Blue LED Inventor Nakamura Awarded $8.1 Million

redkingca writes "The New York Times (reg required) has an article about an $8.1 million settlement in the blue-LED royalty case. Mr. Nakamura created the blue LED while working for the Nichia Corporation but never received any bonuses or royalties for his invention. A lower court had awarded 20 billion yen, nearly $200 million, and ordered Nichia to pay Mr. Nakamura last year. The settlement came after the company appealed that ruling."

Comments

He was working for them at the time

[Ironsides]

It's nice to see "the little guy" get one over on the "anything you think, we own" mentality of the big corporations. Produce a product on company time, yeah that's work for hire, but this bullshit of "you made X 3 years after you left the company, but we still own it" has to stop.

He was working for the company, on company time, at the companys direction (after he asked the company president to be assigned to do work on blue lasers), using company equipment. The guy who invented the Flourescent lightbulb for GE didn't get as much as the company initially offered this guy.

Re:He was working for them at the time

[ZorinLynx]

This is what bothers me about corporate greed. People do things that make their company BILLIONS of dollars, and don't get compensated. You'd think that if someone got a few million for every invention that makes a company a few billion, they'd be that much more motivated to come up with amazing new things.

I have a friend who managed to catch an accounting error that saved the company millions of dollars. He didn't even get a BONUS that year. If I were the CEO and I found out an employee saved us millions, I'd at least drop him a $50,000 bonus check or something, since the money wouldn't be there at all if he hadn't caught it.

Don't corporate managers see the need to reward employees for their hard work?

-Z

Re:He was working for them at the time

[Anonymous Coward]

Don't corporate managers see the need to reward employees for their hard work?

If enough employees continue to work hard without any reward other than their base salaries, then there IS no need to futher reward them.

For various reasons, working hard is seen as an indication of character and of self-worth. What employment really is, though, is a cold business transaction.

An employee exchanges work for money. If the business can get the same work for less money, that's considered to be a good thing for the business. It is also considered good if a business can provide less service and/or goods to its customers if they can get the same payment; that's called "maximizing profits".

Well the same goes for employees -- providing as little work as possible in exchange for the same salary is maximizing the employees' profit. After a few years of working, most American workers realize they can literally work themselves into the grave, and they will not be rewarded for it by their companies. So they stop putting forth extra effort. This is why American workers get labeled as "lazy" so often -- but it's actually a quite rational response to the environment we're stuck in.

If the C-level execs can keep the workers busting their tails off with threats of their jobs being outsourced, or just convince the proles that they have better characters if they work their lives away, why wouldn't they do so? Paying in "spiritual" coin is cheaper than paying in real ones, and it certainly does maximize shareholder value, doesn't it?

This is why they don't reward extra effort -- most of us are too stupid and will work hard without that reward.

Re:He was working for them at the time

[T-Ranger]

The flip side of that is that if you, as an employee does something that causees the company to loose money, they are not going to go after you for the difference.

Re:He was working for them at the time

[milkman_matt]

I liked the idea in an earlier post saying that "if a company makes 3b on an invention, why not kick down a couple million to the person who created it" which I'm sure this would apply to a team who invented something as well.

Afterall, in the corporate vs. individual greed I figured, why shouldn't individual greed win out. Corporate greed means people make less, are less appreciated, and therefore less happy, thus they don't come up with the things they may have come up with and this affects the company negatively. If an employee is WELL rewarded for an ingenious invention, then they will be far more likely to work harder and make the company far more money. Thus, the company benefits from individual's greed, however the reverse is not true.

HOWEVER: this post brought up a problem with that theory, a big problem. The company is going to put a LOT of money into backing the 'idea' even if it is come up with by an employee. The company takes all of the risk, why should they not get all of the reward? Sure, a small fraction of the reward could go back to the inventor, but what if that product is a failure, can we honestly expect the company to ask the inventor for a fraction of the total cost of backing the idea? Say the company LOSES 3b on the idea, should they ask the employee for a couple million (or the equivelent of the reward the employee would have received for MAKING the company 3b instead of losing the company 3b?)

It's like the inventor wants a reward for doing well, but accepts none of the burdon of failure. I for one think it's great if a company rewards you for something that makes them a ton of money, in fact, I think all companies should do that. If you make them that much, it's the least they can do. Plus there's the benefit of a happy workplace that wants nothing more than to impress the company and bring them more kickass products. But from the company's perspective, I can see why they would see that as kind of one sided.

Re:He was working for them at the time

[lew3004]

As a manager I've seen both sides of the coin: the one you mention where workers generally realize that they're maximizing their profit and strangely enough the more recent response of "We're just lucky to have a job." Both are legitimate responses to economic activity, however both are also the product of corporate brainwashing. Think about it. Don't reward the workers for jobs well done then outsource for cheaper labor due to "lack of efficiency and / or productivity". Now you want to resource for logistic purposes and people are thankful for a job at a 50% salary cut; and GRATEFUL to have it. Nonsense.

