On April 9, 2014, the Supreme Court issued a decision in a case brought by an employee against his employer where he sought the payment of a fair premium for an invention he created during his employment relationship.

Under Italian law, employees’ inventions are regulated under article 64 of Legislative Decree no. 30 of 2005 (hereinafter, in short, "CPI"). Said rule is primarily aimed at defining the ownership status of said inventions. The allocation of rights between the employer and the employee depends mainly on two circumstances: i) if the inventive activity falls within employees’ tasks; and ii) if the employee receives a compensation for such inventive activity.

Where the invention is conceived in the performance of the employees’ tasks but no specific compensation is provided for said creative activity, the invention belongs to the employer but the employee is entitled to a fair premium. The quantification of such fair premium shall be made taking into account a variety of factors such as: the importance of the invention, the tasks performed and the compensation received by the worker, as well the contribution given by the organization of the employer in achieving the invention.

In the case at stake, the Supreme Court stated that the quantification of the fair premium can be made basing on the so- called “German formula”. According to this formula, the amount of the fair premium is calculated by multiplying the value of the invention to a proportional amount calculated on the basis of i) the contribution of the employee to the achievement of the invention; ii) the contribution given by the employer; and iii) the remuneration and tasks of the employee.

In this regard, the Supreme Court clarified that the economic value of the invention can also be inferred from the profits expected by the employer.