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Employee Patent Compensations?
Anonymous Coward asks: "My employer has recently filed a patent application for something I invented. As compensation I am being given the statutory $1 for the assignment and a shiny brass plaque if the patent(s) is awarded. Is this typical for North American companies? I did sign a no compensation and automatic assignment type employment contract and while I was willing to accept that technically, I'm owed nothing, this strikes me as cheap, greedy, and backward thinking on my employers part. I've Google'd and read and this action seems archaic, am I wrong and just full of myself? Your thoughts please!"
My thoughts are that the Anonymous Coward link shouldn't have an email address if Bill Keegan wants to remain anonymous!
...if the patent proves valuable, and they don't feel the need to compensate you directly, you should be viewed as an exceptionally good catch for some other company.
Why would they give you more than the minimum required, if you agreed to that minimum? Does it gain them anything? Are you honestly going to work less now because they didn't give you an unnecessary bonus?
(Disregard the above if your company is non-for-profit, employee-owned, or determined to get sued by stockholders.)
I've had this sig for three days.
My company pays up to $2500 or so per inventor named on the patent, up to 3 inventors. If there are more than three, then they take the max 7.5k and divide it equally.
:)
Just a number. Doesn't mean I'd be any richer than you, after paying taxes and all, but at least I can buy my own shiny new plaque.
I think the usual practice in america is more like a couple thousand dollars and a shiny brass plaque.
I wouldn't lose sleep over the bonus. Instead, remember to mention your patent at your next performance review. Even if you don't get a bonus from it directly it may be a useful bargaining chip for future compensation.
you luck bastard. all i got was a pile of stock options.
Hi, I'm Darl McBride. And here at SCO, we Think Different (tm).
by definition, you are a wage slave unless you are an owner. How do you think the upper class got so rich, it certainly wasn't by doing the work themselves. Furthermore, if democracy is so grand, why aren't companies democratic? As well, if this is a republic, why don't we own our workplaces. Face it, we've been bent over and ripped off. It's our own fault for not seeking self employment. Yup, no wonder the middle class is dying off, it's too stupid to survive.
"My employer has recently filed a patent application for something I invented."
And yet you still left out something very important - you invented it on company time (or even used a little bit of company time) and you've been on the payroll since before concieved of the invention, and , in fact, you were employed in order to benefit the company - including anything you invent while working for the company.
You have been paid for, are being paid for, and will likely continue to be paid for the invention - it's called a salary or paycheck.
I'm sorry if you didn't understand the terms of your employment.
Besides, you can get the answer to your question from Google, which will show you that it's a fairly commonly asked question
As far as what is typical in the industry - typically the inventor gets nothing but name recognition. If the invention makes the company a million, they tend to treat you better, but it still shows as zip on your paycheck (except your raises may be slightly higher than usual for awhile)
You might be able to work something out if you are a contractor and can show that you developed the invention for general use in your contracting business, and not for this specific client, but then you get to be the cost bearer of obtaining the patent, and likely (as with the vast majority of inventions) you will never recoup those costs.
It's better to put the invention down on your resume, and work it from the angle of, "I can do good things for your company" rather than trying to say with your current employer, "Hey, where's my piece of the pie?". Likely your piece of the pie will be somewhere outside the office very shortly thereafter.
-Adam
It's a standard part of US employment law that if you are indeed an employee rather than an independent contractor that any intellecual property that you generate does in fact belong lock stock and barrel to your employer. They don't even owe you the shiny dollar.
Some companies are more generous, offering a few shares of stock or whatever.
I know in Europe you have a somewhat better situation, especially if the invention is worth a LOT of money in the long run, but how far that goes I don't know.
I never thought it was a big deal in my job - generating these things was what I was being paid for, and in reality very few patents ever turn out to be commercially valuable anyway.
At least, not until the word, "verb," got verbed...
sorry, i had to...
sol
"I'd say 'Have a good time,' but arson is still illegal.
- The only things you get to vote for as a shareholder are the directors and shareholder initiatives;
- Top management chooses the slate of directors and has great power to hold initiatives off the proxy ballot;
- No matter how many shareholders strike a director off the proxy ballot, that director is still elected if s/he gets so much as a single vote. The only way for shareholders to get rid of a director is to wage a proxy fight, which involves printing and mailing their own proxies to shareholders. This is a very expensive proposal. Worse,
- Shareholder initiatives are binding on no one, and the board and management are free to ignore them.