Re:Man... that's harsh. Good for Nakamura tho

[Tablizer]

Morale could be helped a lot by sharing the wealth and kudos. It does not help if a company earns 50 million off of an employee's idea, but only gives him/her a T-shirt. What message does that send to employees? At least give the inventor a nice fat bunus. Some people and companies are just so fucking greedy that it blows the mind. Their greed is beyond rationality. If you want yet another 50-million invention to come along, then share the wealth a bit to prime the pump for the next idea. Otherwise you are just biting the hand that feeds your greed.

What an awful precedent, though

[thpr]

So if you consider that he worked for the company at the time does your opinion change?

The problem here is that he has set the precedent that your salary is if you do nothing; if you invent something cool, you sue the company to get MORE. The result will be money to lawyers and those whose ethical standards lead them to freely sue their employer... lowering salaries generally (as companies hold back reserves to handle these situations). This will take money away from the consistent and average employee.

Please keep in mind I DO work for a large company who owns my inventions, I DO have patents in my name but assigned to my employer, and I WON'T sue my company even if they make millions from it and I don't see a dime... they compensated me for that time and effort - that's what my salary is.

Re:What an awful precedent, though

[Qzukk]

The problem here is that he has set the precedent that your salary is if you do nothing; if you invent something cool, you sue the company to get MORE.

I DO work for a large company who owns my inventions, I DO have patents in my name but assigned to my employer

Once upon a time there was a man whose job it was to put a cog on a spoke and hit it with a hammer. All day long. He was paid hourly to swing the hammer. After years of doing this, he realized that if the cog was replaced by a widget, the device he was working on would run 50% more efficiently with %10 less noise. The company patented the idea, went on to make billions off of the invention, and continued to pay the inventor his hourly wage.

Now, you either are paid to create patentable things, or you're incredibly altruistic to be giving your company your proceeds above and beyond your job description (what you are paid your salary for doing, not "nothing") for free.

Re:What an awful precedent, though

[oobob]

The problem here is that he has set the precedent that your salary is if you do nothing; if you invent something cool, you sue the company to get MORE.

So are you honestly suggesting that the salaried employees that bring in millions of dollars with their inventions or solve particularly difficult problems should be paid the same as those who aren't profitable at all or stick to the routine? What about the executives who are paid millions based on the performance of the company? We compensate executives of big corporations based on how the company performs, and we vary their pay wildly, to the tune of several million dollars, depending on how they do. Why are people so willing to accept that hard work and results should only be grossly rewarded when performed by executives? People keep saying that the company provides the capital for the R and D and takes the risks to bring it to market. How did they get this capital? Osmosis? It was either through the investments of venture capitalists or through previous products developed by the same people we're talking about. And if it was from venture capitalists, the company is likely relatively new, and breakthrough inventions that earn a profit should be rewarded, as they're a big reason why the company will see another year. Does anyone here honestly think that executive ability is the only ability worthy of millions of dollars?

Please keep in mind I DO work for a large company who owns my inventions, I DO have patents in my name but assigned to my employer, and I WON'T sue my company even if they make millions from it and I don't see a dime... they compensated me for that time and effort - that's what my salary is.

They taught you that nonsense about salary and compensation so the executives could keep your cut. I read another post that said the CEO gave a press conference saying that real researchers do their jobs for the joy of technical achievement. Do executives do their jobs for the joy of fiscal discipline? Does it bother you that your time and effort, no matter how productive or brilliant, is worth shit unless you're an executive? And does it surprise you that the people paid the most are the ones who manage the money?

I thought that in capitalism, we reward those with harder jobs who perform well because otherwise "no one would do them." Why are we rewarding one type of hard work and not the other? Why is it that culturally, we reward people who run companies or appear on our newly invented hi-def TV screens screens, but we don't reward the people who make any of this technology possible? I'd like to thank you, though. I now know that if I end up in a corporate job, I should only surrender my mundane ideas to those greedy fucks.

To you my fellow youngings: stick to the university life. The university of Iowa just changed their patent and staff invention compensation plan because it was percieved as being unfair among the professors. They changed it so that the inventor recieves all of the first $100,000 of profit (or something like that). Here's how horrible it was (they also mention that change):

Adding to the benefits for researchers is the chance for profit. The university splits licensing revenue four ways - 25 percent to inventors, 25 percent to their departments, 25 percent to a fund advancing university research, and 25 percent to UI Research Foundation - but a new plan the UI Staff Council passed on Thursday would allocate them an additional $100,000.

That's worth the extra school.

Re:What an awful precedent, though

[AhBeeDoi]

I thought that in capitalism, we reward those with harder jobs who perform well because otherwise "no one would do them." Why are we rewarding one type of hard work and not the other? Why is it that culturally, we reward people who run companies or appear on our newly invented hi-def TV screens screens, but we don't reward the people who make any of this technology possible? I'd like to thank you, though. I now know that if I end up in a corporate job, I should only surrender my mundane ideas to those greedy fucks.

