Employee Invention Law (ArbEG) established in the year of 1957 aims at solving the conflict between employer specific aspects according to which the employer is entitled to the work result of his employer, and patent rights according to which an invention exclusively belongs to the inventor (§ 6 PatG).
In Germany, approximately 80 to 90 % of all domestic patent applications are employee inventions. Protection of inventions by means of patents or utility models is an important instrument to secure company performance. Errors or even disregarding the German Employee Invention Law can entail substantial consequences. For example, disregarding of the regulations specified in this Law can result in damage claims of the employee.
The scope of application of the ArbEG is extended to all employees in private or public employment, public officers, academia employees and soldiers. However, not subject to the ArbEG are retired persons, freelancers and legal representatives of corporate bodies as, e.g., executives of a limited liability company.
Factually, inventions qualifying for a patent or a utlity model (§ 2 ArbEG) as well as ideas for improvements which cannot be protected by patent or utility model law (§ 3 ArbEG) are concerned.
After termination of employment, the rights and duties emanating from the ArbEG remain. In practice, claims from the ArbEG which originate from the former employment, persist unchanged. In practice, claims from the ArbEG often are enforced by the former employee only after he has retired or otherwise left the company.
Inventions falling under the scope of ArbEG are distinguished into employee inventions and free inventions. Employee inventions are inventions which have been made during employment and which are based on the experience and the work of the employee in the company (§ 4 ArbEG). In contrast, an employer cannot dispose of free inventions. Nevertheless, the employee also has to report a free invention to his employer so that the latter can check whether actually the invention in fact is a free invention or rather an employer invention. After reporting, in case the employer does not contest to the invention being a free invention within three months from the date of receipt of the report on in written form, then the invention actually has become free and can no longer be claimed by the employer as an employee invention (§ 18 ArbEG).
A duty to report free inventions to the employer does not exist if the invention obviously can by no means be used by the employer. As far as a free invention falls into the company’s field with which he is employed, the employer has to offer the invention to his employer for use. However, in this case it is sufficient if a non-exclusive right (non-exclusive license) for use is offered to the employer. If the employer does not accept this offer within three months, this privilege expires.
After completion of an employee invention, the latter hast to be reported to the employer immediately in written form and signed by the inventor. The report has to comprise the technical object, its solution and how the invention has been made (§ 5 ArbEG). The description of the invention has to be such that the latter is reproducible for the skilled person. If the report is not complete, the employer can demand the required missing information from the employer within a period of two months (§ 5 ArbEG).
The employer has to claim the employee invention by declaration. With such declaration, all rights emanating from the invention are transferred to the employer.
The employer is liable to file an application for a patent in Germany (§ 13 ArbEG) after he has claimed the invention. An application for a utility model can only be filed, in case this seems to be more convenient economically. Then, the German Patent and Trademark Office examines the application and determines whether there is patentable subject-matter. In case a patent is granted, the employer for the subject-matter of this patent achieves a monopoly position on the market. As compensation for this, the employer obtains a payment.
In case the employer does not file an application immediately or not at all, he can be held liable for this by the employee who in this case has the possibility to claim damages.
The employer also may file foreign applications for the invention. For countries in which the employer does not intend to obtain protection, he has to declare the invention as being free for the inventor so that the latter himself has the option to file foreign applications.
Also, in case the employer does no longer want to maintain an existing patent, he has to offer the patent to the employee who is the inventor of the latter so that the inventor may transfer the patent to himself.
As to the claim for remuneration against his employer, the employee is entitled to the latter as soon as the employer claims the invention as a whole. For evaluation of the amount of payment various aspects are taken into account. For example, the economical usability, the tasks of the employee in the company as well as the company’s contribution to making the invention are relevant (§ 9 ArbEG). However, how to exactly determine the amount to be paid is specified in the remuneration regulation. Thus, the employee has a legal claim to an adequate compensation payment which he may – even after leaving the company – enforce legally.
