of its provisions and has drafted an alternative bill which IEEE proposes to have introduced into Congress at the appropriate time. The ACS CPM&RL is keeping in touch with IEEE on this. Some state legislatures have passed, or are contemplating passing, legislation providing that compensation be paid to employed inventors. This movement is quite recent and it is not possible at this time to predict how many' states might consider and enact similar actions. The Industrial Research Institute (IRI) has sent a letter to Chairman Rodino of the House Judiciary Committee taking a position . against the Moss bill. IRI has also organized a study group to look further Into the issue, primarily to try to devise means for obviating the need for legislation, if possible. How Can the Issues be Resolved Let me turn now to steps which might help to increase the satisfaction of employed inventors with reward procedures while at the same time resolve some of the "fairness" and administrative difficulties perceived by employers. Obviously one procedure would be legislative with the methods for determining fair compensation spelled out in minute detail as with the German law. ་ A second procedure would be to develop an impartial counsellingmediation-conciliation service, either under government or private auspices, with strong enough support so that the decisions made by the service's board of inquiry would be respected much as if they were legal decisions. A third procedure would be to establish guidelines for fair compensation practices for employed inventors. Monitoring of such guidelines would present a problem, of course, and their enforcement would be difficult. Manly, in his paper, suggests that the best way to handle the situation is for all companies to treat their employees fairly, to make known the use of such fair treatment to legislators, and, if legislation seems inevitable, to work with state and federal bill drafters to provide laws which industry can live with. In addition, as mentioned previously, a thorough study of all aspects of the problem would be made under the auspices of IRI. In This program is laudable as far as it goes, but it does not contemplate or consider possibly viable alternatives to legislation. addition, it fails to recognize adequately the need to reward the employed inventor, since, I fear, "fair" in the context used by Manly implies fairness from the employer's viewpoint, with the concept of adequate compensation to the employed inventor who makes extraordinary inventive contributions being unduly undervalued. In a paper delivered at a symposium entitled "Legal Rights of Chemists" at the ACS meeting in April 1976, I suggested that a combination of methods might provide the necessary means for providing fair and equitable compensation to employed inventors while not requiring undue administrative cost, legislation or the setting up of excessive bureaucratic procedures. This program included the development of detailed substantive compensation guidelines for employers and employees, the development of typical standard plans for compensating employed inventors, the establishment of an office to advise employers in setting up equitable compensation plans, and the formation of a counselling-mediation-conciliation service to aid both employers and employed inventors in the resolution of issues related to the compensation issue. I also suggested that development of such a system might need to have legal backing, such as the ability to refer to a court those rare situations where irreconcilable differences might arise. These services might well be provided by a professional society such as the ACS, or a consortium of professional societies. While these suggestions may sound elaborate and cumbersome, there seems to be no simple way to bring into balance the various interests of both the employer and the employed inventor. There is no reason not to try to do so, however, even if cost and effort seems rather large. Many companies spare no cost or effort in obtaining patent coverage of worthwhile inventions. It seems only proper and right to treat the inventors of these inventions in the same manner. Conclusion In this paper I have tried to show that the question of compensation for the employed inventor is a broad one, that it encompasses the twin needs of enhancing the rate of innovation and rewarding employed inventors, that great differences between individuals exist about how best to effect such compensation, that present methods for accomplishing this purpose are widely diversified and are frequently perceived by employed inventors to be inadequate, and that alternative methods to legislation can be conceived to provide some resolution of the present and anticipated problems. To return to the title of this paper, in light of the views expressed here, I should like to add three two-letter words and a question mark. The title would then be "Legislation Is Necessary and Coming, or Is It?" Whether legislation comes, it seems to me, is up to both employers and employed inventors. But, if it does come, the lack of adequate reward procedures for employed inventors will be the primary cause. To obviate legislation it will