Posts by: Kim Garsdal Nielsen | (2) posts

High Court Decision Confirms Low Compensations to Inventors Employed to Invent

Decisions are few when it comes to considering the inventor’s right to compensation in accordance with Section 8 of the Danish Act on Employee’s Inventions (Lov om arbejdstageres Opfindelser). Recently the High Court (Østre Landsret) has passed a decision in U.2012.420Ø, confirming that compensations to inventors employed to invent are low.

In the case in question, a dismissed employee filed a claim with the City Court of Odense against his former employer, claiming compensation for transfer of inventions he had made while still employed. During his employment three inventions were transferred to the employer. The inventions had resulted in two patents and one patent application. His claim was not sustained by the City Court, and the case was appealed to the High Court.

The High Court held that the value of the inventions did not exceed what the employee could be expected to deliver under the terms of his employment, even if one of the inventions originated from an independent project based on the inventor’s own idea. The two other inventions originated from customer’s wishes which the employer, as a traditional customer-driven engineering firm, sought to fulfill for the customers.

The employee was, however, awarded a small compensation for a deficient employment contract, due to the fact that the contract contained a clause according to which the employee was never entitled to any compensation. This is in violation of the mandatory interpretation of Section 8 which states that the employee is entitled to a reasonable compensation, even if something else has been agreed upon.

The High Court decision is well in tune with earlier decisions, e.g. the Supreme Court Decision U.2004.1018H, emphasizing that Section 8 is mandatory, and therefore cannot be dispensed from, e.g. not just because the employer did not claim any compensation at the time of transfer.

Kim Garsdal Nielsen, European Patent Attorney

Utility models are not what they used to be, at least not in Germany

The German Supreme Court (Bundesgerichtshof) has ruled that there cannot be any difference between patents and utility models in the requirement for inventive step. Consequently, it will in most cases no longer make any sense to branch off a German utility model from a patent application if the latter is rejected because of lack of inventive step.

In both Danish and German practice, utility models are normally perceived as small patents that may provide protection for inventions, which do not quite have the inventive step necessary for patenting them, i.e. do not differ essentially from the prior art. In order to distinguish the two related forms of protection, the legislator has decided to term the subject of a utility model a creation, and not an invention. Inventive step as such is not a concept defined by the legislation. Instead the difference is expressed in the requirement that in order to obtain a patent the invention must differ essentially from the prior art, whereas a utility model merely has to differ distinctly from the prior art. In German legislation, which served as a model for the Danish utility models act, a similar distinction exists. More specifically, there is a requirement for “erfinderische Tätigkeit” for patents and “erfinderischer Schritt” for utility models.

Irrespective of this intention in the German legislation, the German Supreme Court has in the decision X ZB 27/05 arrived at the conclusion that the requirements for the distinction from the prior art is the same for utility models as for patents, because it is immaterial whether it is a question of “erfinderische Tätigkeit” or ”erfinderischer Schritt”. The real question is whether the invention is obvious for the person skilled in the art, the way “erfinderische Tätigkeit” is defined in Art. 56 of the European Patent Convention (EPC). Since this is, according to the German Supreme Court, the lowest threshold for inventive step, it does not make sense to distinguish between the two kinds of rights, and consequently, the same threshold must apply for both utility models and patents. 

The German Supreme Court bases its interpretation of the utility model law and the patent law on a third German law, namely ”Gesetz über internationale Patentübereinkommen”. Denmark has a comparable law. However, Article 5 of that law clearly opens up the possibility of having different requirements for different kinds of protection. Therefore, it cannot be assumed that the situation for utility models in Denmark has changed. In Danish practice, it must still be assumed that lower requirements to inventive step apply to utility models, as compared to patents.

Even though German utility models and patents are now assessed using the same standard, good reasons for applying for a utility model in Germany may still exist, e.g. because of the fast establishment of a right without examination. Furthermore there may on rare occasions be a difference in what constitutes prior art for a utility model and a patent, because prior public use of an invention outside Germany is not valid prior art for a German utility model. In that case the branching off of a utility model may still make sense.

Kim Garsdal Nielsen, European Patent Attorney