In theory, company management is responsible to shareholders. In practice, they are rarely responsible to anyone but themselves. (This message was brought to you nearly verbatim from that bastion of left-wing radical political theory, the editorial page of the Wall Street Journal.)Time is Nature's way of keeping everything from happening at once... the bitch.
A client of mine, was a former Pratt & Whitney rocket scientist. He invented control systems and fuel systems for around a dozen rockets/engines, and has about 5 patents to his credit -- all for his employer.
He's got plaques to prove it, but that's about it. And he seemed pretty damn proud to have those, and loved explaining when I asked about them.
*Shrug* Was pretty cool to me...they don't *have* to give you anything.
His patent was for semi-anonymity.
Bonuses and profit sharing are all a big scam for top executives to siphen more money out of the trough. Just ask for a raise at your next performance review and chances are you'll get it. The bonus route is stupid; I'd way rather get a steady amount of loot I can count on then drips and draps of bonuses any day.
I think the author understands very well the terms of his employment. I thin his main beef is that HE has gone out of his way to do somethins a little special for the company, so why isn't the company willing to do the same in return? After all if this invention is important enough to patent, one would think that keeping him on at the company would be very important. If the company is showing him no loyalty and appreciation, it'll be VERY easy for him to jump on to the competitor's payroll when they come a calling.
I get $50 for the disclosure, and $2000 if the filing is accepted. The bonus is $4000 if the patent is in a "targeted" area.
I'm going to start disclosing a whole bunch of obvious stuff. Not that I necessarily want them patented, but just so our company has a legal record of their being implemented or used. I still can't get over Phillips being granted a patent for something my company had shipped five years prior to their filing. Our solution to the problem was to roll over and cross license our own stuff.
Don't blame me, I didn't vote for either of them!
Way to be a total asshole of an employer.
Where I work, it's made pretty clear that contractors aren't real people. Nowhere is this more evident than the patent-compensation system. 'Real' employees get a $2,500 bonus. After 5 patents, I believe it's a $10,000 bonus. Not bad. Contractors get NOTHING. Not even a plaque. A guy who works in the same lab as I do has his name on 3 patents, and he has never gotten any recognition whatsoever.
So... don't expect anything for a patent unless you have an agreement guaranteeing compensation. Companies don't give a crap about their employees anymore, and just want to use you up until they can find an Indian/Philipino to replace you for 1/5 the cost.
Keep in mind they're paying the fees associated with the filing and maintanence of the patent.
Typically the company I worked for would not award anything for a patent application but, should the patent be awarded there would be compensation depending on the marketability of said patent. Considering you got a dollar and a plaque you should be happy.
TT
IBM's invention policy is:
first patent: $1500 when it's filed, another $500 if the patent is awarded
any patents after that: $750, +$500 if patent awarded.
Every 4 patents you hit a "plateau" and get a bonus $1250 or so on top of everything else.
From the posts in this forum, sounds like that's actually a pretty nice system.
My employer, a very large (tens of thousands of employees) consulting firm, has what I believe to be a very good policy towards patents and intellectual property in general. Basically, if a patent or other intellectual property item can be applied to the company's business (largely IT and business/management consulting), then the company owns it. So, my employer does nothing along the lines of designing rocket engines, so if I invent a better one, the idea and patent are mine to keep. If I invent some sort of web technology that they might use in client engagements, they own it.
In the drug industry there are now certain states that mandate employes of universities and drug companies get a wee percentage of the profits from any drug they find, even if it's on the employer's nickel. If I remember right this got started when the guy who found Prozac got virtually no compensation except for some additional job security and maybe a bonus. Two percent may not sound like much, but two percent of, say, $240 million will almost send three kids to a private four-year college. Heck, even two percent of $1.5 million is not something to be thrown in the trash.
As long as there is a Second Amendment, there will always be a First Amendment.
