Why patent anything if you have to turn it over to your company?

I got a thought-proving response to my latest editorial about patents that I will paste below. Actually I got many many emails in agreement and three that said I really didn’t understand the process and how a small guy needs patent protect. I wrote back that I favor the small guy over the multinationals and I guess the writer, a patent holder and obviously very creative fellow, agreed to disagree with me. The fellow who sent this other mail wanted to remain anonymous so I will not print his name. Below that email is a yet another response I got months ago from a different blog about patents. Here is the first, and note the question he asks us to discuss — compensation for corporate employees that come up with inventions.

Your point about patent duration is well taken but what about ownership? In the US everything goes to the employer even when the employer has made no contribution. Dr. Noyce did rather better than Mr. Kilby financially as Dr Noyce had corporate ownership. Since the employer owns every employee thought as a condition of employment and since the employee need not expect anything in return for disclosure, whether patent duration is 20 years or 20 minutes turns out to be of little consequence to the inventor in the US corporate workplace.

Managers demand incentives. Salespersons demand incentives. Those incentives get paid. For creators of intellectual property, however, there are mostly obligations - serious ones. So why should anyone want to invent anything? What’s the incentive? Bragging rights? A few words on a resume? Corporations are adamant about protecting "their" valuable intellectual property but they go to great lengths to avoid paying to acquire it. I know of a company that may award an inventor less than $3000 for her patent and that award is at the employer’s option. This is less than their tinyest management bonus (there the lowest level managers may get 10% of their annual salary as a bonus simply for having subordinates). When an employer is a multinational corporation it is impossible for the ordinary employee to know all the businesses their employer may have interest in or the technologies employed. This means that any invention, independently created or not, is up for grabs. It would be unlikely, however, that any payment at all would be forthcoming if the invention were not directly usable by the division or operation of the company the employee directly works for. Thus an inventor could spend her own time and money, use no employer resources, have to give up any ownership claim, and get absolutely nothing in return because another unit in another part of the world could use it but not the one she works for.

Corporate employment policies usually make the employee obligations extend beyond termination. Thus an inventor could be laid off, move to another state, then be compelled to go anywhere in the world the company wished without regard for the impact that might have on the terminated employee’s then current employment, family situation, or anything else. Dispute resolution is invariably by arbitration with court action permitted only for the protection of the corporation. In Europe inventors may by law keep their inventions and the company must, should they desire to use them, pay the inventors royalties. But the same corporation that must pay royalties to their employee inventors in Europe need not do so with their US employees. The patent "reform" bill currently before Congress gives even more rights to employers. The bill allows the employer to patent without the knowledge or consent of the inventor.

I think recognition of the fact that since only natural persons create intellectual property, only natural persons should have intellectual property rights. Corporations (legal persons) should be permitted only to lease intellectual property and that without exclusivity when the independently created invention has no connection with or development cost to her current or past workplace with that employer (if the employer wanted it they could bid for it).

So how about some discussion about the almost nonexistent ownership rights of the little guy? I realize the issue will be settled by corporate or corporate sponsored campaign contributions but it’s still worth discussing.

This is interesting stuff, I have read other arguments that have questioned the power that we allow corporations, such as relieving the members of personal liability. I don’t see why a private company and a corporation should be treated differently if they kill people. Below is another letter I got from Tracy McSheery at PhaseSpace. He did mention to me that the actual people that work at the patent office are nice people so he wants to make clear he is referring to the system, not the people trapped in it.

Nice article on Patents. My understanding is that the Stradivarius problem, where the secret died with the family, was one concern that prompted the patent system. The real overriding reason that you articulated was that companies wanted to stifle innovation and protect their monopoly. The bigger the company the more valuable the patent system becomes, because you can convince a court to impede their product from hitting the market until they satisfy some judge.

I naively went to the patent office 25 years ago and had it explained to me by some examiners: "If you just want a patent, you can file it under the wrong classification, and use buzzwords and it will likely be granted if you can push things through. The patent examiners have 12 hours on average for the entire process that takes up to several years of elapsed time. They throw some standard roadblocks in your way and if you successfully navigate those roadblocks, you get your patent, because they assume that the courts will determine the validity if anyone really cares. The problem with the courts is that the divorce lawyer who gets tired of being a lawyer becomes the judge, and assumes that the patent office did some magical search with experts combing over every word and claim to insure it was novel, unique and not perpetual motion."

The US patent System is a Joke and most other countries look at it that way. We have an odd pride for this archaic and broken system that causes us to try to protect it, when it’s really costing us more than it is worth and as you said stifling real progress.

Copyrights are almost as funny. Disney is making a fortune on Copyrights for properties that they didn’t pay for in most cases. Then they are sued by other rich groups for similar deals. The Milne family isn’t getting the money for Pooh, it’s the family that bought the rights to the rights. Actual innovators and creators are usually the last to see money after the lawyers, accountants and business managers have each extracted their percentages. Then again, if the originators were able to profit more directly, we might not need as many lawyers and accountants. Hmmmm.

Well I guess that all of us are a little frustrated with the patent system. Oh, do check out Tracy’s company’s website, if only to see the motion-capture intro— this mo-cap technology is what makes modern animation so realistic.