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Patents and IP

Compensating Inventors: Good Idea Or Not?

As an inventor of a new drug here in the US, you are most certainly on the patents that have been filed around it. What do these patents earn for you? Well, in the US, they earn you a hearty handshake (like the one that W. C. Fields used to get when he stopped a bank robber). And this is made clear when you sign up with a company: you assign the rights to your inventions to the company, and if you don’t wish to do that, you can go somewhere else and do something else for a living. You may well get a raise or a promotion on the strength of your work (or not!), but the fact of being an inventor on one of the few lucrative pharma patents has no direct effects.
That’s not the case in many companies. Germany, for one, is well known to have a patent remuneration system: under German law, those listed as inventors on a patent are entitled to compensation, and that includes a share of the profit that an invention generates. France is somewhat similar, and several other European countries have at least partial compensation as a concept in their patent laws (here’s a PDF on the topic). Those variations are complex: in some cases, the invention has to be of “outstanding” value, and in others, the compensation is not automatic, or the inventor has to demonstrate that their salary, etc. was not fair remuneration for the value of the invention to their employer. Germany is pretty clear-cut, though.
And in recent years, China has put in a similar system. Chinese patent law is not for the faint of heart, that’s for sure. It’s still an evolving system, since a coherent intellectual property regime was not a priority during most of the last century. Large regulatory changes are still taking place, and doubtless will do so in the future. And it’s a lively area, because Chinese companies sue each other with great vigor and frequency over IP issues, which can mean a lot of court decisions to keep up with. No, you’re going to want to pay some hard-working folks a lot of money if you want to get seriously into Chinese patents. Even then, you will be afflicted by doubts as to how much protection these patents afford you.
In 2010, Chinese patent law changed, and one change was the emphasis on inventor compensation. The law states that the inventor or inventors should be paid “a reasonable rumuneration” based on the use of the patented invention, and it was also stated that this applies to all businesses that have Chinese patents, regardless of the nationalities of the inventors. I’m not sure if it’s been completely worked out in the courts what “reasonable” might mean. That link above goes on to mention that other clauses of the law have it that a company should have a set scheme for remuneration in its contacts with its employees, or a standard corporate policy on it. If nothing like that is in place, the inventor is supposed to get no less than 2% of the annual profits. Definitely worth knowing about if you’re doing business there.
Discussion of these compensation plans always comes down to a discussion of inventorship. That can be a bit contentious in the US, but such disagreements are nothing compared to the elbow-throwing under the German system (as can be easily imagined). Not too many drug patents ever make money, but the ones that do can make vast amounts, and being an inventor on one of those is very desirable indeed. What happens, I believe, is that a separate bureaucracy develops just to make sure that all questions of inventorship have been settled correctly. Did you make the “inventive step”, or were you just carrying out the inventive step of someone else? Did your contribution rise to the level of such an inventive step, to start with? How well did you document that? And so on.
At one time, I thought that the inventor-compensation idea was hard to beat. I still wouldn’t mind the money, should I happen to ever get on a patent that makes some. But over time, I’ve come to wonder about the downsides. Under such a system, there is less incentive for people to throw ideas around in an informal setting. Those lead to disputes about just who said what and when. No, you tend to keep those ideas to yourself until you can get them written down and dated, with your name on them, and I can’t help but think that this puts a bit of sand in the gears of discovery. If you’re always watching your back, that level of inhibition might be enough to keep you from having as many ideas as you might, in general – it doesn’t take much.

68 comments on “Compensating Inventors: Good Idea Or Not?”

  1. Wage_Slave says:

    Sounds like a real can of worms. So who is the key player here, the biologist who identified a target that made the screen possible?
    The molecular modellers / X-ray group who identified the space your new molecule should inhabit?
    The purification group who turned your black tar into a screenable sample?
    Your pattent attorney who made sure that the molecule was covered by your organisation?
    The head of department, who was last seen in the lab years ago but who commisioned the project?
    Perhaps a whole new field for litigation lawyers!

  2. Anonymous says:

    Intellectual property is still property and I think you misunderstand the relationship between capital and labor in this country. Does a person who works at a GM factory get to keep a slice of the profits from the cars he puts together all day? No. And neither do inventors who work for companies and produce intellectual property.

