Slashdot Mirror
Designing a Patent-Incentive Program?
SoulMaster writes "The company I work for (we are a one-year-old start-up) has recently started filing patents to protect some of its intellectual property. At the onset of the patent process, one of the executives drafted a very basic Patent Incentive Program (PIP) which is now under full review to ensure that it is both accurate and fair. The basics of our original PIP are that inventors receive (or co-inventors share): $500 for each provisional filing, $1500 for an actual patent filing (with full claim-sets defined), and $5000 for any patent that is granted by the USPTO. While the current program seems fair to our staff, we have been unable to find anything to compare it to. Moreover, the revamp of the program is likely to grant an equity stake in the company (via an Options grant) rather than cash payouts. I've scoured Google for information, but because internally documented PIPs aren't generally public knowledge, the results are limited. Thus, I have decided to ask Slashdot users: How does the company you work for handle Patent incentives? Do they have them at all? Are they cash or equity based?"
I'm a patent attorney in Silicon Valley, and have worked with, under, and around a number of different schemes.
This isn't legal advice -- these are my opinions -- if you want legal advice, go buy some.
It is common to condition payment of filing awards on the signing of the declaration, oath, and assignment by the inventor -- the company doesn't pay until the inventor has signed.
Some also condition payment on being an employee at the time of the event -- filing the patent, issue date of the patent. That way you don't have the obligation to pay departed employees. But having said that, whoever is running the scheme should have the discretion to pay out equal amounts to ex- and non- employees when named on filed and/or issued patents. You get more interest and attention that way.
Another common approach is to pay $N per inventor for up to 4 named inventors, and for N>4 to pay each inventor $4N/k where k is the number of inventors.
Some places pay on disclosure submission. If you decide to do that, pay on *accepted* disclosures, not everything that gets thrown over the wall. While you want lots of disclosures, you don't want a lot of crap.
Decide at the outset *when* you're going to pay inventors -- some pay and present quarterly with great fanfare. My opinion is that significantly decouples the desired behaviour from reward. I much prefer having a system where things get filed, I send a note to payroll, and the $$ automagically appears in people's next paychecks. That system also minimizes the chances of people dropping through the cracks over a quarter. Yeah, have quarterly or annual beer bashes where you honor inventors as well, but don't hold up the money!
Oh, as part of that whole deal, work out with your finance types which department pays for awards -- my feeling is that it should follow who pays for filing, prosecution, issuance, and maintenance costs. If the division/group (hardware, let's say) pays for filing and prosecution, they should pay for awards. On the other hand, if filing and prosecution gets billed to G&A (corporate overhead) then awards should follow. Doing it that way puts awards costs into the entire life-cycle costs of a patent filing.