Employee Inventions Act (ArbnErfG)

Basics and objectives

The Employee Inventions Act has created a legal framework for inventions in the employment relationship since 1957. It regulates the balance of interests between the employee’s original right of invention and the employer’s claims. The Act applies to all employees in the private and public sector as well as civil servants and soldiers. The regulations concern patentable and utility model inventions as well as technical improvement proposals. The law makes a fundamental distinction between service inventions and free inventions. The last significant amendment was made by the Act of July 7, 2021. The regulations are intended to ensure appropriate remuneration for employees. The economic use of inventions by the employer is made possible. Legal certainty for both sides is guaranteed Innovation in companies is promoted. Employee motivation is strengthened.

Types of inventions and scope of application

The law distinguishes between service inventions and free inventions as central categories. Service inventions result from the employee’s operational activities or arise primarily from operational experience. Free inventions have no connection with the employee’s business activities. The scope of application extends to all employees, including trainees and executives. Civil servants and soldiers are also covered. The regulations apply to patentable and utility modelable inventions. Technical improvement proposals are regulated separately. The regulations are mandatory and cannot be waived. The rights and obligations are clearly defined. The allocation must be examined on a case-by-case basis. The distinction is made according to objective criteria.

Reporting obligations and utilization

Employees must report service inventions to the employer in writing without delay. The notification must contain all essential information about the invention. The employer can claim the invention within four months. The claim is made by written declaration to the employee. Upon claiming, all rights to the invention are transferred to the employer. The employee is entitled to appropriate compensation. The obligation to report free inventions is limited. The documentation must be complete. The deadlines must be observed. The formal requirements must be observed.

Remuneration claims and calculation

The remuneration for service inventions must be appropriate and take into account the economic usability. The calculation is based on the remuneration guidelines of the Federal Ministry of Labor. Relevant factors are the value of the invention and the employee’s share factor. The remuneration can be determined by agreement or fixed. The Arbitration Board at the German Patent and Trade Mark Office can be called upon. The remuneration must also be paid if the invention is not used. The payment obligation exists for the entire term of the property right. The amount can be adjusted to changes in circumstances. The calculation must be transparent. The documentation must be comprehensible. The claims are inheritable.

Property right applications and foreign applications

The employer must apply for a patent or utility model for service inventions without delay. The application must first be filed in Germany, naming the inventor. Foreign applications must be examined and filed in good time. The employee is obliged to assist with the application. The costs of the application are borne by the employer. The employer is responsible for maintaining the property rights. The employee must be offered the opportunity to relinquish property rights. The transfer of rights is possible. International registration is regulated. Deadlines must be observed. The documentation must be complete.

Confidentiality and trade secrets

Both parties are subject to strict confidentiality obligations regarding the invention. The protection of trade secrets has high priority. The confidentiality obligation also applies after termination of the employment relationship. The disclosure of information requires consent. Documentation must be stored securely. Access rights must be clearly regulated. Breach of confidentiality can trigger claims for damages. The obligation applies to all parties involved. The duration of confidentiality is defined. The exceptions are strictly limited. Control must be guaranteed.

Dispute resolution and legal recourse

The law provides for a multi-stage dispute resolution procedure. The Arbitration Board at the German Patent and Trade Mark Office mediates in disputes. Referral to the Arbitration Board is mandatory before filing a lawsuit. The costs of the arbitration proceedings are regulated. The courts can only be called upon after unsuccessful arbitration proceedings. Jurisdiction lies with the labor courts. The time limits must be observed. The proceedings must be expedited. The burden of proof is regulated. The costs follow the labor court process. Legal remedies are defined.