  3. m says:

    In Merck Kgaa (worldwide) there is a similar remuneration system to that stipulated by German law. It is very motivating. Though you never know if any of your inventions ever generates multimillion profits (cause that’s when the compensation becomes really sweet).

  4. exGlaxoid says:

    I have seen some pretty horrible things done by people to be an “inventor” under the US patent laws. One manager used to go to brainstorming sessions by the group and take copious notes which he was later found to be writing all of into his lab notebook and having witnessed as his ideas, should any of them ever come up later.
    Another person successfully decided to look at the substituents that each person had made in a molecule and then the cores that were reasonable and then just make only a few compounds based on the SAR which should be the most active. Sure enough, one of them was by far the best molecule made yet, which several of the people had been planning to make, but since this person documented the synthesis of the molecule first, he was automatically added to the patent.
    He even tried to have the others removed from it, even those who did all of the chemistry route design and enablement, which included a novel route, which was key to the patent being issued. A few years later, most of the people involved in the successful project that went to the clinic and made a lot of money were laid off. But this guy at least had cemented his name on the patent, which helped him quite a bit.
    Other managers have similarly tried to claim that people who did 100’s of the reactions to exemplify a class of compounds should not be authors, qhich I could see if they had just made simple compounds by a simple route, but in most cases, they had to develop the chemistry routes and improve the conditions to make them useable. But I routinely saw high level managers names put on patents solely because they approved the project, but had no intellectual contribution.

  5. RD says:

    I have found that the pressure to patent and be top dog on papers has already put enormous pressure on American scientists to exclude others from getting credit. This is especially true when layoffs are coming and everyone knows it. The temptation to exclude others or steal credit is very strong. Your scenario has already happened, has been happening and will continue to happen as long as there is competition on steroids here in the US for jobs. From my observation, it’s already so fierce that crediting your coworkers with anything may be seen as diminishing your own contribution. It’s especially hard on structural biologists and modelers who are frequently seen as merely service providers and whose suggestions for modifications are often overlooked when it’s convenient.

  6. Anonalso says:

    @2 — Actually, the worker at the GM factory does get a slice of the profits — it is called profit sharing.

  7. Anonymous says:

    @3: Given that Merck KGaA hasn’t invented anything of value for decades, you’re not making a good case for profit share as an incentive!

  8. A Nonny Mouse says:

    I understand that Pfizer was quite generous on this front, but only by hearsay (from a prof who consulted for them). I don’t think that is was publicly announced, though.

  9. eugene says:

    This reminds me of the story of this year’s Nobel prize winner, who sued his former company for compensation because he was on the patent for the blue light diode, but got some measly sum for it. The court awarded him 180 million dollars, but the company appealed and they settled for 9 million. Still, a lot more than the Nobel prize amount.

  10. Anonymous says:

    If you’re paid a salary with the expectation of inventing stuff then there should be no expectation of any additional profit or bonus.
    But then again, if you are *already* paid a salary, but won’t get any bonus or incentive for inventing stuff, then why should you bother? Or if you do invent something you may as well leave the company and take the invention with you in secret to start up on your own.
    Hence, it makes sense to have at least some reward/incentive in place for inventors, to stop people joining and then just sitting on their hands, or disappearing when they do come up with something of value.

  11. jtd7 says:

    ” . . . And a copy of our calendar, Springtime in Lompoc.” I think of that scene often.

  12. Russ says:

    Dupont used to have a policy that (once the development costs were paid) the inventor got a share of the profits. The inventor of the sulfonyl urea herbicides did pretty well.

  13. Douglas Kell says:

    Good post, setting out at a high level some of the pros and cons of this. As written it was aminly about industry. In academia inventors are usually quite poorly recompensed, even though only a VERY small fraction of University income comes from royalties (MIT leads, at ca 2% of income). Universities would be wise to incentivise their employees accordingly…

  14. Anonymous says:

    Most universities have established percentages going back to the inventors (I think it varies from the single digits to the teens). A certain percentage also goes back into research in the form of funding for the inventor’s group. This sort of structure is pretty standard. The situation is way better than what you would find in industry for all of academia’s other faults.