I have never seen anyone get any money worth worrying about. At SGI. a buddy got a really nice leather jacket. I've also seen stock grants, stock options. Some time off. It helps you get the next big project you want if you can predict the possibility of more IP. Remember, half the time, the IP is used to either prevent competition, or used as a trading card. By trading card I mean one company is given the right to use your patent in exchange for the use of one of theirs. The best advise is to develop your ideas on your own. i.er your own computer, your own software, your own time. Don't even use the companies email for correspond with your co-inventors, confidants. Also, make sure the patent cannot be derived from work you are doing at work. Then start your own company around the patent if possible. Then you get to hopefully make money on your idea. Intellectual property is the big companies way of preventing competition.
I agree this is the current state of affairs. I also agreed in non-compete, non-disclosure, and signing my IP over to them when I started my job. So yes, I'm getting paid and in return they take my IP from me.
But is this the way it should work? I'd say (judging from what I've read, and the comments here) that it's pretty common. Is this the best thing for all parties involved? I'm not talking about a "Do they work that way now?" or even a "What can we change?" point of view. The first has been answered and the second is too complicated. But If we had to do it over again, is this what we would choose? If not, what are the alternatives?
I say "we" meaning from both the company's point of view and the employee. How do we balance the rights of the employee with the company's need to make money and survive? Is there a better balance than mandatory IP surrendering?
It all depends on your employment contract. Like other benefits they differ from company to company and in this climate they're getting stingier.
Cisco granted money upon filing, money upon grant, provided you were still with the company when it gets granted. Ditto for the plaque as well, I think.
"You might as well get your son a ticket to hell as give him a five string banjo." -unknown minister
but that's the best damn troll I've
ever read.
Peace & Blessings,
bmac
For my two patent applications for inventions I created while working for a company associated with the size "Big" and the colour "Blue", which they've filed in two countries, I was permently laid off.
The unnamed company in question had (at the time at least) a policy where inventors were awarded $2500 US for each successful patent. When I was "surplussed", they decided not to pay up. After making a fuss, they finally decided to pay me $1500 US for both (that is, $1500 US in total).
So count yourself lucky, even if it is $1 -- you still have your job!
Yaz.
When I was working at TI as an electronics design engineer I created an invention and received a patent for it. I got a $1 bill and plaque too, not much else. They used the FLIR optical scanning technology in my patent to make millions and all I got was to keep my job (which I soon after abandoned).
My advice is to keep your great ideas to yourself. Why give them away to make the managers above you more money and you get punked? You can't develop or patent the idea yourself because of the contract you have signed, however, nothing prevents you from keeping silent. Hey start an open source project around it if you can without giving away any company secrets.
I too have received the obligatory 1 dollar for a patent I helped develop. Consider that under law you did the work for them when you created the invention. Doesn't it make some sense that the invention is rightly owned by the corporation?
Further, did you pay the 10K to 20K dollars to file the patent? Yeah - the patent itself doesn't cost that much (more like $2k I think) but the lawyers that wrote it did.
So - what did you have on the line versus the company. You received your normal compensation and the company through in say another $10K on top of your compensation to receive the patent. Seems to me they have a moral right to it too!
Now - if you did something on your own dime, and the company tried claiming that as well - this is another discussion all together. That doesn't seem to be the case in the initial query though. I happen to live in CA - with all it's OTHER faults (and there are so so many) CA does have a law on the books since around 1980 that if I develop the idea on my own time with my own resources, then NDA or not, I own it.
That's my two cents worth.
Have you compiled your kernel today??
Does the legal concept of moral rights - ie, (as I understand it) acknowledgement of creatorship, if not legal ownership of an item - extend to inventions?
AFAIK moral rights have been introduced (via legislation) for creative works such as books, paintings or screenplays, but I don't know about non-creative works.
a world in progress...
I consulted for a large company once, which has/gets lots of patents.
Every year they have a fancy sit down dinner for the patent holders, with the presentation of the awards for that years patent awards.
Other than that, I'd say recognition should be in the form of the paycheck.
Im a asuming the patent has been applied for and granted in your name ?
If you already assigned the patent to the company, you are in a weak position, and are relying on the companies good will, the best you can hope for is raising it at your annual review like you would any acheivement.
If you have not made the assignment you find your self in a good position of negotiating with the company from a position of strength. DO NOT sign over the rights to the patent. Consult a patent agent/lawyer.
