How to Set up a Patent Reward and Recognition System for Your Company

You’ve read Why You Need a Patent Reward and Recognition System For Your Company and now want to establish such a system to spark innovation and recognize innovative employees.

This article describes a two step approach to set an effective patent reward and recognition system:

  1. The first step is to set up a system to capture and document ideas.
  2. The second step is to create and implement an employee reward and recognition system, such as a patent reward and recognition system, that rewards innovation and recognizes employees who innovate to help motivate them to participate in the patent process. 

1. Capture and Document Ideas

A. Capture Ideas Early and Often

A patent reward and recognition system starts with capturing ideas. At the idea capture stage, you’re not determining whether the idea is patentable. Instead, you’re focused on capturing and documenting each idea. 

The best time to capture ideas is early in product development, such as at the outset of product and roadmap planning. This is because during this time ideas are new and typically not well documented. Also, since the value of documenting ideas might not seem intuitive and instead like extra work if management hasn’t reinforced the value of capturing IP and made the process part of the culture and a priority of the company, it’s important to designate someone for this role because there is a real possibility you might miss out on capturing company IP. And let’s face it, if you don’t document new ideas when they are first introduced, the likelihood of revisiting them decreases as time passes and new projects are launched.

Also, it’s important to note that the United States follows a first to file system, where the right to a patent for an invention is determined by the first person to file for a patent to protect that invention. Without this documentation or disclosure, the patent process may not happen or at least occurs infrequently, which opens up the possibility that your company’s idea might first be patented by a competitor who independently came up with the same idea.

One way to motivate employees to want to take on this responsibility is with a patent reward and recognition system. Such a system may motivate innovative employees to document and follow up on these ideas. The documentation ensures intellectual assets are captured. If the idea is captured, it may be documented, safeguarded, and turned into a patent. If a patent application is not pursued on the idea, the idea can be turned into a whitepaper or other article and published, and the publication can be used as prior art against competitors filing for patent applications after the date of publication. Also, keeping track of company IP is essential given how often employees move from one company to the next, and documenting the idea shows that the concept exists within the company and the company owns it.

Reviewing the ideas ensures engineering and management contemplates how these ideas fit within current product and service offerings, and whether these offerings are in line with the company’s goals. This exercise alone can help companies develop a superior product and better value proposition. 

B. Schedule Regular (e.g., Monthly or Quarterly) Meetings Purposely Targeted at Identifying and Capturing IP

In addition to capturing ideas early, meetings should be scheduled purposely targeted at reviewing product roadmaps to identify IP to protect. Encourage employees to think out several years and to imagine the path of the intersection of the industry and your roadmap. Some of your very best IP may be for products or features that will not arrive for several years.

C. Regularly Review Ideas From These Meetings to Identify Patentable Inventions

Form an invention review committee or work with your patent attorney to determine whether any of the identified ideas are patentable. Your patent attorney can review invention disclosures, product specifications or descriptions, and other documentation to help identify patentable inventions. If you have regularly scheduled meetings, such as product roadmap meetings or product review meetings, invite your patent attorney to attend to help identify IP worth protecting.  

2. Create and Utilize a Patent Reward and Recognition System

A. Send a Clear Message of the Importance of Protecting Company IP

I’m often told, in some form or another, that employees are not motivated to participate in the patent process because “the thing they’ve been working on for months doesn’t seem patentable” or “we understand the importance of protecting company IP, but we’re too busy getting products/service out the door to go through the process of filling out the invention disclosure document, participating in the invention disclosure meeting, and reviewing the patent application.”

To overcome this, management should convey the message that IP is important. This begins with management modeling a behavior demonstrating the importance of protecting the company’s inventions with patents or trade secrets from the outset of the conception and planning of products and services. This can include management:

  • Consistently communicating the importance of protecting the company’s intellectual assets to make it become a part of the culture and priorities of the company.
  • Communicating the use of patents to deter expensive lawsuits and/or patent licenses which may cause a company to shutter a project, company division, or the company altogether.
  • Attending invention brainstorming sessions to reinforce the importance of protecting the company’s intellectual assets.
  • Implementing a patent reward and recognition system to motivate employees to participate.
Motivate Innovation and Creativity

A  comprehensive patent reward and recognition system encourages and motivates innovation and creativity.

In general, a patent reward and recognition system is used to incentivize employees to prepare the documents that disclose their invention and go through the patent process. A reward and recognition system may include financial rewards, plaques, patent festivals or celebrations, and the like. 

In this section, we’ll look at the “reward” and the “recognition” aspect of a patent reward and recognition system. 

B. The Reward

The reward might be a cash bonus. For example, a company may give a set amount of money split among the inventors of a provisional application, with more money for a nonprovisional application, and even more for a granted patent. Another type of reward can include something to display on their desk or in their office such as a trophy, plaque, and the like. 

Whatever the reward may be, before launching any such program, some key issues should be considered such as: 

  • What is the inventor reward amount to be paid? 
  • Is the reward per invention or per inventor? 

Let’s look at an example. Company A has a patent reward and recognition system that gives a $500 reward for submitting an invention disclosure, $1000 reward when a patent application is filed at the United States Patent and Trademark Office (USPTO), and $1000+ when a patent issues. These rewards can be spilt between all inventors or can be the amount given to each inventor. 

Company B has a mixed approach. Company B’s patent reward and recognition system gives a $500 reward for submitting an invention disclosure, a trophy when a patent application is filed at the United States Patent and Trademark Office (USPTO), and a second trophy when a patent issues. 

There are many other questions to consider such as “when do we pay the reward?”, “do we pay the same amount for every invention or does it vary depending on the  importance of the invention?”, “are nonemployees eligible?”, “how are rewards communicated to the inventor(s)?”, “who is the company administers the reward and recognition system?”, and so on. 

Keep it Simple and Consistent

Whatever you decide, a good rule of thumb is to keep it simple and consistent. 

C. The Recognition

An effective patent reward and recognition system should ideally recognize employees for their innovative contribution through the use of luncheons, annual inventor reward dinners, special parking privileges, etc. If your company operates a newsletter, include a special section to recognize inventors, or designate an area of the company for patent reward wall plaques. Consider company-wide recognition of the top inventors, for example, based on exceeding a threshold number of granted patents. 

No matter how you structure your system, keep in mind that a good patent reward and recognition system encourages employees to capture ideas and continue through the patent process. Your employees are committed to the company’s growth, and whatever system you have in place should show how much the company truly values and appreciates employee innovation. After all, it is that innovation which drives the company’s success and the inventor should share in that success, so long as there is a fair estimation of the value of the invention and its contribution to the company.

Questions or Suggestions?

It’s important to me that this article is helpful to you. If you have any questions on the article or suggestions for further clarification, please reach out to me and let me know.

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