  15. Justin says:

    It’s bad in academics too. Depending upon the state or university, inventors can receive a portion of the proceeds (royalties) from the out-licensing of the patent. This can be a big chunk of change for an inventor (up to 40% of the royalty in a system I’m familiar with). Since the payments are split between the listed inventors, there is an incentive for disingenuous professors to not include, marginalize, and outright lie about students’ intellectual input. Students are either kept in the dark about the payment system or too afraid to stand up for themselves.
    I’ve witnessed students being screwed like this, and yeah, it makes me mad.

  16. marcello says:

    Guys… as far as who gets to be on the inventor list – there are actual legal definitions there and having people just added can easily invalidate patent in court, if push comes to show. I completely agree that once you’re expected to generate intellectual property you should not expect to get rich off the patent, but small bonuses, e.g. $500-1000 are motivational indeed. Interesting issue however is the inventive (or not) role of the biologist that identified the target, but that usually happens outside of the pharma company anyways….

  17. steve says:

    Interesting concept. What happens when a patent reaches the international phase? If you’re an author on a patent and it is approved in Germany or China are you then supposed to receive compensation under their laws?

  18. Anonymous says:

    We still get a cut of the pie in academia if we file a patent, why is industry different?

  19. Anonymous says:

    @18: Because industry is greedy for profit, and paying somebody a few K bonus detracts from the profit and sets a precedent for others to detract from the profit.
    I love how my employer makes big announcements to congratulate us and make us feel good about how much profit we made, when the profit is actually what’s left over for shareholders *after* they’ve deducted what we get.

  20. entropyGain says:

    It takes a team. Sounds like many of the examples above don’t really recognize that.
    The correct compensation is equity in the venture. The merchant sailors circumnavigating the globe figured that out hundreds of years ago.
    Problem is in a big company, your equity is such a small fraction of the total venture it is not tied to your efforts. In a small company, you sink or swim together, and even the interns can make a big impact.
    When everyone from the receptionist to the guys keeping the building running know they’re part of that same team, the place works. When prima donnas are allowed to become feral, it doesn’t. Pretty simple really.

  21. anon the II says:

    I’ve got a pile of silver dollars they gave me when I worked for Wyeth/Ayerst. I also have some crisp dollar bills with some kind of stamp (notary?) on them. What you got depended on the lawyer. About 25 years later, one of those patents got me a nice retainer from a law firm. I signed away my rights when I joined the company. I think I prefered it that way. There was enough of the crap described by #4 going on that it’s frightening to think what some of those middle managers would do if there was money involved.

  22. Anonymous says:

    @20: The problem is that not all team contributions are equal, so it’s actually not that simple. Especially when you consider that some members of the team are commodities, completely replaceable (or even loseable) without any negative impact, or perhaps even with a positive impact.

  23. anonymous says:

    At Abbott (pre-AbbVie)they would give us a dollar bill when we got a patent. I shouldn’t complain, but you’d think they would give us crisp new dollar bills suitable for framing, but no, they were ratty old heavily-circulated things.

  24. anonymous says:

    This is anonymous @23 again. Now that I think of it, the dollar bill was when we signed the patent. If & when the patent was issued, we did get $500 worth of stock.

  25. JAB says:

    At NIH intramural inventors get a cut of royalties, and the lab gets some extra funding. The biggest example was the HIV blood test developed by Gallo et al in the 1980s. It brought in millions after it was licensed. The HPV vaccine is a more recent example. They’ve even recently created an Invention Development Fund with some of the royalty money that one can compete for to advance early stage projects covered by patents.

  26. Anonandon says:

    I know of a place where the Head of Chemistry gets on each patent as an inventor as a privilege of his position. Marcello’s comment @16 is a worrisome time-bomb and one that has been discussed at length further down the slippery pole…

  27. Barry says:

    remuneration policy affects not only corporate bureaucracy, but corporate culture. In Sandoz–when it had both NJ and Basle research stations–that meant that researchers in NJ would go to lunch and draw all over the tableclothes like a bunch of chemists swapping ideas. But in Basle, researchers would lock their notebooks in their desks, go to the cafeteria and chat a bout sports. Because it was important to be the sole inventor on a lucrative patent, scientists were disinclined to share ideas. The result wasn’t subtle. Much more innovation came out of NJ than out of Basle. I presume the story was the same at Roche, Ciba, etc.

