Open Innovation: Legal Hurdles in the Creation of Contractual Arrangements Governing Idea Competitions?

The phenomenon of Open Innovation has been gaining prominence over the last decade. Idea competitions have been used in a variety of industrial sectors. Nevertheless, the legal issues raised by this topic have not been broadly addressed, yet. These arise from the adverse interests of the actors. The company which organizes an idea competition would usually like to have the opportunity to comprehensively use the solutions, ideas or products submitted by the competition entrants. For the company it is important to obtain all intellectual property rights in the idea, in the product created as a result and, thus, in the rights to be exploited in the future, in particular, patents, utility models, trademarks, copyrights and registered designs as well as other industrial property rights. The participant would like to participate to the greatest extent possible in the success of the submitted solution. This affects, firstly, the question of fair remuneration or further participation in any profits earned as well as, secondly, any personal rights such as being named as inventor or author. The article aims to show the contractual difficulties which have to be addressed tailoring theterms of an idea competition under German law.

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by Julius H. Greenstone

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