturer of power take-off shafts is a design engineer who works in the corresponding field, it is conceivable that this employee receives less compensation than the doorman of the same company.

The type of compensation payment is not legally prescribed and therefore negotiable. It has become common practice to render payment in the form of a continuous share of profits that is settled annually, a lump sum settlement or a combination thereof. In any case, the possible compensation incites the employee to become inventively active.

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