Inventors of the World, Unite! A Call for Collective Action by Employee-Inventors

Abstract

While technological innovation is often lauded as the cornerstone of the American economy into the next century, and both governmental and private observers ponder with fascination and some trepidation the ability of U.S. companies to reach and sustain high levels of innovative productivity, very little attention is paid to actual inventors. This article is one effort to draw attention to the importance of employee-inventors, the people who conceive and develop the inventions that American corporations rely on for growth and profitability. Though it is universally accepted that skills gained by an employee in the course of his employment belong to him alone, when a patentable invention results from the diligent application of these skills, most employee-inventors are completely deprived of all ownership rights and privileges.

The role of employee-inventors within their employing entities and within society is unique. An inventive individual with specialized scientific training who toils in a research facility performs a very different social and economic function than an assembly line or service worker, educated or not, who rotely performs the same small repertoire of tasks. While the assembly line or service worker can be expected to produce a predictable amount of goods or services within a given time frame, and with a value that can be accurately estimated, even brilliant and diligent labor by a properly equipped and well supported inventor offers no assurance of a profitable or even useful outcome, regardless of the amount of money or time invested. A corporation cannot just build a laboratory, stock it with equipment, hire individuals proficient in the applicable technology and expect patentable inventions to be methodically produced. Because an employer of potential inventors, typically a large corporation, assumes the financial risk that investments in research and development will not generate a positive return, the employer expects to reap the full rewards of any profitable invention. One of the ways such an inventor employer typically seeks to accomplish this goal is by requiring all potential inventors (and, increasingly, all but the most marginal employees) on its payroll to sign pre-invention assignment agreements as a condition of employment. These agreements require signatory employees to assign to the employer all rights to inventions conceived by the employee while at work, or in subject matters related to work, or while using any resources of the employer. Because employee-inventors may themselves invest extraordinary amounts of time, education, training, intellect, energy, and waking and sleeping thought to the innovative and usually complex ideas they originate and reduce to practice, and because such employee-inventors may not be able to secure any employment in their areas of expertise unless they sign pre-invention assignment agreements, such agreements are unfair to innovators.

It is unjust that an employer reaps all of the rewards of a valuable patent as the payoff for the resources it devotes to an invention, but an employee-inventor who has also made a substantial investment in the inventive process - potentially at a level of personal sacrifice disproportionately greater than any financial or opportunity cost risk assumed by the employer - is usually precluded by a pre-invention assignment agreement from profiting from the fruits of his or her labor in a manner commensurate with, or even proportional to, the value and utility of an invention, and may not benefit from her invention at all. Employee-inventors are often rewarded for innovations with group censure and the loss of their jobs. Thus, the patent laws of the United States, which are intended to foster innovation, are premised on the now false assumption that inventors own, and therefore benefit from, the patents obtained on their inventions. In fact, the monopoly incentive completely sidesteps inventors, who have no incentive to innovate if they can find a better job doing something else.

This article first reviews the disincentives to innovate confronting the typical employee-inventor, who is forced to assign all of the rights to any patentable invention she develops to her employer without compensation. Next, it considers mechanisms for eliminating (or at least minimizing) these disincentives suggested by other scholars, the implementation of which require either new legislation or changes in judicial interpretation, or sometimes both. Finally, this article proposes a unique solution for solving the disincentive problem: Rather than waiting for Congressional or Judicial action, as neither is likely imminent, inventors should organize and act collectively, by refusing to sign any pre-invention assignment agreements in the future, by revoking pre-invention assignment agreements currently in effect (either through negotiations with the companies they work for, or by changing jobs and refusing to sign such agreements with new employers), and by retaining ownership of their patented inventions to exploit or license themselves, or with the assistance of a patent collective organized by and for inventors.

Publication Date

1-1-1997

Journal Title

Santa Clara Law Review

Document Type

Article

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