When a key employee leaves a company, a familiar request often lands on the legal team’s desk: “Let’s have them sign something confirming they have no further claims to compensation for their inventions.” It sounds tidy. It feels safe. And under German law, in the blanket form it is usually drafted, it frequently does not work.<\/p>\n\n\n\n
Germany regulates employee inventions through a dedicated statute, the Gesetz \u00fcber Arbeitnehmererfindungen<\/em> (Act on Employees’ Inventions, or ArbnErfG<\/strong>), substantially modernised in 2009. It is one of the few areas where the law deliberately overrides freedom of contract to protect the employee. Understanding why a simple waiver fails \u2014 and what does work instead \u2014 is essential for any company that develops patentable technology with German staff.<\/p>\n\n\n\n A common assumption is that anything an employee invents on the job is simply the company’s property. German law takes a more structured route.<\/p>\n\n\n\n The Act distinguishes between service inventions<\/strong> (Diensterfindungen<\/em>) and free inventions<\/strong> (freie Erfindungen<\/em>) in \u00a7 4 ArbnErfG. An invention made during the employment relationship is a service invention if it either:<\/p>\n\n\n\n Everything else is a free invention (\u00a7 4(3)).<\/p>\n\n\n\n This second limb is where job titles become misleading. Suppose an employee’s contract describes their role as “business development,” yet in practice they carry out research that leads to patented formulations. The contractual label does not convert those inventions into free inventions. Because the work draws on the company’s know-how, materials, and environment, it will typically qualify as a service invention under \u00a7 4(2) No. 2 regardless of what the job description says. The actual activity<\/em>, not the title, controls the classification.<\/p>\n\n\n\n For a service invention, the Act sets out a procedural sequence:<\/p>\n\n\n\n The 2009 reform added a quietly powerful rule. Under \u00a7 6(2) ArbnErfG, if the employer does not expressly release<\/strong> the invention within four months of a proper report, the invention is deemed to have been claimed<\/strong>. Silence now favours the employer. In practice, where a company has filed patent applications naming its employee as inventor, this is strong evidence that the inventions were reported and claimed \u2014 and therefore that the full compensation regime applies.<\/p>\n\n\n\n Once an invention has been claimed, \u00a7 9 ArbnErfG grants the employee a statutory right to reasonable compensation<\/strong> (angemessene Verg\u00fctung<\/em>). Three features of this right surprise employers most often:<\/p>\n\n\n\n This is precisely why the “departure waiver” is so tempting \u2014 and why the law resists it.<\/p>\n\n\n\n The decisive provision is \u00a7 22 ArbnErfG<\/strong>. The Act’s rules cannot be contracted away to the employee’s disadvantage. An agreement in which an employee simply confirms, in advance and in general terms, that they “cannot claim compensation” for their inventions is, in that form, very likely void<\/strong>.<\/p>\n\n\n\n The rationale is protective: the legislature treats the inventing employee as the structurally weaker party and refuses to let them bargain away a core statutory entitlement before its value is even known.<\/p>\n\n\n\n Section 22 is not, however, an absolute ban on agreements. It draws a sharp line in time. Agreements about a service invention<\/strong> are permissible once the invention has been reported<\/strong> (or otherwise made and disclosed). Before that point, the employee cannot meaningfully assess what they are giving up; afterwards, they can.<\/p>\n\n\n\n This opens the realistic path for a departing inventor. Where the inventions already exist and have been disclosed, the company and the employee can validly conclude a settlement or discharge agreement<\/strong> (Abgeltungsvereinbarung<\/em>) covering compensation for those specific inventions. Such an agreement can include a lump-sum payment and a clean “no further claims” clause \u2014 and it will hold up, because it concerns identified, already-reported inventions rather than a blanket future surrender.<\/p>\n\n\n\n In short: the instrument is a negotiated settlement<\/strong>, not a unilateral waiver<\/strong>.