  28. Joe Q. says:

    I work in industry, not pharma though. We get small bonuses at the time of filing, not when the patent issues. The small bonuses add up and large patent counts look good on resumes so there is a real risk of either inventor creep (you add me, I’ll add you) or actual patent creep (patenting useless stuff) — both of which are either commercially or legally problematic.

  29. Cowardly Lion says:

    Just thinking of all those BS genomics and bioinformatics patents issued in the early 2000s…

  30. Anon2 says:

    I think you should ask yourself, why is this such an interesting question to begin with? The answer is likely that a piece of you feel you are not fairly compensated relative to others in an organization. When you have an IP lawyers pulling in 200-600k (and then hand wave when they lose their case) it makes you wonder why you are not valued at an [at least] comparable level.

  31. Anonymous says:

    This also has implications for innovation in small biotech vs large pharma, since the reward for any innovation is massively diluted in a larger organization.

  32. NoDrugsNoJobs says:

    Makes a lot more work for patent lawyers and lots more trouble on the teams I suspect. As others have said, isn’t everybody on the team important whether an inventor or not? Also, many patents are filed along a development cycle, how do you assign value from the compound patent to the formulation patent to a dosing patent, etc – What a nightmare to keep track of.
    The reality is that most medchemists will never be an inventor of a “drug” but we get paid well anyway. Its the nature of what we do and honestly, if you are not incentivized by the thought of how wonderful it would be to be part of a discovered drug than you may be in the wrong line of work. The accomplishments we have in our work are not memorialized by money but rather the value we place on them in terms of our own personal goals. If you want to roll the dice, join a small start up and if you make a drug, your stocks will be worth a lot of money!
    Some US companies have done a great job of recognizing their creative scientists and others have crapped them out – some companies are good and others are not.

  33. A Nonny Mouse says:

    Macapra (university of Sussex) made a lot from chemiluminesence patents and Tom D’Ambra [AMRI] made a fortune from his “more pure form” fexofenadine patent.

  34. Anonymous says:

    @20 equity? What equity do you actually own? You’re in a company’s lab using their equipment and resources getting paid by them in exchange for that work they pay you. So you’re using all their stuff to produce IP which is actually your job for which they pay you. Incentives make sense but I don’t understand arguments that originate from entitlements based on supposed rightful ownership of IP vs a company.

  35. Chrispy says:

    I am listed as an inventor on a number of patents that unlisted people had much more to do with bringing to fruition than I did. I just happened to be a key figure in the development of a few particular claims. I am glad that I only got a dollar for each of these as it would otherwise have been embarrassing.
    Although it seems counter-intuitive, cash bonuses are one of the most demotivating incentives around. These systems are always gamed, and they corrupt the culture of innovation that gives rise to invention. Those who suggest that giving everyone ownership in the company, to succeed and fail as a team, are on the right track.
    The problem, of course, is in the big companies, where the executives have gobbled up the vast majority of compensation and stock options. This might be a big part of the reason that large companies have such trouble with innovation.

  36. anon says:

    Lets just all be grateful that the money isn’t so great that our “best and brightest” come to pharma and instead go into finance where the money is quicker and easier without usually requiring 10+ years of schooling! plus you don’t actually need make a product , just gotta shuffle shit around then blame the economy when you lose money!
    Luckily Google is saving pharma for us! (although I do at least appreciate their intent, if not the apparent quality of their work)

  37. Ted says:

    A significant part of the appeal of my new, non-pharma position is the position my company takes on patents. Keep in mind I spent just shy of 20 years in pharma/biotech and have the layoff/merger wreaked resume to prove it…
    Inventions of potential value are patented. If the patents are issued, there is a cash sum payout (typically in the four to five figure range) and access to (generally a single digit percentage) the royalty stream for the inventor. This removes commercialization pressure from the inventor, and allows them to focus on their core skill set. If you generate enough ideas, and the invention capital market exists, then everyone can benefit. We are frequently referred to as a patent troll.

