One of the more esoteric aspects of IP finance is the need to pay extra compensation for inventors in many countries. Whereas some countries consider that an inventor is adequately compensated by his salary when she or he makes an invention, others, like the UK, adopt a position that extra compensation is payable if the invention is somehow (see sections 40 and 41 of the 1977 UK Patent Act).
Germany’s body of law is probably the most comprehensive anywhere. Every inventor is entitled to some level of compensation depending on the use made of the invention. There’s a seperate Act of the Bundestag devoted to claiming rights to the invention, the requirement to keep the inventors involved in the prosecution of the application as well as on compensating the inventors. The Ministry of Labour has also issued a series of Guidlines on how to calculate the level of compensation.
Many inventors dream of fortunes to be made. And earlier in his career, this blogger used to regularly deal with inventors who came to his office expecting a massive salary boost. Several hours of calucation later, they were often politely informed that the amount due was a couple of hundred D-Marks.
Occasionaly some inventors struck it big and Reuters has a great story about a former Volkswagen manager Wolfgang Schreiber (former Bentley/Bugatti head) who is now looking for EUR 20 Million in compensation for use of his invention of the dual clutch gear box. Rumours abound from time to time about large claims being made. Few ever come to court as employees are required to use the arbitration service of the German Patent and Trade Mark Office initially. It’s not clear whether he will get the claimed level of compensation. It’s going to probably depend on the value of the invention actually incorporated into millions of Volkswagen cars. Given that most inventions build on existing ideas and that cars incorporate ideas from hundreds of patents, Volkswagen will probably have a different idea of the value than the inventor.
It is of course an idea quite contrary to the idea of intellectual property, but well-embedded in the droit d'auteur mindset (see the leaked Directive on the DSM). By the same token, the larger number of inventors, authors and performers who are overpaid on the faith of their promising ideas should repay their investors, whatever it says in the original contract.
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