Generally speaking, yes you will have to pay a reservation fee, even if you are sitting up. Of course, some sort of sleeping accommodations will also cost you more, and, as a passholder, you may find there are no reservations for passholders left when you go to the station....many rail companies are limiting them.
Do some research on your planned itinerary to see what trains are available. With many high-speed services now in place, the number of overnight trains has dwindled considerably. You can check most European routes at the German rail website, bahn.de
(Edit) You should also be forewarned that these overnight trains are extremely popular, and sell out weeks, even months, in advance, especially during the high tourist season.