Inventions and ideas for products, processes or services are irreplaceable capital for any company, both start-ups and existing companies. Anyone who has anything special to offer has a considerable competitive advantage over their rivals.
You can protect this competitive advantage: with property rights. There are several types of protection for processes, products or even services: patents, utility models, trademarks, designs.
Companies register property rights for the German market with the German Patent and Trademarks Office (DPMA). The European Intellectual Property Office (EUIPO) in Alicante is responsible for the protection of trademarks and designs across the whole of Europe.
Advantages: Exclusive usage rights
A property right grants its holder a sort of monopoly: the ability to have sole control over their product or process idea for a specified period of time. Anyone who infringes property rights (i.e. who steals intellectual property), must, if punished, immediately cease any further infringement of the property right and may be required to pay considerable compensation. They must also reveal to whom they have sold the product in question, for example. Revealing their customers.
Disadvantages: Costs and revealing the idea
Costs are incurred when registering property rights: registration and annual fees and, possibly costs for a patent lawyer. Added to this is the time needed to prepare the registration and announcing the innovation to the public. Patents must be published after 18 months. Further development is due by then at the latest - because the “trade secret” is now public - to get ahead of rivals’ attempts to circumvent it.
The rule of thumb for registration is: as early as possible. Waiting to register a property right is very risky. Even if the commercial and company law framework for a start-up is not in place at an early stage, the inventor should register their development or invention in their own name. Once the patent has been granted, they can at least prove their technical skills to banks and partners.
To whom do property rights belong?
Ideas that are worthy of protection often come about as part of a working relationship in a company or research institute (= employee invention). In principle, employees have no right to have a patent or utility model transferred to them.
They must first report their invention to their employer in writing (email is also possible) and give them the opportunity to use the invention themselves. If the employer releases an invention, the “inventor” may make free use of it.
If the employer does not release an invention by the end of four months after receiving the report, it is assumed that they will be using use the invention themselves. But the employee is entitled to employee invention compensation.