Employees' Inventions and University Inventions

On May 18, 2015, the Israeli branch of LESI held an event on Employees' Inventions and University Inventions In Israel and Germany at the offices of the Israeli Bar Association in Tel Aviv. About 40-50 people attended. Most of the people appear to be regulars who know each other very well, so mingling opportunities were very limited. The lectures were excellent, full of valuable, useful and interesting information on a very high level.

The first lecture was by Prof. Dr. Heinz Goddar of Boehmert & Boehmert. He apologized profusely for arriving late – he was stuck in Tel Aviv traffic! I could only sympathize.

After he noted his very impressive credentials, he described what is often called “the German Problem”! This is the pro-inventor legal framework in Germany and Austria. Under the German Act on Employee’s Inventions, service inventions made by employees first of all belong to them, and only by a special act and against a special remuneration can they become the property of the employer. The employee is entitled to get a fair share of the commercial benefit reaped by the employer. There are 300 pages of guidelines which detail what this fair share is in various different situations. It should be noted that this law covers service inventions only which means inventions which either originate from the regular work of the employee and technical inventions only i.e. inventions that can be protected under a patent or utility model under German Law. This regulatory framework is mandatory and cannot be waived by contract.

The second lecture, by Gil Granot, Adv. of Yeda, was also very interesting. He gave a good summary of the issues encountered in Israel when negotiating with regard to inventions made in the framework of an academic institution and services provided by academic institutions. I found the comparison between the various cooperation situations (service, sponsored research and research cooperation) of particular interest.

Eran Bareket of Gilat Bareket and Co. (a member of the Reinhold Cohn group) reviewed the issue of ownership of service inventions and the interplay between the two conditions – ‘during the term of employment’ and ‘in consequence of employment’. He gave a comprehensive review of the relevant case law, which with I, as an Israeli lawyer in the Hi-tech field, am all too familiar with but, I have to thank Adv. Bareket for giving us the benefit of his experience and insight and thereby clarifying certain things and pointing out certain subtleties that I might not have given enough weight too.

The final lecture was given by Tal Band of S. Horowitz & Co.who discussed compensation for employee inventions under Israel law and in particular Barazani vs. Iscar. This is a hot-button issue in Israel of the last few years with a lot of uncertainty surrounding this issue due to the decisions in Actelis v. Ilani (who was actually present at this lecture), and Bayer v. Plurality Ltd. The recent decisions of the Committee for Compensation and Severance in the Barazan v. Iscar case, rejecting Barazani’s claim for compensation based primarily on the waiver of claims he signed when he left Iscar’s employ, has reduced the uncertainty somewhat by holding amongst others that the right to compensation is waivable and need not neccesarily be explicit He also illustrated (with a true story) the blatantly unfair situation of a joint inventions where the professor arrived at the invention s in his capacity as a university employee and was entitled to consideration while his students, arrived at the inventions in their capacity as hi-tech company employees and were not entitled to any compensation (other than their salary) for their share of the self-same invention. In the end the parties reached a settlement.

To summarize - a very useful and interesting event with 4 excellent lectures by 4 experts in the field!


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