Munich Innovation Group is a leading service provider for patent monetization and
IP advisory services.
Employee’s Rights for Inventor Compensation
Inventor compensation is an important aspect for many inventors since most of the inventions are made by employees of companies produced within the scope of their work. Whether the inventors are able to benefit financially from their idea depends on the country the company is located and the signed employment agreement between the inventor and the employer. In fact, most of these contracts contain an agreement in which the invention and all its rights belong to the employer. Still, in many countries employee inventors have more rights than they might think.
Different Legal Situations
All over the world, employees have different rights in regard of the compensation of their inventions. Moreover there is a high degree of uncertainty about it. Even if the rights for compensations are in force, the monetary amount often stays unpredictable or the employer tries to reduce it to a minimum. While some countries already introduced the right for compensation decades ago, others still have no statutory rules regarding employee inventions. Therefore it is not always easy for employee inventors to make sure to receive the compensation they deserve. Especially in small and medium enterprises there are often no internal inventor compensation regulations.
Claiming ones rights against the own employer is often a tricky situation and hence it can be helpful to get professional support.
While in certain industries such as electronics, chemicals, pharmaceuticals, and biotechnology inventor compensations are more common, remuneration in other industries such as consumer products or general manufacturing is still lagging behind.
How can an employee benefit from the invention?
First of all, not all inventions of employees automatically belong to the employer. In the case that it was invented outside the scope of work, the invention often belongs to the employee only. On the other hand even if the invention was made in the scope of work, the company can decide to offer the patent to the inventor in case of disinterest.
Moreover, the calculation of the compensation an inventor is entitled to varies from country to country. The important aspect in most of the cases is the economic value of the invention. This often starts with a quantification of the employer’s benefit. This calculation can e.g. be based on the patent’s profitability including future profits that have to be expected. This approach refers to the amount of the total profit that would have not been earned if the inventor has not had this idea for the patent. Other approaches are to reward the inventor with royalties on a percentage basis. Even fix monetary amounts in the stage of filed patent application are not uncommon to be used as inventor compensations.
How can Munich Innovation Group support employee inventors?
Due to our experience, contacts, and know-how, Munich Innovation is able to negotiate appropriate inventor compensation together with experienced patent attorneys from employers that are not willing to compensate their employees according to the law. If you as an inventor believe that this may be the case with your invention, do not hesitate to contact us.
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