You've confused capitalism with your sense of morality. Capitalism is amoral; it's about initiative and incentives, not justice, not equality, not peace on Earth.

Large corporations engage in commerce, the quintessential capitalist activity. With respect to how companies are run, the model is more akin to feudalism than capitalism.

Re:Cheap

[tgrigsby]

Ok, let's review:

o Most of us can't earn 1 million in a decade.

o This guy has enough money that, if left in a simple account earning 5% (compounding left to the accountants), he could live off the interest of $400,000 a year.

o That's a crap-load more than I make in a year.

o He worked hard, but no harder than I work, and in some instances, no more hours than I work.

o He got paid to do what he was doing.

Should he have gotten paid more? Oh, hell yeah. Should the company have appreciated him more? Well, duh. Now the genius has left and they're stuck with whatever they've got to work with. They screwed themselves while screwing him. But to call $8 million a drop in the bucket is beyond cynical.

While I'm not sure I agree with the decision of the court in terms of prior agreement of compensation, it certainly is just. The good guy won in the end, and he got the bonuses et al that he richly deserved.

He's a lucky guy...

[MLopat]

I could write a short list of products that I've created that have generated millions of dollars for companies that I've done work for, either as an employee or a contractor. But in doing the work, I was paid a guaranteed salary, and knew I would receive that whether the products were profitable or not.

There's more to making profit than just creating an invention. If the company didn't provide the supporting technology and capital to research and produce the product, then it wouldn't have been invented. Not to mention the whole marketing aspect. Sure you can be sitting on a million dollar idea, but without capital, marketing and a distribution model, it's worthless.

If he felt this product was going to be such a success and could have produced it without his company, he should have left, raised venture capital and produced it himself.

Just capitalism doing it's thing?

[MasterC]

It's cases like this where I go back and rethink capitalism vs. communism vs. etc. Take Kary Mullis as another example (already mentioned in comments). His polymerase chain reaction (PCR) was patented by his employer, Cetus, who gave him a $10,000 bonus and then sold the IP for $300 million. His salary & bonus are a pittance for PCR.

Makes me wonder if this is the type of stuff Marxists think will bring about communism...and how long capitalism can survive when the creator of extremely meaningful creations gets 0.00333% of the profits.

Re:Cheap

[iamacat]

Oh come on. Say I bought a really good business skills book, just followed its instructions to the letter and somehow lucked out and made billions. Then later the author shows up, tells me he is barely making ends meet and asks for more money. I sure as hell hope I don't legally owe him money. Otherwise I have to keep paying perpetual royalties on all books, software, music, movies that I bought and put to good use. That's what the bad guys want, right?

It's a different story if the inventor of the blue ray was enticed to work hard on a modest salary by promises of a sizable reward if he created something of value. Then it's up to jury to decide how much reward was implied. $8M sounds about right.

Re:Man... that's harsh. Good for Nakamura tho

[randall_burns]

I agree. When executives do stuff like pay Kary Mullis $10,000 for an invention that earns the company $300 Million, they dishonor themselves. Now Japanese companies tend to have very flat rates of compensation-however what they could easily do is make sure that folks that generate valuable inventions get early retirement and/or cushy jobs like appointments as a lifetime "fellow"(i.e. a chance to do what they want with the rest of their lives).

I don't think it is just greed here though. I honestly think these companies would make more money if they had sane compensation for inventors. It is more a control freak mentality.

Re:Man... that's harsh. Good for Nakamura tho

[Grishnakh]

My dad worked for decades for one of the largest corporations in the world, as an engineer and developed many things which were patented by the company. He got to hang the patent on the office wall, but got little if any compensation for it..

It's still that way in most American corporations from what I can see. At my job, the management is constantly talking about how we need to put out more patents, and how important intellectual property is. To give us incentive, we get a whopping $100 for filing a patent, and an enormous $1000 if the patent is accepted.

Yeah, I guess it's better than nothing, but that's really not much incentive to work extra-hard, considering the extra time and effort needed to develop and write up the patent. If your patent is some obscure thing that no one cares about, the $1000 might be worth it to you. But if your idea makes the company hundreds of millions in profit, $1k is a really cheap reward.

As a result, I never think about patenting anything I think of, or really bother trying to come up with anything that groundbreaking. If anything I'm working on is patentable (possible, but not likely), I'm not going expend the extra effort needed to see if it's patentable. If I get any truly great ideas, I'm just going to sit on them and wait until I'm working freelance before I do anything with them.

It's funny how American companies give a lot of lip service these days to "innovation", but they're not willing to properly reward any of their employees for actually coming up with these innovations. A smarter society could easily outcompete us economically if they figured out how to reward people better for their efforts.

Re:A great acheivement

[fm6]

Developing a new technology isn't cheap. If you believe in capitalism, you have to accept that the people who take the financial risks are usually going to get the lion's share of the rewards. Otherwise they have no incentive to take those risks.

What was unfair was that the inventor of a crucial new technology was only rewarded with a pat on the back. And now that's been corrected.