  38. alig says:

    Wait, so if I am an inventor on a Chinese patent post-2010 for a drug that gets sold in China, I am entitled to 2% of the profits? I need to check out if my drug has been launched in China.

  39. TryingToBe Rational says:

    Once upon a time I invented a process that is used in most of the PCR reactions around the world. My former employer took in tens, probably hundreds, of mullions of dollars every year in royalties. I got nothing, per my employment agreement. Fair enough.
    But of course people in the executive suite get to make rules for themselves that do not apply to us. One of them is that they award themselves bonuses based on the profitability of the company. So even though there is no contractual obligation to do so, they are rewarded based on the work of those of us in the trenches.
    I come down not on the side of sharing profits with inventors, because of the corrosive effects on cooperation. (My invention would never have gotten reduced to practice without another group making the necessary enzyme, but they were not inventors.) My impossible dream is that our highly compensated executives will content themselves with their big salaries and fancy travel and restaurant meals and gold plated retirement plans, and give us inventors more credit for their company’s success.

  40. Lyle Langley says:

    @27, Barry…
    It was the same at Sanofi (Sanofi-Aventis). US based researchers did not get compensation for drugs on the market and the culture was very open. The German/French sites did have compensation and were not as open. I remember when one of our projects was transferred to Germany due to a restructuring the project soon died because the patents on the advanced compounds were in the names of the US workers and there was going to be a low chance of compensation for the German chemists.
    Most universities have some form of compensation. At the university I currently work at, the inventors get 40% of the royalties (license fees, sales) that the university receives. This can be very lucrative on a 10-20M license fee – the inventors can be splitting somewhere in the 4-8M range. It does become quite difficult at times as some universities only compensate those on the patent (chemical matter, for example) and nobody else. It’s not unheard of for someone to take home a 500-800K “bonus”. It’s difficult sometimes to explain how an inventor is different from an author and that is when a strong Tech Transfer department can help (although, I don’t know of too many “strong” departments out there).

  41. Anonymous says:

    @39: Executives are rewarded for hiring and managing drones like us that will add great value while giving us little back in return. That’s how they make a profit, and that’s why they are rewarded.

  42. Greg Hlatky says:

    Even though I might have cashed in on a patent I was an inventor on, I don’t think compensation is necessarily called for.
    For one, I’m not the guy paying for patent prosecution, national filings, maintenance fees, fighting opposition, etc. Over the lifetime of a widely filed patent, this can be as much as $2 million.
    For another, paying royalties can stand in the way of innovation. From what I’ve heard, senior R&D management and/or staff resist patenting new technology that can take away their rice bowls.
    Third, it ends up causing enormous pissing contests over who is and isn’t an inventor; one German IP attorney told me most of his time was spent ironing out these disputes.
    Companies should, I think, compensate inventors generously for assigning their rights to the company but the royalty thing would end up being more of a pain than its worth.

  43. Chemist says:

    Re 26 my understanding of patent law (I’m not an attorney) is that having the wrong inventors invalidates a patent. If I was a generic Company challenging a patent from an outfit where the head of department was on every patent I would want to look very closely into his/her contribution.

  44. pnollert says:

    Regarding profit sharing in academia: the UC system granted, in 2000, a 33% share on royalties derived from commercialized patents.
    The patenting process though wasn’t really pushed by UC at the time. Some inventors just published without thinking about commercial value and hence relinquished any royalty stream. Taking things into your own hands was crucial though: timing patent application / public disclosure, walking to the Office of Technology transfer, doing some additional legwork (i.e. find out who should be contacted to inquire about licensing interest and finding sponsoring organizations) and actually writing drafts for the application. Great opportunity for budding scientists to learn about adjacent fields.

  45. Anonymous says:

    I dislike having US law define a business relationship. Another thing to think about, why are the inventors special? I see their special status from a patent perspective, but from a drug development perspective, are the people in manufacturing or tox or clinical less critical to a drug’s success? If the vast majority of drugs fail in the clinic, would the chemist feel ok if profit were shared only with those who worked on the clinical development?
    I like profit sharing in general. It certainly should not be US law. However, pharma should share profit with their employees as reward for working on a project that is successful, but interpreting this to remunerating inventors is too narrow and unrealistic an understanding of the industry.

