Stimulating Employees to Invent
EXAMINERS’ ROOMS,U. S. PATENT OFFICE
(Concluded)
JOSEPH RO S SMAN’ United States Patent Office, Washington, D. C.
H E fir,ct part of this article (4) on the policies followed by large corporations to stimulate their employees to think creatively and invent, dealt with the active measures taken by some companies to stimulate inventing, and with the reIvards and other incentil-es offered to inventor employees. This concluding part of the paper deals with suggestion-reward and other methods of stimulating inventing, and with the question of employment contracts.
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Suggestion-Reward Systems Thirty-two companies reported the use of some sort of suggestion system for stimulating ideas and inventing by their rank-and-file workers whose duties usually do not require any inventive efforts. The growth of suggestion systems in American industries is of comparative recent origin although suggestion systems were in use in some plants twenty or thirty years ago. Of the very few studies made of the effectiveness of this method of reward, the comprehensive reports of Dickinson ( I ) may be cited; he analyzed tTventy-six going plans. The original purpose of the rewards was for stimulating patentable inventions. However, very few patents have resulted from this means, and rewards are now made for any useful ideas relating to any phase of the business products or methods. S o complete figures are available on the extent of the use of suggestion systems. Dickinson refers to a survey made of 195 companies which indicated t h a t 54 per cent used suggestion systems. The present survey of 233 companies revealed that only 13 per cent of them used suggestion systems. I t is not possible to conclude that this indicates a decline in the use of suggestion systems because there is no may of ascertaining whether the same companies were included in both surveys. The impression gained from the comments is that suggestion systems are losing in favor. Dickinson found that a low standard of acceptance for reward tends to elicit a high volume of suggestions. B policy of this sort is financially possible only when the average size award is low. He found that the inventive ability among the 1
Present address. Marathon Paper hlllls, Rothsohild, Wia.
mass of suggestors was low. (Dickinson states that during 1925, out of four thousand suggestions made in the General Electric Company’s Schenectady plant, not more than five were patented.) The present study also confirms this tendency. Today most of the patented inventions are made by comparatively small staffs of engineers and other research workers. Dickinson found, as in the present study, t h a t the usual standard of payment is about 10 per cent of the estimated first year’s savings. He also found that there was a tendency on the part of companies to give a maximum reward of $50 or $100 even though an idea might save thousands of dollars a year. Dickinson states that “there is also a growing body of testimony as to the efficacy of more or less collectivist incentives (especially those supplied by employee representation and union management cooperative schemes) to secure and use workers’ constructive ideas.” H e states that the Baltimore and Ohio Railroad cooperative committees reported more than three hundred suggestions per thousand rank-and-file workers; 80 per cent of them were adopted. This compares favorably with individualistic, cash reward systems. N o company supplying data for the present study reported the existence of such collective incentives. Dickinson states that, if snggestors could be adequately imbued with the spirit of team work and adequately motivated, some administrative machinery would be necessary (1) for using the suggestions and the educational opportunity they afford to instruct most suggestors as to how to improve their ideas, ( 2 ) for recording each employee’s suggestion history for consideration in determining his status, and (3) for sharing among groups of employees the profits accruing from good suggestions. Such a plan should operate effectively where large research and engineering qtaffs are employed in developing inventions because many individuals must cooperate to produce the perfected invention. The cooperative spirit is encouraged and a t the same time the individual who has creative ideas receives personal recognition by promotion in pay or greater responsibility in the organization. One or two examples will be given to illustrate the machinery of the suggestion systems. The plan usually involves the use of suggestion boxes, conspicuous posters, and bulletins to arouse the interest of the workers, and various printed forms depending upon the plan followed. One or more persons are
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DECEMBER, 1935
IYDUSTRIAL APJD ENGIfiEERING CHERIISTRY
assigned to receke, record, and inyestigat’e the suggestions, and a suggestion committee determines the awards. T h e success of any suggestion plan depends largely on the methodE used t o sustain t,he interest and creative effort of employees. This is usually accomplished b y placing no restrictions on eligibility, continuous and varied publicity on the plan, prompt coiisiderat,ion of suggestions, assurance of impartial and fair treatment such as by concealing a suggestor’s name prior to a final decision, consideration of the suggest,ions by a suggestion committee comprising a specialized staff nieinber and a n employee’s representative. The scale of armrds is also an important factor in arousing interest. The following is a n outline of one plan non- in operation: 1. THE SuGGEsrIox PLANPOSTER is posted on all bulletin
