Justus Kreuels - 6. April 2020

The Employee Invention

Service invention vs. free invention

If the employee makes an invention, the first step is to clarify whether it is a service invention or a free invention. One speaks of a service invention if the employee's invention was made during the duration of the working relationship (also outside the service period or office) and if it is related to the technical field in which the company is active.

A free invention is one that does not arise from the employee's operational experience and does not represent a direct operational work result in the employer's technical sector. Whether the invention is exploited, licensed or sold is then the decision of the inventor.

In the case of free inventions, however, it should be noted that the employer has quite extensive rights to the inventions of his employees. In principle, the employee should first assume that his invention is a service invention. If the employee wishes to be able to pursue an invention as a free invention, it is highly desirable for him to reach an agreement on this with his employer.

Employee Invention - What to do?

Employee inventions can be protected by a patent or utility model. The requirements for this are: Novelty, inventive step and industrial applicability.

The employee must first inform the employer about the invention and the employer is obliged to acknowledge receipt of this notification without delay.

If the invention is a service invention, the employer must announce in writing within 4 months whether he will release the invention or whether there is an interest in the employee's invention. If the employer wants to take over the invention of an employee for his company, he is in most cases also obliged to register an intellectual property right, which of course also incurs costs. However, there may be possibilities to modify this obligation by contractual arrangements between the employee and the employer.

When an invention originating from an employee is claimed by the employer, the employee's rights also arise under the Employee Invention Act - in particular the right to a claim for compensation. Adequate remuneration of the inventor is an important point of discussion in the case of employee inventions.

In principle, however, the employer is very free in his entrepreneurial decision as to how he uses claimed inventions of employees. The employee has no right to participate in deciding how an invention is or is not realized by the company. For example, the employer also has the right to resell or license inventions even if the employee believes the invention would be better used within the company.