Employee invention law in Germany governs the legal rights of employees with respect to their inventions under the German Patent Act and the German Utility Model Act.
A distinction is made between service inventions and free inventions. Service inventions are those inventions which have either been made in the course of company activities for which the employee is responsible or which are based to a significant extent on company experience or work. In contrast, free inventions are those inventions which are made by an employee during the course of his/her employment but which are not made within the scope of the employee’s duties in his/her employment nor based to a significant extent on company experience or work. Free inventions do not constitute the result of company work but rather are to be attributed to the private sphere.
In the case of a service invention, the employee has a reporting obligation and an obligation to maintain confidentiality.
An employee is obliged to immediately provide his/her employer with a report as to the invention, and this report must be made in its own right, i.e. not in combination with other announcements. In this report, the technical problem, the solution and the means of implementation of the service invention are to be described. Furthermore, the employee is obliged to maintain confidentiality with regard to the service invention. This obligation continues to apply even after termination of the employment contract.
An employer may claim a reported service invention for itself by way of a written notification to the employee. By laying claim to the invention without restrictions, the employer becomes the legal successor of the employee with respect to the invention. In such a case, the employer is obliged to file an application to the German authorities for an IP right to be granted with respect to the service invention. The obligation of the employer to file an application for the invention will not apply if the employee gives his/her consent to no application being filed, or if legitimate interests of the company require that the reported service invention is not made public by the filing of an application for an IP right.
If the employer does not claim a reported service invention for itself, the employee will be free to remain the proprietor of the invention and to exploit it for him-/herself.
If the employer does claim the service invention, however, the employee is entitled to reasonable compensation.
In the case of employee inventions that are neither made within the course of the employee’s duties nor based on relevant company experience or work, the employee still has a reporting obligation so that the employer is able to check whether or not the invention is indeed a free invention.