Employee inventions

Employee inventions / Arbeitnehmererfingungen

June 25, 2024

In principle, the rights to inventions and work results that arise in the course of work performance belong to the employee as the creator. However, from a labour law perspective, the employer is generally entitled to all results, including inventions, which arise in the context of work performance remunerated and supported by the employer. The Employee Inventions Act (ArbnErfG) balances out this contradiction between the interests and rights of the parties to the employment contract. However, there are also legal bases outside the scope of the ArbnErfG (technical inventions eligible for patent or utility model protection), for example for works by an employee that are subject to copyright.

In fact, it is estimated that employee inventions form the basis for more than 80 % of patent applications in Germany.

Types of inventions

Employee inventions are inventions made by the employee which are based on the work for which he is responsible (contract inventions) or on the experience of the company in which he works (task inventions) and which were created during the legal existence of the employment relationship.

The employee must report such an invention (including any involvement of colleagues) to his employer and may not utilise it or dispose of it (e.g. sell it). The employee is also obliged to keep the invention secret. If the employer claims the invention for himself following the notification or does not declare its release within four months, all rights are transferred to him. In return, the employee is entitled to appropriate remuneration on the basis of Sections 9, 10 ArbnErfG (even after termination of the employment relationship) and to register the invention as a patent or utility model, Sections 13 et seq. ArbnErfG.

The period within which the employer must claim the invention begins with the notification. If a notification has not been made, it only begins if the employer can prove that he already has the knowledge that he should obtain through the notification and that it is therefore unnecessary. If the employer does not claim the invention or does not claim it in due time, it becomes free and the employee can utilise it himself.

Free inventions are inventions made by the employee during the term of the employment relationship that do not fulfil the other requirements of a service invention, such as being related to the work performed.

The employee must also report a free invention to his employer immediately and offer him at least a non-exclusive right of use, Section 19 ArbnErfG. Exceptionally, these obligations of the employee do not apply if the invention does not fall within the area of activity of the company in which the employee works.

The employee is also entitled to appropriate remuneration for this, but the basis for this is not the employment relationship, but a parallel legal relationship of its own, so that the remuneration is not to be classified as earned income.

Technical improvement suggestions are technical innovations that are not patentable or utility modelable. The employee must inform the employer of them if they have arisen from work performance or are related to work in the employer's company.

The employer has a right to utilise these suggestions, whereby the employee is only entitled to remuneration under the law if the suggestions are qualified, namely if they lead to a similar position for the employer as an industrial property right, Section 20 ArbnErfG. Otherwise, remuneration is based on collective agreements or employment contracts and, if these do not exist, on the following conditions: Exploitation by the employer, performance by the employee in excess of the obligation under the employment contract as a basis and the employer has a considerable advantage through implementation.

Copyrights to work results

Works from the fields of literature, sound art, visual art, photographs, film as well as computer programmes and technical and scientific presentations are not covered by the ArbnErfG, as this only regulates the handling of technical innovations (which also includes microbiological processes and, in corresponding application, plant breeding with plant variety protection).

The rights of use and exploitation of such work results, which the author creates in fulfilment of his employment contract (or service contract) obligations, and his remuneration claims are governed by the general provisions of Sections 31 et seq. of the German Copyright Act (UrhG) in accordance with Section 43 UrhG. UrhG. However, it is recognised in legal literature that the employee is obliged to grant the employer the rights of use to his copyrighted works, usually tacitly (without express contractual agreement) in advance for use and exploitation within the scope of the employer's business purpose. As a rule, however, contractual provisions are made in this regard, especially in particularly affected professions. An exception exists in accordance with Section 69b UrhG for computer programs that the employee creates as part of his contractual duties - in this respect, the employer has the right to exercise all property rights to these.

Sections 32, 32a UrhG give rise to a claim to remuneration on the part of the employee as the author of the above-mentioned works, which cannot be contractually waived. However, it is generally assumed that an author who creates a work as an employee as part of their work performance has no claim to remuneration from the employer over and above the remuneration for their work, because so-called compulsory works (which are created as part of the work obligation) are already covered by the remuneration. However, this only applies if the total remuneration received is strikingly disproportionate to the income from the utilisation of the work. However, at least the utilisation of the work by the employer outside the purpose of the business, which is not contractually permitted, leads to an additional claim to remuneration.

Contractual regulation

A contractual regulation of the transfer of rights and remuneration of work results is particularly useful and widespread in professions that usually include innovations as part of the work performance, such as programmers, architects, graphic designers, copywriters and engineers. The clause should be formulated in stages depending on the legal protection of the work results (under the Employee Inventions Act or the Copyright Act).

As far as technical work results are concerned, i.e. inventions and suggestions for improvement, a reference in the employment contract to the application of the German Employee Inventions Act (ArbnErfG) and, if applicable, a reference to the obligation to notify the employer is usually sufficient.

With regard to copyrights, it is advisable from the employer's point of view to expressly transfer the rights of use, which should be exclusive, unlimited and for all (also unknown) types of use. It makes sense to specify the exact types of use, even if not exhaustively, such as utilisation and distribution. The modification and adaptation of the work would generally be inadmissible under the Copyright Act, but can be authorised by a corresponding clause. A provision can also be made regarding the time of the transfer of rights, e.g. to include preliminary stages or drafts, by referring to the time of creation of the rights. It is possible to expressly stipulate that the transfer of rights is fully settled with the payment of the salary and what should apply in the event of termination of the employment relationship.