In a dispute, independent arbitrators can often be helpful. Two such independent arbitration boards are located at the DPMA: the Arbitration Board under the Employee Inventions Act (Gesetz über Arbeitnehmererfindungen) and the Arbitration Board under the Act on Collective Management Organisations (Verwertungsgesellschaftengesetz). Their task is to mediate an out-of-court settlement — and there are a large variety of contentious issues out there.
Arbitration Board under the Employee Inventions Act
Provisions under the Employee Inventions Act
Employees have the obligation to report an invention made during the employment relationship to the employer.
Employers have the obligation to apply for a patent for a reported invention and are entitled to transfer the right to the patent to themselves.
THEN the employee receives a remuneration claim for it.
Did you know that more than 90% of all patent applications filed with the German Patent and Trade Mark Office derive from the work of employees?
For these inventions, too, the “inventor principle” applies, which states that inventors have the right to the patent for their invention (section 6 of the Patent Act). However, under labour laws, work results are considered as the employer’s property and as already compensated by the employee’s pay.
To achieve an appropriate balance of interests in this situation, employees are obligated under the Employee Inventions Act to report to their employer any inventions made during the term of an employment contract. If the employer claims the invention for themselves, they are obligated to secure the right to the patent with a patent application, but they may also transfer this right to their ownership. In return, the employee is entitled to an appropriate compensation.
This means that the transfer of ownership of the inventor’s right converts the employee’s right to the patent into a claim for compensation against the employer.
To establish the amount of compensation, “the commercial applicability of the service invention, the duties and position of the employee in the enterprise, and the enterprise's contribution to the invention” have to be considered under section 9 of the Employee Inventions Act. This way, the employee can obtain the appropriate share of the economic advantages (share factor) which the employer receives from their right to the patent (invention value).
Because the amount of the compensation is determined by these undefined legal terms, differing point of views can easily arise between the company and its inventors. However, according to the government’s wishes, these should not lead to a deterioration of the relationship between employer and employee.
For this reason, the state created the Arbitration Board under the Employee Inventions Act at the DPMA. It usually consists of a chairperson who is qualified for judicial office as well as two patent examiners. While the chairperson’s position is permanent, the DPMA appoints the patent examiners to the respective arbitration proceedings based on their particular technical knowledge. This ensures that the Arbitration Board can always draw on the best possible legal and technical expertise.
First, the Arbitration Board gives employees and employers the opportunity to present their point of view. Then, it submits a settlement proposal to the parties. If they accept the proposal, a contract under private law is concluded, which ends the dispute. If they object to the proposal, the arbitration board proceedings are legally deemed to have failed. The participants still have the option to solve their dispute in another way, either in or out of court. Often, they settle based on the settlement proposal, even if they objected to it, while court proceedings only rarely occur.
The Arbitration Board is the first point of contact when the dynamics of the technical and economic development lead to new questions regarding the inventor’s rights. This is why the Arbitration Board regularly publishes selected disputes in an anonymised form.
Course of arbitration proceedings
Employees and employers
are given the opportunity to present their respective views
Arbitration Board
submits a settlement proposal
acceptance of the settlement proposal
amicable settlement = the parties conclude a private-law contract, thereby settling the dispute.
Objection to the proposal
arbitration proceedings are deemed to have failed. The parties are free to resolve their dispute elsewhere — in or out of court.
In the year 2025, the Arbitration Board concerned itself with the following questions, among others:
- Reporting of confidential company information as invention — Arb.Erf. 02/23
- Distinguishing service inventions from free inventions — Arb.Erf. 22/24.
- Questions regarding the limitation period for service inventions that have become free — Arb.Erf. 46/23
- Value of the invention within the company, order development or use by the company? — Arb.Erf. 25/23
- Rights of the employer in case of a community of joint inventors — Arb.Erf. 11/24
- Calculating a lump sum payment for an invention — Arb.Erf. 30/22
- Lump sum approaches for calculating the invention value in case of complex parts — Arb.Erf. 07/24
For more details about these or other selected cases and information about our Arbitration Board and employee invention law, please visit our webpages.
| Requests | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Receipt of requests | 53 | 60 | 53 | 52 | 56 |
| Arbitration proceedings concluded by | |||||
| Settlement proposals and compromises | 44 | 43 | 36 | 35 | 34 |
| Proposals accepted (%) | 65.9 | 67.4 | 61.1 | 62.9 | 64.7 |
| Refusals to participate in arbitration proceedings | 16 | 6 | 9 | 11 | 8 |
| Other cases concluded, in particular, by withdrawal of request, order, provisional proposals, etc. | 8 | 2 | 6 | 7 | 6 |
| Total of cases concluded | 68 | 51 | 51 | 53 | 48 |
| Arbitration proceedings pending at the end of the year | 73 | 82 | 84 | 83 | 91 |
Arbitration Board under the Act on Collective Management Organisations
The Arbitration Board under the Act on Collective Management Organisations (Verwertungsgesellschaftengesetz; VGG) concerns itself with disputes between users or their associations and collective management organisations (CMOs). In particular, it examines whether the tariffs set by the CMOs are appropriate and applicable and it decides on the conditions of general agreements between CMOs and user associations. The Board can also order the empiric investigation of devices and storage media.
Collecting societies such as GEMA make it easier for users and rightholders to conclude licence agreements for the daily large-scale transactions that regulate the use of works protected by copyright. In addition, they collect remuneration for uses permitted by law that have to be paid for. In the tariffs, the CMOs define the conditions for granting the rights they exercise. Users can have the Arbitration Board check if the tariffs are reasonable.
In the reviewed period, the number of pending procedures once more decreased. At the end of the year, 112 procedures were still pending, 75 procedures were completed and 45 newly initiated, including a request to carry out an empirical investigation.
Among other things, in the period under review, the Arbitration Board looked at the compensation for the use of music in on-board entertainment systems on long-distance trains and suggested a compensation of 1.29 euro per seat and year (Sch-Urh 02/22).
The Arbitration Board also decided that the printing of a work of fine arts in a museum catalogue, which was permitted by a licensing agreement, does not have to be compensated separately, since the contractual permission has priority over the legal permission (Sch-Urh 07/22).
For the use of literary works on the intranet of public institutions of higher education, the Arbitration Board suggested an annual compensation of 12,275 million euro for the years 2020 to 2022 as well as 12,845 million euro starting from the year 2023 in general agreement proceedings. In these proceedings, the Board also looked at the relation between contractual and legal permissions. In addition, it examined the interpretation of the Creative Commons licensing conditions as well as the question of whether the respective internet use constitutes a public use (Sch-Urh 90/20).
All decisions mentioned above and many more are published in anonymised form here.
| Requests / Cases concluded | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Requests | |||||
| Total requests received | 58 | 61 | 55 | 57 | 45 |
| including inclusive contracts under Sec. 92(1), no. 3 CMO Act | 1 | 1 | 1 | 2 | 0 |
| Cases concluded by | |||||
| Settlement proposals of the Arbitration Board | 95 | 56 | 43 | 48 | 49 |
| Partial settlement proposal of the Arbitration Board | 13 | 0 | 0 | 0 | 1 |
| Order | 111 | 55 | 59 | 19 | 26 |
| Total (without partial settlement proposals) | 206 | 111 | 102 | 67 | 75 |
| Requests pending at the end of the year | 248 | 198 | 151 | 141 | 112 |
| Payment of security / provisional settlement | |||||
| Requests | 4 | 12 | 14 | 3 | 4 |
| Orders | 37 | 6 | 16 | 4 | 1 |