How can you encourage your employees to invent and how should you reward them when they do?

Simon Haslam , a patent attorney at Abel & Imray , takes a look at the obligations an employer has to an employee inventor and at what an employer can do to encourage innovation.

Q. “One of my employees has made an invention which will probably be really important to the company. Should I expect to have to pay her anything extra for making the invention?”

The answer to this question depends very much on the circumstances. Any claim for compensation made by the employee depends on there being a patent for the invention. If there is no patent, then the employee will not have a claim, so I’ll assume there is a patent.

Generally speaking, if the invention was made by an employee who is paid to invent and the invention came out of the duties of the employee, then the invention and/or patent must be of outstanding benefit to the employer for the employee to have any valid claim for extra payment above and beyond her employment package. Whether an invention would be deemed by a court to be of outstanding benefit will depend on the facts of the case, but it is generally very difficult for an employee to show that an invention is of outstanding benefit.

The situation is different if the invention was originally owned by the inventor herself (for example, if the employee is not employed to invent or the invention did not come out of the duties of the employee) and then transferred to the employer. In this case the invention does not have to be of outstanding benefit. If it is merely of benefit to the employer, and the benefit received by the employee is inadequate in light of the benefit to the employer, then the employee may have a valid claim to compensation.

In most circumstances, therefore, the employer has no obligation to pay an employee anything extra for making an invention. Making extra payments or providing other rewards (such as promotion, kudos within the company or a celebration of innovation) may, however, help to encourage innovation within your company, which is the subject of the next question.

Q. “We are a technology-based firm who is seeking to increase innovation in our company. How can we achieve this?”

You need to promote innovative thinking within the company. This means letting employees know that innovation is important to the company, and being seen to reward those who generate ideas (including those ideas which ultimately fail), whether by financial or non-financial (extra kudos, bottle of champagne etc.) means.

As a first step you should make sure your employees know what is meant by innovation. Many people think that innovations have to be technical. This is not the case. Although it is not usually possible to get a patent for a non-technical innovation, such ideas can benefit a company and increase profit. Many people also think that an innovation has to be a giant leap forward; but this too is rarely the case. In fact most innovations are incremental improvements to existing products and processes.

One way of rewarding innovative thinking is through an innovation scheme that rewards all employees who make an invention, even if it is their job to invent. The awards may be conditional, for example on a patent application being filed, a patent being granted or on the implementation of the idea. When setting-up any innovation scheme, you should appreciate that there may be associated risks. For example, some companies have schemes which make a payment to the inventor on the filing of a patent application and this type of scheme, if not properly used, could encourage a flood of under-developed ideas. You will also need to put some paperwork in place to explain the scheme to your employees.

Other ideas are to set aside a particular time of the week for innovative work (sometimes known as "Blue Sky" Fridays) and to use a particular space or environment to encourage innovative thinking.

If you have any questions you would like to put to an attorney, please e-mail asktheattorney@patentable.co.uk

Disclaimer: Please note that the above article is not intended as legal advice. Abel & Imray accept no responsibility for any actions that are undertaken as a result of reading the above article. If you have any issues relating to intellectual property we recommend you contact a Chartered Patent Attorney or Registered Trade Mark Attorney. Details of how to contact a local Attorney can be found on the Chartered Institute of Patent Attorneys website or the Institute of Trade Mark Attorneys website .