According to German law, the inventor initially owns the rights in an invention. On the other hand, the employer of an employee inventor has a legitimate interest in the invention, since it arose from the working relationship. The German Employee Inventions Act governs the balance of these interests.
When employees have made an invention, they must report it to their employer immediately. The rights in the invention are then automatically transferred to the employer, unless the employer releases the invention to the inventor due to lack of interest in the invention within four months of the report.
If the invention has been transferred to the employer, he has to apply for a corresponding patent or utility model, unless it has been agreed with the inventor that the invention is to be treated as a trade secret. In both cases, the employer is obliged to pay the inventor remuneration, the amount of which is determined in accordance with official remuneration guidelines.
The employer can also apply for patents on the invention abroad in countries of his choice. However, for countries in which the employer does not intend to file an application, he has to release the invention to the inventor in due time for the inventor himself to be able to file respective foreign applications claiming the due priority. At the same time, the employer can reserve a right of joint use of the foreign applications filed by the inventor, which is subject to payment.
If the employer intends to abandon a property right based on the employee invention, he has to inform the employee inventor of this intention in due time for the inventor to be able to pursue the protective right at his own cost. In this case, the employer may also reserve a right of joint use subject to payment.
The statutory provisions outlined above are more detailed than in most other countries. It is not possible to deviate from the provisions in advance to the detriment of the employee inventor, for example by way of the employment agreement. In most cases, there is therefore a considerable need for advice in this area.
Since we represent numerous medium-sized German companies, we have great experience in advising on questions regarding employee inventions and also assist our clients in their internal organisation in this respect, including how to calculate the inventor’s remuneration.