boards and gives complete information about the type of suggestions desired and the classes of awards. BOXESare located at various pjiints through2. SUGGESTIOS out the plants, generally near the time clocks. rhese carry a place for suggestion blanks, a poster shon-ing the line-up of the plan, a space for news bul1et)ins concerning suggestions, and a place to deposit the suggestions. BLANKSare found at the suggestion boxes; 3. SUGGESTION on these the employees write their suggestions and deposit them in the place provided at the boxes. These are collected periodically (usually once a week) and sent to the secretary who sends the employees an 4. ACKXOT~LEDGMEXT of each suggestion, and after making a record of each suggestion, passes the original on to the investigator. The investigator makes a thorough study of the suggestion, talks with the suggestor, his foreman, and superintendent, and then returns the suggestion to the secretary with his comments and recommendations written thereon. I t is then placed on file until the day of the COMMITTEE MEETISG, which comes on the 5. SUGGESTION first Wednesday of each month. This committee is composed of executives mho are chosen bv the management. The chairman is the manager of the Labor Bureau; the investigator is a man with many years of experience in mill work; other members include the treasurer of the company, the experimental engineer, and the superintendents of the various plants. .4t the meeting each superintendent reads the suggestions affecting his division, and after discussion, a decision is reached. The suggestion is either accepted, turned down, or held for further investigation. Sfter the meeting, the minutes are written by the secretary, showing the list in all three classes; the accepted suggestions are submitted t o the 6. EXECUTIVE CommTEE for final approval. This comniittee consists of the president of the company, the vice president in charge of the Gales Department, and the vice president in charge of manufacturing and research. After approving these suggestions, the Executive Committee returns the suggestions -~ to the secretary. Each suggestor is notified of the disposition made of his suggestion after each meeting. 7 . NOTESOF ACCEPT.\NCE are sent out as soon as possible by the secretary, accompanied by checks for the awards. 8. TURNED-DOWN NOTICESare sent out to those whose suggestions could not be accepted with a full explanation of the reason for rejection. 9. HELD-OVER XOTICESare sent out, notifying those whose suggestions are held over another month for further investigation. 10. PUT-INTO-EFFECT KOTICESare sent to etich superintendent in order that he may notify the secretary when the suggcstion has been carried out. This information is then trmsferred to a cross-index card which is made out for each suggestion and filed by subject. The suggestions themselves (both accepted and rejected) are filed alphabetically according to the name of the suggest or. At the end of each year, each man’s suggestions for that period are listed on a sheet showing his complete suggestion record. All records are kept in the Labor Bureau office where t.hey may be referred to by the manager of the Labor Bureau who is in charge of personnel. The following are further summaries of suggestion plans used as stated by company officials: For a number of years we have had a suggestion system in operation. Under this plan, employees may submit suggestions for improvements in our products, etc. These suggestions are sent t o a secretary who alone knows the names of the employees submitting them. The suggestions are then referred to the fac-
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tory superintendents or department heads concerned who evaluate the suggestion and make caah awards. In several instances, rwimi ds are made vhen the suggestion has proved to be of more value than originally anticipated. Cash awards are not made t o company officials, division managers, or those directly responsible to them. Foremen and assistant foremen are grouped separatelv from other employees so that a foreman does not compete with“the man at the bench. In accepting a cash aivard for a suggestion, the suggestor signs an agreement to assign any and all inventions involved to the company. A suggestion from a mechanic xvould receive a greater cash award than if coming from a foreman since the latter is expected to make suggestions as to improved methods and product.
...
R e have a suggestion system by which employees may submit to a suggestion committee any ideas which they may have on any phase of the company’s routine of products. These suggestions are given a number and become anonymous during their consideration. When a decision is reached as to their utility nnd availability the employee is informed of the decision and, if the suggestion is to be adopted or approved, a cash reward is made. By f:ir the greatest percentage of these suggestions are trivial and receive only very small remuneration but occasionally one goes, in for Jyhich a very substantial monetary award is made. It is only verv rarely that they involve patent,able novelty and, when they do,-each individual case is considered on its nierits as to the extent of reward to the employee. This system applies only to those employees who are not bound by contract. * e .