You can negotiate, ask for a fair offer. Find out or estimate the revenue or savings made and know the patents value to the company. You are entitled to a share of this.
Consider the cost of exploiting the patent, if this is huge, expect a smaller percentage, 2% or less; if the cost of exploiting the patent is low, i.e. licensing the patent to others, expect a much larger share, 20% or more.
If the company has applied for the patent in somebody else name, and you also have problems, you can negotiate but the hammer is that you can break the patent, you need evidence to support it as your patent and this can easily be very expensive legal problems, consult a patent agent/lawyer.
I have to disagree a little. On point 3: Board members in all companyes I hold stock in must have a majority of votes, so if 50% of share holders vote against a director, that director will not serve on the board. It is a definate problem that shareholder proposals for directors do not get on the main ballot for most companies, but I know of exceptions to that rule. (A co-op I belong to is proposeing to change to entirely self-nominated canidates, already anyone who wants it is put on the ballot)
As for point 2: there are procedures to get something on the ballot, I've seen them followed, and then companies can do nothing to hold them off the ballot. They will recomeend against voting for it, but that is not the same thing. The one time I saw such a thing happen, at the shareholders meeting the company supplied (in the form of a high ranking employee) someone to second the motion because the initiator of the item couldn't find someone at the metting to second it. (It failed to pass, but got 35%. While I agree with the idea behind the proposeal, I disagreed with critical details so I voted against it)
If a company wants to enhance its value a few inventions and patents can be much more worth while that years of hard work. In todays market IP can be very valuable many companies like Rambus and Qualcomm, while they have products exist mostly as patent holders and receive much of their income/market cap from their patent portfolio. The writer doesn't discuss what type of invention he made, it maybe worthless in the market or it could be worth huge piles-o-cash. I the company gave $2000 or something like that they would get more patents (I know there is a legal cost involved with filing a patent, which should gate which patents get pursued) they have more chances at hitting the big one and the company doing well. I know the econcomy is down (beleive me, I know) but taking advantage or the appearance of taking advantage of their employees creates a lot of bad feelings, people put in less effort and bail as soon as another job presents itself. As the only saying goes "penny wise dollar foolish" treat people well and they will treat you well.
Where I work, it's $1000 per co-inventor on filing and $1000 when it issues. If there are more than 4 co-inventors they split $4000.
But no shiny plaque. ;-)
ACIBM would give you $1500 for the first. Then they start dolling out stock and stock options for subsequent ones. If you score 3 you're all but made a senior; making senior can take 20 years at IBM, it's a big thing, if you chalk up a nice set of patents then you get a promo a year until you're senior, typically.
At 5 they have a club. They give you a folder and you're a member of the super elite club. I don't recall them ever having meetings or anything like that. I think the best part is the chairman probably has read your name on a sheet of paper at that point. The folder I was given for the club was sub standard, they pretty much had photocopies of the actual patent description forms.
Beyond that I think it starts getting even more lame, less and less money per patent. By that point you've probably established a pretty firm footing within the company whatever you're goals there maybe. You could be an executive in the management path or you can be as senior as anyone there on the technical path. It's kind of easy by that point too, you see in IBM half the battle is dealing with the lawyers and following up on everything and filling out all of the paperwork. By the time you make 5 you can pretty much stamp them out, at some point along the ways legal takes you a bit more seriously too, the first is hard but once you get that they assume (rightly or wrongly) that you're more likely to get another so they are willing to do the search.
Now I know of a very letitigious mid sized company that routinely involves itself in lawsuits regarding patents. (They sell TV) They encourage patents by rewarding their corporate IP lawyer with money and vacations (a particulaly swarthy guy) and they give the engineers in question a pat on the back at a team meeting and a plaque. It created a very entertaining encounter once where he was trying to mine patents from me which I refused to explain until he anted up something. The bastard didn't seem to understand that I wanted some money or something, like he would get, for the idea. He just didn't get it. He would make quarterly rounds asking people for ideas and such, going office to office. We had that exchange twice before he understood.
