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Deal Me In

The inventor of the blue-light diode, Shuji Nakamura, has been fighting for some years now for a bigger piece of the profits from his invention. Since his original payment was about US $189, that’s easy to imagine. The New York Times article on the case is fine, as far as it goes, but it contains one very puzzling paragraph:

On patent filings, Japanese companies list their names above the inventor’s; Western companies typically file patents on behalf of their employees and pay them a percentage of the profits.

My readers around the drug industry are all going “Since @#$!*! when?” I can tell you that all you get at a large pharma company is a hearty handshake. Oh, if your drug does make it to market, it’s certainly good for your career, true. But a percentage of the profits? Not in the US. But there are places.

Take Germany, for example. Under German law, inventions produced by employees of corporations are still their property, which is transferred to the company in exchange for specific payment. There are all sorts of situations that arise from this (the link above will take you through them) but the result in the drug industry is that the inventors on a patent get a share of the profits from the marketed drug. Interestingly, a similar law has been proposed in the UK, and is now being debated.

This sets up some major struggles about inventorship, as you’d imagine. I’m told there have been some real brawls over the years. In a US drug company, being an inventor on a patent is quite desirable. But in Germany, it can change your life.

As someone who’s been an inventor on many issued patents, I can tell you that I’d certainly support such a system in the US. There’s a real case to be made for it, and not just by folks who could profit (hey, none of my patents has ever made a dime for anyone.) Over on The Bottom Line, fellow Corantean Arnold Kling has commented on the patent idea that was discussed in the post below (which he’d also noticed, just before I did.) He proposes a greater use of prizes as an incentive to innovation, which I think is a fine idea. A piece of the action would be a good start.