be necessary for employers to assume the responsibility and burden for developing compensation plans acceptable to employed inventors. widely the threat of legislation will remain. Until this is done Compensation for employed inventors Our patent system is designed to "promote the progress of... the useful arts" (1) by encouraging disclosure of inventions to the public. As an incentive to disclosure, a right "to exclude" is given to the owner of the invention by the grant of a patent. Whether the patent system has been fulfilling the purpose of facilitating disclosure to increase the common fund of knowledge instead of fostering the withholding knowledge in the form of trade secrets is a matter of wide current interest. But this aspect of the system is outside the scope of this communication. Instead it concerns an important concomitant to the system: reward to inventors in order to encourage intellectual creation (2). Growing interest in whether this function is being satisfied is reflected in activities of scientific societies, and of Congress (3). Many opinions have been expressed about whether the system should be modified, but such expressions for the most part were grounded on personal experiences and not from direct evaluation of inventor motivation. Why inventors invent is an interesting question but it is not covered here. Here the inquiry is whether inventors feel the system is fulfilling in the reward function, which is an important purpose of the patent system. This paper reports results of a study done by the California Coordinating Committee of the American Chemical Society that represents more than 10,000 members of the eight sections of ACS in California. This study focused on experiences and attitudes of recent California inventors. By-mail questionnaire, it surveyed all inventors of chemical patents who lived in California and who were issued patents in the last quarter of 1973. dissatisfied with the system of compensating employed inventors. Of those who responded, 43% expressed a lack of satisfaction with the compensation system relating to issuance of patents, even though the patent system has, as one of its purposes, rewarding inventors to encourage intellectual creation. Only 18% were "very satisfied" at the time a patent issued and the reward function would be expected to be at its maximum. One reason for the widespread dissatisfaction is that 54% of the respondents got one dollar or less in direct compensation for their inventions. Substantially all of the employed inventors assigned the patent to the employer. (All but 2% had signed written employment agreements requiring such assignment). Selfemployed and partner inventors tended to be more satisfied than employees of corporations, probably because they have an equity interest in the ownership rights. Employees of larger corporations tended to be more satisfied than employees of smaller ones, possibly because larger corporations had more formal awards programs. Those employees who received an kind of direct recognitione.g., money-peer recogni. on, commemorative notationtended to be more satisfied with the system than those who did not. The older and the higher paid inventors also appear to have greater satisfaction from the system of employment compensation under which they work. Because of the difficulty in finding complete addresses for inventors listed in the Official Gazette of the U.S. Patent Office, many of the 402 inventors were not sent questionnaires. A total of 248 questionnaires were mailed and 162 (66%) were returned within 6 weeks. Others came later, but were not tabulated. Since over 10% of the questionnaires mailed were undelivered, the 66% of all those mailed that were returned show a strong interest in the subject matter. A copy of the questionnaire that shows the percent response in each category is in Figure 1. Questionnaires were sent to inventor's home to avoid interfering with his work and/or any inhibition he may feel in adJohn P. Sutton, a member of the Joint dressing such questions while he is receiving compensation The results indicate that California inventors are relatively well paid, highly educated, and knowledgeable about patents and compensation practices from receiving many previous patents in addition to those which form the basis of this survey. Yet even these inventors are largely Board Council Committee on Patent Matters and Related Legislation of while not engaging in creative effort. The Inventors Of the inventors, 90% were in the age group between 30 to 60, and 43% were between 40 and 50. One third were over 50, discrediting the belief in some quarters that older workers do not invent. All inventors had post high school education with 93% having earned at least one college degree; more than half had the doctorate. Only 9% of this group had no other patents; while 36% had more than 10 other patents. The inventors in this sample have thus repeatedly demonstrated their creative abilities. These inventors appeared to receive relatively high salaries. Only 16% received an annual income below $18,000. Two thirds (65%) had an income between $18,000 and Reprinted from CHEMICAL TECHNOLOGY, Vol. 5, February 1975, pp. 86-89 |