If you’re an engineer, you were probably hired to
invent. That means that even if you come up with
something that brings in heaps of money for your
employer, you are owed nothing beyond your regular
paycheck.
That puts you on different ground from that of
accountants, truck drivers, and other people who were
not hired to invent—they get to keep their patent
rights. Even if they did their inventing on the job,
using company resources, all the company gets is a “shop
right” to use the patented invention without paying a
royalty fee.
The courts haven’t been all that clear on what “hired
to invent” means, and therefore most companies require
all new employees to sign a contract handing rights to
any future inventions to the company. Your company might
even require that you assign to it any patentable ideas
you may have within a year after termination to dissuade
you from quitting your job to perfect an invention that
you’d conceived earlier, on company time.
Of course, employers can, if they want, renounce some
of their rights in your patents. Universities have
generally found it worth their while to let professors
(and sometimes even grad students) share in the proceeds
of their intellectual endeavors. MIT, for example, gives
its professor inventors a third of all the revenue
coming from their patented inventions.
Why are universities more generous than companies?
One view is that engineers employed at companies are
more highly compensated than academics (and compensated
for a job that specifically involves inventing), whereas
professors are hired to educate, publish, and conduct
research for publication. The resulting disclosures can
make it a pain to get a patent.
Publications can themselves pass into the possession
of the employer if writing is part of the employee’s
job. In this respect, copyright law mirrors patent law.
Some companies also go beyond what the law requires
to reward their engineers. In 2004, a survey by the
Intellectual Property Owners Association in Washington,
D.C., found that 61 percent of the responding companies
paid their employees US $1000 to $3000 upon the filing
of a patent application, and 37 percent paid from $1000
to $2000 upon the issuance of a patent. If all you got was a plaque,
you can use these findings as ammunition the next time
you talk to your boss!
You can also relocate to a country where the law
leans more toward the inventor. In the United Kingdom,
for example, the employee inventor must be compensated
when the invention is of “outstanding benefit” to the
employer. Germany has a similar law, but without the
proviso; alas, the amount of the compensation depends on
the employee’s salary, whether or not he was hired to
invent, and a lot of subjective factors.
But don’t pack your bags just yet, because the odds
of meaningful compensation are against you. In a 2006
study of 1983 German employees, only 18 received more
than their usual income because their companies had paid
them for inventing something.
Monetary incentives to invent sometimes have perverse
results. They may encourage employees to file so many
patents that their companies’ legal departments (and
legal budgets) can’t keep up with the work. The
companies may then respond by capping the number of
patents employees can file.
Employees can also get into nasty disputes over who
invented what. Two engineers may conceive of a new idea
for a product, and then several other engineers and a
manager or two may assert they also had a hand in it. In
these cases, a patent attorney may have to intervene. I
have even had engineers fight over whose name was to be
listed first on the patent.
Companies can avoid a lot of problems by making the
disclosure process as simple as possible—for instance,
by running seminars that show employees how to spot
patentable innovations and how to document work on them.
Here are a few tips:
-
Have an attorney attend regular meetings
to review project design and capture
patentable ideas. This will both assure full
disclosure and free up engineers’ time.
-
Have patent attorneys conduct
walkabouts—visits to teams of engineers
working on specific projects. The idea is to
get them talking about their innovations,
improvements, and ideas.
-
Invite engineers to lunches to introduce
them to patents and talk about new ideas.
Include a lecture by a patent attorney about
patent basics, patent law, or perhaps a case
that’s in the news.
None of these considerations will mollify the engineer
whose invention brings in billions for his company but
only beans for himself—maybe just a $1000 check and a
brief mention at the corporate retreat. Of course, you
can try to wring out more money by taking your employer
to court, but that is an all-or-nothing strategy: if you
win the case, you get a lot of money, but if you lose
it, you may lose your job as well.
When employees do win big, it’s typically because
they demonstrated some violation of a company policy or
contract. For example, in April, a retired chief
researcher at Sharp filed a suit against that company,
citing its policy of providing “reasonable compensation”
to inventors, He asserted that his contribution to
inventions that improved both the speed and energy
consumption of Sharp’s LCD monitor was worth $4.6
million. This Japanese case settled in April for an
undisclosed amount.
You can take heart in knowing that despite all these
problems, invention can still do wonders for your
career. According to that 2004 company survey, engineers
whose inventions contributed above and beyond the call
of duty reported receiving larger monetary awards, stock
options, and, of course, promotions.