Frankfurt higher court ruling favours employers on inventor compensation

The ruling from Frankfurt Higher Regional Court concludes a legal dispute ongoing since 2018, which was referred to the Federal Court of Justice during proceedings. It bolsters employers’ position by confirming they can withdraw from compensation arrangements that exceed statutory requirements, even years after implementation.

The 6th Civil Senate under presiding judge Arne Hasse followed the reasoning of family-owned company Kettenbach, a German specialist in chemical dental materials, that a “substantially unfair remuneration agreement” existed, which the employer later dispensed with (case ID: 6 U 172/20).

Employee Inventions Act provides basis

Kettenbach demonstrated through detailed calculations that since 2012 it had consistently paid its employee more than 100% of the statutorily required compensation for the invention. From 2017, the company compensated the inventor according to statutory provisions. This included a ‘share factor’, which the court deemed appropriate. This factor considers the company’s contribution to the invention, such as materials provided. The employee had sought to continue the previous compensation arrangement until the patent rights expire in 2035, including back payments from 2017.

Additionally, the Higher Regional Court rejected claims of “company practice”. In German employment law, this concept refers to the regular, uniform and unconditional provision of voluntary benefits, such as Christmas and holiday bonuses. While this can create legal entitlement, Federal Employment Court precedent states this only applies where no other collective or individual legal basis exists. The Employee Inventions Act provides such a basis, according to the Federal Court of Justice’s interim appeal ruling of November 2024 under presiding judge Klaus Bacher (case ID: X ZR 37/22).

Osborne Clarke for Kettenbach

Employer Kettenbach retained Peter Rädler from the Karlsruhe-based firm Mennemeyer & Rädler for German Federal Court proceedings. Rädler regularly appears before the 10th Civil Senate. In the IP field he specialises in proceedings regarding patents and utility models before the highest German civil court.

At the Higher Regional Court Frankfurt, Osborne Clarke represented Kettenbach, led by Cologne-based partner Andrea Schmoll. Schmoll brings extensive experience in IP law and heads the firm’s German life sciences and healthcare practice, while also serving as co-chair of the global life sciences and healthcare group. Senior associate Jonas Völkel was also part of the team.

Name partner Thomas Von Plehwe from Karlsruhe firm Von Plehwe represented the plaintiff before the Federal Court, where he frequently handles IP, copyright and media law cases. Sources indicate Ilyas Güclü from Koblenz-based Stark Legal represented the inventor before Frankfurt Higher Regional Court. The firm specialises in IT law, employment law and trademark law. (Co-author: Norbert Plützer)