  46. daveh says:

    I work in drug delivery technology and have been granted many patents and got some plaques.
    The whole situation is aptly summarized in biblical fashion.
    Timothy 6:10
    For the love of money is a root of all kinds of evil.
    It applies to colleagues, executives and subordinates. Even IP attorneys…I just “invented” something last week for the company I was terminated from 4 years ago.

  47. hypnos says:

    The critical point is that there are quite a number of people who contribute to a given research project without being an inventor in the sense of patent law: you need people who run (standard) assays in a timely and reliable way, who purify and qc compound samples, etc. Telling those people that they can not be on the patent due to some arbitrary legal definition of “inventive step” is actually a disincentive and can be a challenge to teamwork.

  48. biotechtoreador says:

    Seems that giving inventors a share of profits is what capitalism is based on, i.e. rewarding innovation. Certainly this is how the hedge fund industry works—make $ on your positions and get a lot of $$$ in bonus: lose $ and you’re out.
    Clearly issue here is how to recognize subsequent, more quotidian, tasks like preclin and clin work. Also, recent case of Mark Charest suing Harvard over royalties would become more common.

  49. Anonymous says:

    Shouldn’t the guys in development be rewarded more for delivering conclusive data, pass or fail, rather than for any intellectual property in the drug itself which ultimately comes from research? Or do we want to incentivize them to push failures into Phase 3 at even greater cost?
    Rewards for invention should reward invention, not following some standard process as part of their bloody jobs. And that includes identifying known compounds by screening robots.

  50. anon says:

    On this subject… does anyone know what happened with the Myers-Charest patent dispute?

  51. DrSnowboard says:

    As others have said, there are strict definitions of what constitutes an ‘inventor’. which usually translates to ‘would this patent exist without my contribution and can I describe it in words’ . I agree it can be divisive if you let it, but we’ve always circulated a request for inventorship form around the whole project and then let the patent lawyer decide without outside interference. After all, they are going to be the ones defending it. I used to take a similar attitude to posters and papers , usually written by the biological side of the project. If I couldn’t point to what I did to enable that poster, my name wouldn’t go on it.

  52. entropyGain says:

    @34 – I don’t think you get my point. We (scientists) own everything in our company (at least for now). We own if we fail too!
    @23 – not everyone gets the same amount of equity in a startup. If you need to make adjustments, you adjust. There is no room for someone who has negative contribution.
    My point was ownership is the right form of compensation in a small company, but it doesn’t scale.

  53. Zippy says:

    Providing compensation to inventors will further complicate the difficult and contentious process of picking the compounds to progress into development. Adding non scientific considerations to this process can only hurt overall probability of success.

  54. Anonymous says:

    @53: Probablility of success probably woun’t change, but the failures would fail later if people are incentivized to push for success.

  55. steve says:

    I still would like my question answered if anyone knows. If I invent something in the US what happens with the foreign filings? Once it’s approved and on the market in Germany am I then owed part of the compensation because of German law or does that only apply to German inventors? Seems to me that I would then be an inventor on a German patent and German law should apply even if I’m in the US.

  56. Anonymous says:

    @55: It only matters which country you are employed in, and what your employment contract says, not where the patent is filed.

  57. Anonymous says:

    … in other words, German law applies to German employees, not to German patents filed by foreigners.

  58. Anonymous says:

    …because we’re talking about employent law, not patent law here.

  59. Derek Freyberg says:

    As a patent attorney for 30+ years, I can tell you that dealing with inventorship is a pain: you know you have to get it right (or at least not wilfully wrong) for the patent to stand up.
    At my first company, non-pharma, in the late 70s and early 80s, we paid named inventors $100 on signing the assignment – the idea being as much a thankyou to the inventors for working with the patent attorney on the application as a reward for inventing. I don’t recall an inventorship dispute.
    Later, in big pharma, we paid $1 – assignments of the time used to say “for $1 and other good and sufficient consideration”, and if that’s what the assignment said, we’d darned well better pay the dollar: nominal consideration is fine, sham consideration is not.
    At the last, startup pharma, we paid nothing – the assignment didn’t recite the dollar and so none was paid. And yet it was there that the complaints about not being named/someone else being named were loudest. I guess it represents a change in culture over time, but I’m not sure.
    If I had to set up a scheme, it would have a modest payment on filing, like my first company. If there were also a bonus pool of some sort, I would not have it tied to patent inventorship, but rather be divided among the people whose activities were critical to the success of the project – these would almost certainly include the named inventors on the patent(s) but might well include others.

