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Employee invention law - horak Attorneys at Law, Germany

The Employee Invention Act regulates the legal allocation of inventions and the technical improvement suggestions from employees. The following checklist is intended to give an initial decision-making aid to the employer confronted with the notification of a job-related invention. It is neither intended nor appropriate to replace individual legal advises in individual cases. Accordingly, the following presentation shows the decisions and deadlines that are relevant to the employer after notification of a job-related invention:

1. Notification of employee´s invention

The employee, who has made an invention, must report this immediately in written form. He has to observe a number of formal and content requirements. In particular, the employee has the technical task of describing his solution, the condition of his invention and existing records, as they are required in the checklist. Instructions are to be given in the notification to the directives or outlines issued to the employee; the experience or the work of the company, the employees and the nature and extent of their cooperation are to be emphasized, and thus the reporting employee can start looking at his own portion.

2. Immediate Aknowledgment

The employer shall immediately confirm the date of receipt of the notification to the employee in written form. In case the notification does not correspond to the abovementioned requirements, the employer has two months to explain to the employee that the notification requires supplements. He shall assist the employee, if necessary, in completing the notification. If the employer completes the clarification within two months, the declaration shall be considered completely valid.

3. Claim

The employer can make use of an invention if he has a written declaration signed from the employee inventor. The declaration shall be made as soon as possible and no later than four months after the receipt of the proper notification.

4. Effect of claim

 a. Unlimited claim

By accessing the unrestricted claiming declaration, all rights that regard the job-related invention are transferred to the employer. The employer is obliged to register the invention in Germany to grant property rights.

A registration must be made only if the employer expressly write that the invention is released, only makes limited use of it, agrees with the employee, or if he classify the invention as business secret for justified interest.

If the employer fails to comply his obligation, the employee can specify an appropriate extension. Thus, the employee may effect the application for the employer, on his name and costs.

If the invention become available, and the employer declare in written form that it is released, in fact it can be restrictively used, in this way the employee is the only one entitle to register it.

The employer is entitled, but not obliged, to register the invention in a foreign country. For foreign states, in which he does not wish to acquire property rights, he has to release the invention to the employee, and to make possible for him the acquisition of foreign countries´ protective rights. For appropriate remuneration, he may grant a non-exclusive right of use in the foreign states concerned.

In return for reasonable compensation, he can get non-exclusive right of use in relevant foreign jurisdiction.

 b. Limited claim

 If the employer's right of use unreasonably impedes the employee's further exploitation of the service invention, the employee can request that the employer start making an unlimited use of the invention or the service invention should be released to the employee in within two months.

5. Inventor´s compensation

The employer has to pay an adequate remuneration to the employee for unlimited use of the service invention. In case of a limited claim, the remuneration obligation arises only when the employer also make use of the invention. 

The type and amount of the remuneration must be agreed in between employer and employee. If an agreement is not made within a reasonable period of time, the employer should set the remuneration on reasoned written declaration and pay according to the stipulation. In case of unlimited use, the compensation shall be fixed no later than three months after the grant of the protective right; in case of a limited the compensation should be fixed no later than three months after the start of claim. 

The employee may object to the determination with a written declaration within two months if he does not agree with the fixing. If the employee does not object, it will be mandatory for both parties.

Employers and employees may require a reciprocal approval in case they want to change the provision and order to request a different compensation or in case the circumstances for fixing and assessment of the remuneration significantly change.

6. Free invention

Free inventions are made by the employee during the employment period in a certain company, without having to be job-related inventions; they are not tasks imposed by the employer and they are not based on the experience and work of the company. The employee, who has made a free invention during the period of employment, must immediately inform the employer with a written declaration. The communication must provide so much information about the invention so that the employer can assess whether the invention is still innovative or not.

After the receipt of notification, the employer may check if the invention is still available in a period of max. 3 months. If he does not do so, the invention will be classified as job-related invention.

The employee has to offer to the employer at least a nonexclusive right of use of the invention at reasonable conditions, before otherwise utilizing the free invention during the period of employment. The invention has happened to be discover in the working area of a certain company, while working for an employer. The employer can accept the offer within three months, otherwise his / her privilege expires. If the employee declares his willingness to acquire the right of use within the three-month period, but the conditions are found to be inappropriate, the court shall determine the conditions on request of the employer or the employee.

7. Technical suggestions for improvement

Technical suggestions for improvement are such recommendations for technical innovations that are not eligible for patent or utility models purposes. Those technical suggestions for improvement can be evaluate from the employed. For such suggestions, the law does not include any reporting or notification obligation. However, the employee is obliged from his work´s contract to report such suggestions for improvement.

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© German lawyer Michael Horak 2002-2018

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