Exhaustion of patent rights among patent co-owners

If a Community employee invention protection law is initially in intermediate products of suppliers, does this lead to Exhaustion of patent rights among? No, because patent rights are only exhausted when a patented product is put on the market: interesting for all industries with intermediate products as well as the automotive industry.

The fact that one co-owner of a patent supplies the other co-owners of a patent with objects that are in accordance with the invention is not so rare in practice. For example, in the automotive industry, a joint employee invention protection right is first used in intermediate products of the (automotive) supplier and then in end products of the (automotive) manufacturer. The same happens in other industrial sectors.

Exhaustion of patent rights among co-owners

This makes the question of the exhaustion of patent rights among co-owners all the more important. To this end, the Arbitration Board of the DPMA affected an unofficial leading decision. Only if the patent holder has put a patented product on the market compared to a non-patent holder, the patent right will be exhausted, was the decision of the arbitration board in April 2012 (Arb.Erf. 23/10). However, as long as the co-owner of the patent merely supplies the other co-owner of the patent with objects which are in accordance with the invention, no exhaustion of the patent right can occur.

In concrete terms for the automotive industry, this means that employees of the supplied (automotive) manufacturer are entitled to an inventor’s compensation if a joint service invention protection right is first used in intermediate products of the (automotive) supplier and then in end products of the (automotive) manufacturer.

Incidentally, the claim for compensation for an employee invention expires after three years, the claim for damages (also with respect to a service invention and its compensation) after 10 years.

Exhaustion of the patent right

Decades ago, the German Federal Supreme Court of Justice (BGH GRUR 73, 518, 520 – Spielautomat II; BGH GRUR 59, 232, 233- Förderrinne) also expressed its opinion on the exhaustion of patent rights.

According to this, a patent holder may

use the invention itself,
for a consideration (license fee), transfer this right to another person or distribute it among several other persons (Sec. 15 PatG) and
sell the patent.

However, the patent right is exhausted if the patent holder or – with his consent – another person has put the patent object into circulation.

Intended use and new production?

It is difficult to distinguish between the distinction between the intended use of a patented product and its permissible repair and an inadmissible new manufacture of the product. This applies all the more if the function or performance of the specific product is impaired in whole or in part by wear and tear, damage or for other reasons. Relevant for this distinction is whether the parts in question are individualized parts with regard to their inventive function.

Employee invention in a module

And also with regard to a employee invention in a module with several elements, decisions of the arbitration board are available. If an invention relates to a mechanism within a module containing several elements, then only the new elements in accordance with the invention are relevant as a technical-economic reference value for the inventive value. On the other hand, the elements still contained in the module apart from the mechanism are not relevant for the inventive step if they are known in the sense of the technical teaching of the invention – even if these elements are functionally necessary for the module.

Questions about employee inventions?

Our patent law firm has extensive expertise in the field of patent law and the law governing employee inventions. We will gladly represent your interests both before the arbitration board and in court proceedings, both in Germany and internationally. If you are interested, please contact us – we look forward to