<\/p>\n\n\n\n Concluding the agreement at the right time is necessary but not sufficient. Under \u00a7 23 ArbnErfG<\/strong>, an otherwise admissible agreement is unenforceable if it is substantially inequitable<\/strong> (in erheblichem Ma\u00dfe unbillig<\/em>). And the employee may raise that inequity for up to six months after the employment ends<\/strong> (\u00a7 23(2)).<\/p>\n\n\n\n A token payment dressed up as a settlement is therefore fragile. To be robust, the figure should rest on a genuine valuation.<\/p>\n\n\n\n German practice values employee inventions primarily through the licence-analogy method<\/strong> (Lizenzanalogie<\/em>), guided by the official Richtlinien f\u00fcr die Verg\u00fctung von Arbeitnehmererfindungen im privaten Dienst<\/em>. The core formula is:<\/p>\n\n\n\n Compensation = Invention Value \u00d7 Share Factor<\/strong> (Erfindungswert \u00d7 Anteilsfaktor<\/em>)<\/p>\n<\/blockquote>\n\n\n\n Here lies a trap for employers. The share factor is lower<\/em> when inventing is central to the employee’s job (a head of R&D is paid to invent) and higher<\/em> when the invention falls outside the employee’s assigned role. So an invention produced by someone formally employed in “business development” may attract a larger<\/strong> employee share \u2014 meaning the very job-title argument companies hope will reduce exposure can increase<\/em> it.<\/p>\n\n\n\n Occasionally an invention really does fall outside \u00a7 4(2) \u2014 it neither arose from the employee’s duties nor essentially relied on the company’s work. Then no \u00a7 9 compensation claim arises. But this is rarely the convenient answer it appears to be, because it raises a different question: does the company actually own<\/strong> the invention at all?<\/p>\n\n\n\n For free inventions, the employer’s entitlement is limited (the employee must offer a non-exclusive right of use under \u00a7\u00a7 18\u201319), and the company would need a valid assignment<\/strong> to hold full rights. Insisting an invention is “free” to avoid compensation can therefore expose a gap in the company’s chain of title to its own patents \u2014 a worse problem than the one it was meant to solve.<\/p>\n\n\n\n German law also provides a low-threshold forum before the courts. Under \u00a7 26 ArbnErfG, either party can bring the matter to the arbitration board<\/strong> (Schiedsstelle<\/em>) at the German Patent and Trade Mark Office (DPMA). Its proposals are non-binding but influential, and in many disputes it is the natural first stop before litigation.<\/p>\n\n\n\n For employers:<\/strong><\/p>\n\n\n\n For employees and inventors:<\/strong><\/p>\n\n\n\n A departing inventor cannot simply be asked to sign away compensation they are statutorily owed; \u00a7 22 ArbnErfG stands in the way. But the law is not a dead end for employers. A properly timed, fairly valued settlement \u2014 concluded after the inventions are reported and built on a real licence-analogy calculation \u2014 achieves the clean break companies want, in a form that actually holds.<\/p>\n\n\n\n The mistake is reaching for a waiver. The solution is reaching for a settlement.<\/p>\n","protected":false},"excerpt":{"rendered":" When a key employee leaves a company, a familiar request often lands on the legal team’s desk: “Let’s have them sign something confirming they have no further claims to compensation for their inventions.” It sounds tidy. It feels safe. And … Continue reading The starting point: not every workplace invention belongs to the employer automatically<\/h2>\n\n\n\n
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How the employer acquires the rights \u2014 including by doing nothing<\/h2>\n\n\n\n
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The right that survives everything: reasonable compensation<\/h2>\n\n\n\n
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Why the blanket waiver fails: \u00a7 22 ArbnErfG<\/h2>\n\n\n\n
What does<\/em> work: the post-reporting settlement<\/h2>\n\n\n\n
Even a valid settlement must be fair: \u00a7 23 ArbnErfG<\/h2>\n\n\n\n
How compensation is actually calculated<\/h2>\n\n\n\n
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The other scenario: what if the invention was genuinely “free”?<\/h2>\n\n\n\n
Resolving disputes: the Schiedsstelle<\/h2>\n\n\n\n
Practical takeaways<\/h2>\n\n\n\n
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The bottom line<\/h2>\n\n\n\n