SONN Patentanwälte – IP Attorneys

Refund of costs for employees' inventions

Employees have the obligation under Austrian Law to communicate their service inventions to the employer "without delay". They have on the other hand the right to file themselves patent applications for their inventions. But there are no consequences in the law if they do not communicate their service inventions to the employer besides general damage claims which are normally not existent in case they file patent applications. Therefore, it happens that the employee prosecutes the applications, files convention applications, extensively develops the invented product, looks for licensees, etc. before the employer realises that there is a service invention on which they could claim rights. This is often the case at universities where the knowledge of what their employees do is rather restricted. All that because the employee thinks that his invention is free for him for whatever reason.

The term for the employer to accept the service invention as his own right starts with the moment he gains knowledge of such service invention. If the employee is late with his communication for considerable time or the employer realises these facts only after years, the question arises what costs he has to refund for the activities of his employee spent to protect and develop the invention to a marketable product. These activities at the end are to the benefit of the employer, especially if it is a university.

Under Austrian Law the employee has certainly a right to reclaim such costs from the employer who has belatedly taken up his rights. It is clear that he can claim all costs he has actually spent and which benefitted the employer. These include the full costs of all patents (including attorneys fees) and the costs of development. In fact, he should also be compensated for his own time spent for the development of the product. These costs also include the costs of litigation to secure the patent rights, if any.

However, the employer can in return ask for the benefits gained by the employee out of the invention, i.e. the licence fees earned. Instead he could also ask for a reasonable licence fee to be paid for the use of the invention to which he has the right by law calculated on the price and amount of products sold.

From the time onwards the employer has taken up its rights on the invention and in exchange for it he has to pay the remuneration due to the employee, which could be deducted from the benefits gained or the licence fees payable.

DI Helmut Sonn