Patent remuneration disputes – German Act on Employees’ Inventions

In a dispute with a former employee, BR (the employer) has been ordered to disclose a company purchase agreement with ZF. The agreement was originally intended to remain confidential and involves a patent for planetary gears.

When BR sold its large gearbox business to ZF in 2015, a patent for planetary gears was also part of the sale. Wind turbines e.g. use these planetary gears.

At the time, the inventor of the planetary gear received a remuneration settlement, customary in such cases under the German Employee Invention Act. However, there is now a dispute as to whether the remuneration was appropriate. The case also concerns the period following the sale of the gearbox business.

The plaintiff argued that he cannot understand the settlement because he lacks the necessary basic data.

The court has now ruled in the employee’s favor and ordered BR to disclose the required supporting documents. This includes the purchase agreement with ZF. This is the only way the plaintiff can check the appropriateness of the remuneration, says the court, in particular the payments relating to the time after the deal.

Disputes over inventions by company employees rarely end up in court. However, it is often disputed when remuneration is “appropriate,” as prescribed by the German Employee Invention Act. It becomes difficult if, as in the BR case, the basis for the calculation is not known. For example, when the purchase price is to be kept secret.

There is a regulation for such cases, the so-called license analogy. However, in this case, the court ruled that this was not enough.