Tuesday, January 25, 2011

Pre-assignment of Inventions - SOLUTIONS

This is a follow up post to the previous post on Issues of Assignment of Inventions (AOIs). My point there was that AOIs hurt the companies applying them as much as they hurt the employees. It is a lose-lose situation.

The question is if there is a better system than this? And as the company is the one imposing these today, a better question would be "Is there a system that benefits more the company than the current one?" Here is what I think would be a potential formula, based on 3 pillars:

1. Restrict the ideas protected to ideas related to current or past positions of the employee. I.e., with the most aggressive terms used today, if the employee works in a broad multinational company, in say, the medical department, but comes up with an idea about a bathroom product, the company has all the rights as long as bathroom products are part of the company interests. With my proposal, unless a clear link was established, the default is that it would have employee ownership.

2. Even when outside the case #1, employee has to grant to the company a free non-exclusive license to the idea, in exchange of being able to work on it while in the company. If the idea can bring benefits to the company, a program could be in place where the company offers help to the inventor in exchange of a share or even incorporates that as part of their products in exchange of a reward. That way, this becomes a win-win. Company getting ideas from their employees beyond the people working on those teams, while employees getting in exchange an easier path to commercialization than going solo.

3. If the idea outside case #1 is related to any of employer's customers, employee should quit to pursue it. Company lawyers admit that AOIs are there to protect company customers from getting sued by/competing with the company employees. For instance, imagine the case where an employee working for National Semiconductors sues Apple for an idea he had patented, and Apple was one of National Semiconductor's customers. This could hurt the employer business with that customer. I don't feel this is a strong legal, moral or ethical reason whatsoever for the AOIs used today, but still, a clause could be added that in such a case the employee should quit the company.

With what to me looks like 3 fair rules, besides the immediate rewards for the company described above, there would be two more positive side effects:
  1. Competitive advantage when comes to recruiting creative people. I.e., better talent.
  2. An ethical practice/culture always pays off, likely resulting on employees sharing even the very good ideas they got as long as they are related to the line of work they were or are involved with. Today, even those (which the company is actually paying for) are sometimes hidden as a retaliation practice.
Thoughts? Why this wouldn't work? Why it is not there today? Is it because "everybody" does it?

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