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Patent Reward Systems – It's Not About The Money

Patent reward systems are put in place by many companies to give employees an incentive to disclose their inventions and go through the patent process. Bosses like the idea because it gives them a way to recognize employees, especially those creative people who toil in obscurity in a lab. Employees like it because it is a true recognition for their contribution to the company. And they get paid.

A typical program may pay anywhere from nothing to $500 for merely submitting an invention disclosure, up to $1000 when an invention is submitted to the Patent Office as a patent application, and anywhere from $1000 to $5000 when the patent issues.

I have been on both sides of these programs. As an inventor and engineer at several companies, I have written many, many invention disclosures, some of which have turned into patents. As a patent attorney, I work with some inventors at larger companies who have submitted the disclosures. I bring a different perspective to this discussion.

From the company’s side of things, the company’s biggest problem is always getting inventors to write down the initial disclosure. Without the disclosure, the process does not go forward and other people in the company cannot participate in protecting the idea.

After the idea is written down, it may be further documented, safeguarded, turned into a patent, or at least documented that the idea existing within the company and the company owns it.

From the inventor’s point of view, a patent reward system leads to arguably one of the highest honors an engineer or inventor may have: their name on a patent and the patent on their resume. Inventors who go through this process, especially those doing it for the first few times, have invested an enormous amount of emotional and psychological energy. This energy and investment is far more than non-engineers can appreciate, since getting a patent can be the Holy Grail of engineering success.

A tip of this enormous emotional iceberg may be seen in little but very heated squabbles about who should be on the patent, who should be listed first, how much credit should be shared across engineering departments, and other assorted problems. Many times, an inventor who feels like his or her idea was not fully appreciated will quietly start looking for another job or take some other passive aggressive measure. Those resentments will be harbored for years.

Patent reward systems may bring out enormous emotional energy from some very creative people, often the people on whom the future of a company can be built. Patent reward systems that are not fair or are badly organized or poorly run can build up a lot of anger in the company’s most creative people. Creative people who are very angry can be very dangerous.

Remember that creative people will game the system. A patent reward system is not some run of the mill program by human resources to keep employees happy. It is a highly competitive program for the most important and valuable employees a company has. No matter how brilliant and smooth talking the CEO might be, without a goofy engineer with a pocket protector coming out with great ideas, the CEO would have nothing.

A good patent program should get the right people to do the right things and encourage them to continue. Regardless of how much the program pays or the details of how the program works, the single most important thing is to give the inventors the respect and encouragement that they crave. It is far more important for the inventors to have the emotional and psychological needs met in the patent reward program than the financial needs. They know they will get paid when they are hired for their next job anyway.