  60. Garrett Wollman says:

    I wonder if perhaps the business-law people might actually be able to provide a better answer here. If the right sort of compensation is equity, could a creative (but non-startup) company find a way to structure their business to give the relevant personnel an equity stake in the products they help to develop? Dilute the employees’ share based on how much additional investment it takes to bring an product (or line) to market. This would be a big cultural shift, but would effectively mean managing a big pharma company like a venture fund. Seems like it might at least be tried, anyway.

  61. Anonymous says:

    Seems to me that, especially in drug discovery, who it rewards will be pretty random depending if one of the compounds you made hits it big. For every blockbuster drug there are many failed candidates, but the people who made and tested the failed candidates did largely the same work as the people who made the eventual blockbuster. Are you a better person, deserving of more compensation, because your compound turned out to be the one that worked, even if you could not have known that ahead of time?

  62. Anonymous says:

    @60: Yes, share options can be awarded for inventions, triggered when certain milestones are met, and then go up or down in value depending on the company’s success. All sorts of strings and mechanisms can be added to ensure alignment between input, costs and performance at all stages. But ultimately the shares are tied to the value of the whole company, unless you set up the project as a separate company controlled by its parent.

  63. m says:

    @7: I suggest you check the facts. There is a 60% chance that the screen you’re looking at is made of Merck kgaa liquid crystal materials. Is this insignificant?

  64. a. nonymaus says:

    A simple idea for compensating inventors: remove the validity of permanent patent assignment in the absence of ongoing compensation. You would still be able to assign a patent to your employer, but if you quit, you can take your invention with you.
    The argument about compensation hindering collaboration also applies between firms as well as between individuals. Perhaps this means that we should do away with patents entirely, since they inhibit sharing of information between companies?

  65. Anonymous says:

    As I don’t believe there is a strong correlation between the performance/capability of those that worked on successful drugs and failed drugs (at least those that passed the phase I), greatly rewarding them with a patent ownership or otherwise would mostly be rewarding luck and create a variety of negative incentives and messy issues.
    The two things I can see working for them though is 1) to allow them some job comfort by giving them first grabs to projects that branch off the successful drug 2) greater exposure to the later stages of drug discovery for which experience is probably fairly limited. How these correspond to actual rewards is up to the company.
    These are both things which are both directly related to the work and create far less “first!” issues as with patents. However, if the benefits are too strong, it risks pooling too much effort/personnel to past successful projects rather than new ones which will lead to increased stagnation among other things.

  66. Hap says:

    It isn’t my job, but it seems like rather than trying to compensate inventors, it might be better if people who helped make a product were given some sort of respect by their employers. Part of the problem is that it seems like people get little or no credit or recognition when they actually create something useful, and in the case of smaller companies, creating a useful lead and potential product can get you laid off as the company focuses its money on getting the potential product to market. I understand it’s people’s job to find drugs, but when the best-case scenario for making something useful is being ignored, and the worst is being canned, that can’t help productivity much.
    Recognizing people through the legal system has a chance of getting inventors something useful but seems more likely to turn into a morass for lawyers to make money in and for employees to get hosed in. It also seems like a way to make people annoyed at their jobs and companies. That doesn’t seem helpful.

  67. yuri says:

    Imagine a scenario where Chinese law demands payments to inventors and also requires any expats who receive royalties to file tax returns, much like the US requires now. (I gave up green card several years ago…). I can imagine that this might lead to a lot of separation in families.

  68. yuri says:

    Imagine a scenario where Chinese law demands payments to inventors and also requires any expats who receive royalties to file tax returns, much like the US requires now. (I gave up green card several years ago…). I can imagine that this might lead to a lot of separation in families.

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