Protecting IP Ownership and Rights in Germany: 6 Things Employers Need to Know
Hiring in Germany? There are many steps you need to take when you’re opening a new business or expanding your current one, especially if you’ll be branching into another country, like Germany. One of the most crucial is taking the proper precautions to protect your intellectual property (IP) rights.
Preserving your IP rights is already complex when you’re crossing borders. However, intellectual property in Germany is subject to the tenets of both German law and European laws, which makes IP rights a huge headache for the uninitiated. It’s crucial you don’t just skip over this topic, though. If you fail to protect yourself, your company could suffer financially as a result.
In this guide, we’ll explain how to protect your company's IP rights and ownership in Germany
Note: our guide is for informational purposes, and isn’t intended to provide legal advice.
1. In Germany, NDAs are legally enforceable
German courts have a history of upholding the terms of non-disclosure agreements, or NDAs. These legally binding contracts protect sensitive information, like trade secrets or product designs, and prohibit the signees from disclosing information without being subject to legal ramifications.
There are a few things to keep in mind when it comes to Germany and NDAs:
- Late last year, the Bundestag (the German federal parliament) passed the German Whistleblower Act, which protects whistleblowers from retaliation by their employers.
- If you’re discussing confidential information with someone who’s a potential business partner, some of it is automatically considered protected intellectual property by German law. The same is not true if you’re talking to an employee.
2. You’ll need to register with the European Union, too
If you only need to protect your intellectual property in Germany, the only agency you have to work with is the German Patent and Trademark Office, or the DPMA. However, if you go to another European country (even if they’re an EU member state, like Germany), your intellectual property rights won’t be protected once you cross the border.
To ensure you’re safe against IP infringement elsewhere in Europe, you’ll have to register with either the European Patent Office (if you’re applying for a patent) or the European Union Intellectual Property Office. If you need or want to expand further than Europe, register with the World Intellectual Property Organization (WIPO).
3. The DPMA offers five categories of intellectual property rights protection
The DPMA has five categories of intellectual property rights protection, and they’ve made it pretty easy to safeguard your trade secrets, trademarks, and so on.
The categories are as follows:
- Patents. If you’ve created a new technical process, machine, or some other type of novel, technical invention, apply for a patent. Once granted, they last for 20 years. And, even though the application process can take up to 18 months or longer, your intellectual property is automatically kept confidential during the first year and a half of the process.
- Utility models. These are similar to patents, but not everything that can be patented under German law can be registered as a utility model. Items in this category can only be new technical inventions, not processes. Utility model registrations are valid for 10 years.
- Trademarks. Certain words, logos, and any other qualities that represent your business can be registered as trademarks simply by filing the correct form with the Handelsregister. Once entered into the register, trademarks are valid for 10 years and can be renewed as many times as you want.
- Registered designs. Registered designs are all the visual hallmarks of your company and its products, like the patterns and colors of your packaging. Once they’ve been entered into the German Commercial Register, your registered designs are your intellectual property for the next 25 years.
- Topographies. This category refers specifically to 3D renderings of microelectronic semiconductor products, like cables. As long as the topography is entirely original and it hasn’t already been used for financial gain by somebody else, you can register it for 10 years.
4. If you want IP rights to something an employee created, you may have to pay them for it
German law features a unique bit of legislation called the German Employee Invention Act (ArbEG). Under this law, when an employee develops an invention while they’re under a contract of employment with you, they must tell you immediately. You’ll get exclusive rights to the service or product right away. If you decide you don’t want to use the service or product, the intellectual property rights will revert to the employee within four months. If you do claim IP rights, however, the employee—who is considered the inventor and, therefore, the original owner—is entitled to remuneration based on how much time has lapsed since you registered their creation.
5. You can receive intellectual property rights for certain things that aren’t registered
You don’t have to register each and every item or creation you or your company comes up with. The DPMA gives businesses a little window of time to use before their trademark, trade secrets, topographies, or utility models become public property. It classifies new creations as “unregistered community designs,” and yes, these are legally protected. Additionally, works of art, music, novels, movies, and similar items are automatically copyrighted. You don’t need to take any additional steps to protect yourself.
6. You have to localize IP ownership clauses and NDAs to Germany
If you and your employee or business partner live in two different countries, it’s crucial to decide: Should legal trouble arise, which nation would have jurisdiction over the case? A product that’s registered as a company’s intellectual property in Canada or the US isn’t automatically registered intellectual property in Germany, too. And, without knowing which body of legislation you’re specifically adhering to, courts can’t do a whole lot if someone does steal your IP rights. So, when you’re drawing up your IP ownership clause or drafting an NDA, make sure there’s a line in it that states which country you’ll defer to in the event of an issue.
Frequently asked questions about intellectual property law in Germany
Who owns IP in Germany: employee or employer?
The answer to this question isn’t straightforward. If an employee invents a new creation—whether it’s tangible or not—while working for you, you can claim exclusive rights if you give the employee a lump sum of money. If you don’t want to use what they created, within four months, the intellectual property rights will automatically revert back to the employee.
What is the penalty for IP infringement?
Intellectual property rights are taken extremely seriously by the German courts. In fact, copyright infringement can be considered a criminal act that’s punishable by up to five years in prison if the person is using your IP for commercial gain. Violators of German IP law will also have to pay fines.
How do I get my creation listed on the Handelsregister?
To be entered into the German Commercial Register, you need to make an appointment with a notary and bring the following with you:
- A notarized memorandum and either a sample of the protocol or the articles of the association, as well as the name of the person who’s been appointed the “managing director”
- Official permits for the product or service
- A list of your shareholders
- Either the deposit slip or bank statement to prove you were financially involved in the creation process OR supporting documents if the creation is part of an in-kind formation
Once you get these documents notarized and go through the interview process, the notary will submit your application to the German Commercial Register for you.
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Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
