The Arbitration Board of the German Patent and Trade Mark Office had to deal with an employer’s failure to file an IP right application.

According to the German Employee Inventions Act, an employee has the duty to report an invention to his employer. After receipt of the notification of an invention, the employer must declare to the employee that he claims or releases the invention. If no declaration is made within four months, the invention is automatically considered to be claimed by the employer.

If the invention is claimed and exercised, the employee is entitled to reasonable compensation from the employee invention. According to the so-called monopoly principle, the amount of remuneration is measured by what the invention actually achieves in relation to the prior art. With the claim, however, not only the rights to the invention are transferred to the employer, but also the obligation arises under Sec. 13 (1) of the Employee Inventions Act (ArbEG) to immediately apply for an industrial property right. This should be a patent or a utility model, one or the other being more appropriate depending on the situation.

In the present case, the Arbitration Board has now clarified with the present ruling that an employer cannot release himself from his obligation by claiming that the invention is not patentable. In the opinion of the Arbitration Board, such an assertion would constitute an infringement of Sec. 13 (1) ArbEG. The decision on the patentability of an employee invention can only be made by the German Patent and Trade Mark Office in the patent granting proceedings, or by the higher instances of the German Federal Patent Court or the German Federal Supreme Court in appeal proceedings, appeal on points of law proceedings, or nullity proceedings.

Thus, the Arbitration Board would always award a compensation to the inventor for damages resulting from the non-filing of the patent application. This is intended to place the inventor in the same position as if a patent was granted for the service invention.

We point out that an employer would not be liable to pay compensation in a case where the employee generally communicates an improved technical teaching to his employer without doing so in the form of an invention disclosure. In this case, the invention is the object of the work to be performed under the employment contract and is directly transferred to the employer’s property. Under these circumstances application for industrial property rights is at the discretion of the employer.

Arbitration Board of the GPTO, Case number: 39/16

June 18, 2020
Thorsten Brüntjen
Patent Attorney