Employed inventors compensation

When the first Moss Bill was filed, its provisions were studied by the American Chemical Society Committee on Economic Status and the Committee on Patent Matters and Related Legislation. One concern was whether an official ACS position on the bill should be presented to the governing congressional committee. The ACS bodies also felt that consideration should be given to the active involvement of ACS itself in developing a program for encouraging compensation to employed inventors. It soon became apparent to the members of the two ACS Committees that the issue was more complex than appeared, and a joint subcommittee was appointed to study the entire question in depth. This subcommittee, under my chairmanship, has been active since 1972, and it made a report to its parent committees in the fall of 1974 with recommendations for future action. 

There is no real opposition by corporate management to providing extra compensation to employed inventors. 

The principal problems to be resolved in providing such compensation are to determine what constitutes "fair treatment of employed inventors, to determine who should share in any compensation, and how to determine the value of an invention. These are complex problems that involve not only many technical and financial decisions but emotional and psychological considerations. 

Establish an office at ACS Headquarters to help individual employers set up equitable compensation plans for employed inventors. Such a service could be either self-sustaining through a fee system or provided at ACS expense. Joint efforts along these lines might be taken with other professional societies. 

Establish within ACS a counselling, mediation, and conciliation service for the benefit of members and employers in resolving issues relating to compensation for employed inventors. This service could be gratis or for a fee and could be a joint undertaking with other professional societies. 

Quigley, S. T., Perspectives on Inventor Compensation, Symposium on Patent Awards for the Employed Inventor, 70th National Meeting, American Institute of Chemical Engineers, August 30, 1971. 

A What you are asking points up that this is not a simple inventor compensation problem. It is a much more complex situation. If an employer develops a plan for compensation, he should take possible complex situations into account. This is the gist of what I am saying. 

Sutton, J. P., Compensation for Employed Inventors, Chem. Technol. 

Based on the membership survey, the ACS Task Force on Compensation for Employed Inventors is presently formulating recommendations for the ACS Board. 

There is no Justification for establishing a formal system in this country mandating extra compensation for employed inventors. There is no evidence that Invention or innovation would be encouraged, and the consequent administrative complexities, communication barriers and employee relations problems which would result, make the profit-sharing concept unappealing. 

Morle, C. W., "Compensation for Employed Inventors", a reprint of the Committee on Patent Matters and Related Legislation, American Chemical Society, Washington, D. C., p22, March 1976. 

Develop typical plans for compensating inventors for use by employers and encourage all companies, government agencies, and educational institutions to administer such plans. 

A I hesitate to get into that because there are three ways that are set forth in the German law to compensate the inventor. One is by using an analogy to licensing. If there were a license issued for an invention at a certain royalty rate, then a percentage of that royalty would be paid back to the inventor as his share. Another way is to try to determine the value of the invention in terms of profits back to the company and take a percentage of that. The third way is to simply come to some mutual understanding between the employer and inventor(s) on an arbitrary basis. 

In the case of an employee hired to invent, however, the courts faced a new problem, because here the inventor had actually offered, as his services for which he was compensated by his salary, his originality of thought and his ability to develop new things. In effect, the employee had contracted to make inventions in return for his salary or other compensation. In these circumstances, the courts decided that the employer was entitled to title to the invention itself and to any patents derived from it. Again, in the words of the Supreme Court in the Dubilier case (8) ... 

The question arises whether there is any incentive for an employed researcher to patent an invention, apart from the contractual obligation to do so as an employee. Filing and defending a patent often results in a lot of additional work for the inventor which in the case of a patent defense may be related to work done months or years before, while the inventor s research proceeded in the meantime. Publications on the subject and on later improvements may be held back in order to avoid supporting potential competitors. Thus the interest of a researcher to patent an invention interferes with the interest to publish and to turn the attention to new research fields. Specific measures by the employer, for example a bonus for a successful patent application or other awards, but at least an adequate recognition of the achievement should be considered as incentive for inventors. In this context it is noteworthy that a rather unique law in Germany entitles inventors to compensation payments by the employer. 

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