27 Mar Who Owns an Employee’s Great Idea?
Let’s say one of your employees comes to you with a great idea. The employee tells you over the last eight months she’s been working on solving a really perplexing challenge your firm has with an old product. It’s not even in her job responsibilities, but she felt she could improve the product and make it really marketable again. So now she tells you this brilliant idea, and you know it’s a winner.
If you have an active suggestion program now, or if you’re planning on launching a suggestion program soon, this is a question you need to answer right away. If you have no suggestion program, it’s still a question you need to answer — and communicate the answer to employees.
Ownership
The issue involves “intellectual property rights.” Ownership of an idea or invention doesn’t usually come up in the workplace because only a few ideas and inventions have substantial potential for high financial returns. But when an idea or invention is potentially worth thousands of dollars, the employee who dreams up the idea or invention will want to share in the wealth. That is, unless, ownership of ideas and inventions is clearly established before the employee applies her or his creativity in the workplace.
The almost universal rule in the United States and other industrialized countries is, the employer owns the rights to ideas and inventions of employees — when the idea or invention was created by the employee on-the-job or when using the employer’s facilities, equipment, and/or data.
Most often, this policy is formally applied with employees at research universities and in research and development departments in industry. Cambridge University, in England, for more than a century allowed its scientists to keep the rights and profits to their inventions. However, this changed several years ago when the university adopted the policy making Cambridge the sole owner of intellectual work done at the university.
And a conflict over who owned the rights to an invention finally was resolved in Cocoa, FL. Some city employees designed a new method of removing hydrogen sulfide gas from the city’s drinking water. The employees patented their invention. The city (estimating the patent would bring in $300-million in licensing fees) sued the employees for ownership of the invention. The city and the employees now jointly hold the patent.
What to Do: Consider adopting a policy which clearly tells employees the employer owns the rights to ideas and inventions the employee comes up with on-the-job and/or while using the employer’s facilities, equipment, and/or data. Include the policy in your employee handbook.
The policy might include language like this: “All ideas submitted to the employer by employees become the sole property of the employer. Any materials, processes, discoveries, copyrights or inventions relating to the employer’s business, products or services… and developed by employees during employment with the employer… and/or while using the employer’s facilities, equipment, supplies and/or information… are the sole property of the employer.”
Most Important: Have the exact wording of your policy developed by an attorney. Then, insert the policy in your employee handbook and communicate the policy to your staff members. This is especially important if you have employees who, as part of their normal duties, do research and development to improve existing products and services or to develop new ones.
[NOTE: Information and guidance in this story is intended to provide accurate and helpful information on the subjects covered. It is not intended to provide a legal service for readers’ individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]