Honestly, I love Linux and opensource. I'm not in favor of some patents but I don't really mind them that much. The holder is well within their rights to make patents implementable in GPLed code. I also completely respect IP and the patent process, in spirit. If my company doesn't pay me for it, I'm not helping them get a patent, very simply. I'm not sure what's fair but in today's world if a company doesn't believe in patents they will eventually run in to trouble and if they want to avoid that they should reward their employees for it. I wouldn't accept less than $1000; I also wouldn't take options instead of cash, straight stock is okay but nothing that is worthless.
I've been at both Sun and HP, and both have better plans than that. There have multi-stage payouts. First, you get paid for the "invention disclosure" to the company. Next, you get paid when the patent is filed, if the company approves it. Lastly, you get paid when the patent is granted, and the company will throw in the plaque.
At Sun, I think it was $250/$500/$1000 when I was there, and at HP it's $175/$875/$1750. Nothing like the $1 foolishness you have.
It's not about any particular patent, but the number of patents in the company portfolio. The company wants to encourage its employees to disclose patentable inventions (so it pays for disclosures). The nice thing is that the company will also pay for the patent lawyers but you will still get credit as the Inventor (IN), though the company will be the Assignee (AN).
In any case, smart companies stand to make (or save) a whole lot of money by building their patent portfolio, so they reward their employees for helping to make that happen. Token amounts to the employer, but a nice chunk of change to the employee. $1 to fulfill some statutory obligation is ridiculous.
In practice I've never personally never gotten anything from patent applications. One company I worked for filed an application listing my boss and the company CEO as the inventors, for work that I did. I found out about that years after I left the company and was a little bit ticked off, but really, they paid me quite handsomely (at least by my standards at the time) for doing the work, so I can't claim to have been ripped off in the usual sense. I think they knew of my opposition to software patents and were concerned that I would have opposed an application if I knew about it. (I would have recognized the necessity of applying--I don't think the government should issue patents on software to anyone, but I don't believe in unilateral disarmament against competitors who are filing them anyway). Also, I may have been gone from that company by the time they filed the application.
Another company I was at had a semi-official policy of paying bonuses for patents, and I had to file a couple applications, but I think the bonuses fell through the cracks at application time and the company was gone (dotcom casualty) by the time the patent actually issued. However, again, the bonuses involved would have been fairly small potatoes compared to what my salary already was, so not getting it was no big deal.
Of course that just leads to people focusing on $1k bonuses instead of getting their work done. Doesn't matter if it's something that might make our company money eventually or not...
If you came up with the idea on the job, and suggested it to them, they can use it. Same goes if you signed an agreement saying they can use any other ideas of yours. Them patenting it just means they really like your ideas, since it costs so much to get a patent. Maybe it'll help you get future pay raises. If not, you can mention on your resume that some of your ideas have been patented.
I for one despise patents, mainly the fact that they can prevent you from using an idea, or punish you after the fact, even if you came up with the idea entirely on your own. Protecting an idea from being stolen is one thing. Stealing the fruits of others' ideas just because you came up with it first and sat on it is something entirely different and wrong. Its like a form of slavery, selling our rights to anyone who has deep enough pockets.
In UK Patents Act (Section 40(2)(c) if you must know) an employee can 'sue' for extra compensation when they invent something that provides "outstanding benefit" to their employer and the employer hasn't fairly compensated the employee (eg. they just got their wage and the employer made millions off the invention).
Funny you should mention it, I developed a product that currently has 3 patents pending. I will receive nothing, not even a "job well done" from my bosses. contracts really hurt sometimes.
It takes a lot of capital (re: money) to get a company off the ground and into the black, not just IP capital. The guys with the money are giving us opportunities to be creative. A patent helps to protect the investment of capital, but doesn't guarantee the viability of a business. I'm listed as inventor on three patents, only two of which are part of a sustainable business. I received stock options that, after 7 years, were actually worth something of signficance. But I received no plaque or any other acknowledgement. Left to my own devices, I would not have been able to generate any of those opportunites. So, I'm actually greatful the way things worked out. In retrospect, the real glory ($) is in developing your own ideas independantly and turning them into a viable business, a destiny you control. Much easier said than done.
And, if I "invented" something on company time, would be happy just to be recognized for it.
They are paying you a salary for your work, aren't they?