Which companies best manage the invention process

The tips - what you should consider when inventing employees according to the Employee Invention Act ArbnErfG

Employment contracts often contain a clause that states that all service inventions are already considered to have been paid for with the “normal” remuneration. On the one hand, this represents an ineffective compensation clause for an employee invention and, on the other hand, it reduces the employees' motivation to invent new things, since the employer just wants to "rubbish them". Since in Germany the law on employee invention, the Employee Invention Act (ArbnErfG), regulates the rights and obligations of employees and employers in the event of an invention, you will find an orientation on the subject below.


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Employee Invention Act ArbnErfG - Rights to an employee invention

The new development and improvement of marketable products and processes of a company are among its most important intangible assets and contribute decisively to the growth of the company. So that the advantage is not only on the side of the company, the legislator created the Employee Invention Act and adapted it to the current circumstances in July 2009. According to its rules, the employer is fundamentally entitled to the employee invention that has arisen in the course of the official work, but the employee has a compensatory remuneration claim. This law also regulates the treatment of other creative achievements in the context of suggestions for improvement by employees, which as employee inventions increase the performance of a company. Therefore, you should definitely coordinate the requirements of the law with the regulations of your improvement proposal system.

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Definition: Employee invention in the Employee Invention Act ArbnErfG

According to Wikipedia, an invention is defined as "a creative achievement through which a new solution to a problem, ie the achievement of a new goal with known means or a known goal with new means or a new goal with new means, is made possible". The Employee Invention Act on an employee invention first differentiates between operational innovations in a more practical way

  • Inventions that are patentable or suitable for utility models and
  • technical suggestions for improvement, as other, non-protectable technical innovations.

In the case of an employee invention, the Employee Invention Act ArbnErfG further differentiates between tied inventions (so-called service inventions) and free inventions.

  • Service invention
    • from the activities incumbent on the employee or
    • are largely based on operational experience or work / resources of the company.
  • Free invention
    All inventions by employees that are not service inventions are free inventions.

The employer must also be notified of a free employee invention!

The employee must immediately notify his employer in writing of any invention. In the case of free inventions, according to Section 18 (1) of the Employee Invention Act ArbnErfG, the employer should be given the opportunity to assess within a period of three months whether the invention is really free or whether it could be used by the company. The scope of the mandatory written report for service inventions, on the other hand, is given in Section 5 (2) ArbnErfG. If this report has been properly received, the employer must confirm to the employee in writing the exact time of receipt of the report. From this point in time, the statutory four-month period runs for the employer, in which he must decide whether he wants to make limited or unlimited use of the service invention. If the employer does not release the invention, all asset rights to the service invention are transferred to him. The employer is now obliged and entitled to register his property rights and has to inform the inventor about the entire course of the application. If the employer declares that he will not make use of an invention, it becomes a free invention that the inventor can now dispose of.


An employee invention is to be remunerated appropriately for the employee

According to the Employee Invention Act ArbnErfG, the employee is entitled to “reasonable” remuneration from the employer as soon as the employer has made use of the service invention. Factors such as:

  • the economic usability of the service invention,
  • Task and position of the employee in the company and
  • Share of the employee and the company in the realization of the service invention.

In order to ensure a uniform determination of the remuneration, the Federal Ministry of Labor and Social Affairs has issued “Guidelines for the remuneration of an employee invention in the private sector”. If there is still no agreement on the remuneration, the arbitration board provided for in the ArbnErfG at the German Patent and Trademark Office (DPMA) can be called upon. Only if no agreement has been reached with the help of the arbitration board, the amount of the remuneration can be clarified in court. If an employer does not want to disclose the invention through patenting in order to keep it as a trade secret, there are special regulations in the ArbnErfG in order to still determine compensation for the inventor.

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Danger !Remuneration for technical improvement suggestions

According to Section 20 (1) of the Employee Invention Act ArbnErfG, the employee may also be entitled to appropriate remuneration for technical improvement suggestions that grant the employer a similar preferential position as an industrial property right, which is to be structured in accordance with a service invention. In this case, however, there are additional provisions in a collective agreement or an existing works agreement.

I wish you much success.
Your Reinhold Kaim


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