I n our Development, Engineering, Machine Design, Ekperimental, and Physical and Chemical Research Departments? 11 greater or lesser portion of each employee’s duties is to invent new products, compositions of matter, processes, and apparatus. The employee’s advancement, depends to a great extent on his activity and ingenuity in producing new inventions. Suggestion award systems are employed in our general offices and factory, respectively, other than the above departments, whereby employees are encouraged t o turn in suggestions on regular forms for improvements in products and niet,hods and new products. Boxes are deposited throughout the factory and offices for depositing these suggestions. Suggestion awarcls are also granted for nonpatentable subject matter such as new methods of doing business, suggestions for factory layouts, service stations! etc. The suggestions are considered by Suggestion Boards meeting a t regular intervals. Suggestions which a ,pear to possess any merit are referred to the proper deprtment heads for comment’, determination of savings involved, and recornmendation as to adoption. The suggestion is then considered again at a subsequent meeting in the light of the further investigation, and determination of award is made. For those turning in suggestions, a cash award is made to the employee for nierit,orious suggestions which are adopted or which are believed to possess sufficient merit for future adoption. These awards amount from a minimum of $5 to a much larger sum, depending upon the value of the suggestion, the savings involvtd, safety measures advanced, etc. Rlany awards have been paid amounting t o hundreds of dollars, some as high as fire, six, and seven hundred dollars. News of these awards is published in our house organ. In receipting for this cash award the employee signs a statement agreeing to assign to the company any patent application which may be filed thereon. Dickinson concludes that suggestion plans are valuable because they help to discover employees worthy of promotion, improve workers’ services by enlistment of their interest and cooperation, and make the employee more competent by making him more interested: “The posters and other ballyhoo of the suggestion plan may stimulate him t o think about and around his job (in itself a n educative process); the plan may offer him advice and assistance with the drawing a,nd language required; and finally a n official may pat, him on the back for what he has done and explain t o him also what he hasn’t done. I n this way his total skill may be continually increased, and his interest kept warm, even tJhroughhe never makes an invention of more than a very minor sort . . . . And from this standpoint the common policy of basing rewards partly on the effort and ingenuity shown as well as the cost reduction effected, may perhaps be abundantly justified.”
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INDUSTRIAL AND ENGINEERING CHEMISTRY
Other Methods Employed About fifty companies reported various measures which they took to stimulate inventing; of these, seventeen relied chiefly on personal conference and thirty-one on general stimulation and encouragement by giving an opportunity to develop new ideas. Several companies stated t h a t they abandoned their suggestion systems because of failure t o produce results. There are many other methods, however, in use which serve to stimulate the production of inventions by employees. Thus one company states: ‘‘We have a number of technical men in our organization who come in contact with the sales and service requirements of our equipment, and a part of whose work is the development of the equipment to meet such needs which in itself naturally stimulates inventing.” Many companies have developed elaborate methods whereby the sales department keeps in touch with buyers through agents in the field for obtaining suggestions in regard t o improvements, for noting defects developed during use, etc. Such data are of course valuable clues for further improvements. Also very often the clear formulation of a problem is a great stimulant t o invention. Another company states: “All of our road men are required to make complete reports of any problems which they meet with in the field. These reports are always read by the designer who is working on this particular class of work. Through trade publications, too, our designers endeavor to keep abreast of developments in the various fields which affect our work and we are constantly aiming t o improve our product,s both as t o quality and as t o speed of production. These are the factors stimulating invention.” Another company has a n Invention Committee consisting of two representatives of the company and one engineer selected by the inventor. The employee submits all his ideas t o the committee. The following policy is followed: The committee will determine whether or not the company will have the invention patented a t its expense in the United States and in forei n countries, and if so the inventor shall execute all papers requirecffor filing applications for patents in such countries as may be selected by said committee, and will assign the title to such inventions and patents to the company. If a patent or patents is or are granted upon said invention, the company agrees to pay the patentee or patentees within three months after the United States patent is issued, a sum of money between fifty dollars and five hundred dollars, inclusive, and the amount to be paid will be determined by the same committee. The above is to apply to the usual detail patents taken out. In cases where patents are likely to prove of exceptional value in securing a large amount of new business for the company, a epecia1 arrangement covering same would be made with the patentee. When a patent is a plied for, the inventor is to assign the same to the company, so t i a t the company’s name will appear on the patent. At the same time the company agrees to reassign the United States patent in case the patentee leaves the employ of the company, unless arrangements are made for the purchase from the patentee of the exclusive right of manufacture and sale by the company. In any case, it is understood that the company has shop rights on all patents taken out’ by its employees, and all inventions made by said employees during their employment. The following is quoted from an outline of the patent policy of a company which it announced to its employees:
It has been the company’s purpose in formulating its patent policy to establish as far as possible a partnership relation with those of its employees who conceive inventions that are patentable and are of benefit to its business. In order that the company may continue to widen its manufacturing scope and maintain its position among competitors, it feels that all in its employ should use their best efforts to devise, improve, and perfect to the best of their ability and for the benefit of the company, plocesses, machines, manufactured products and compositions o matter. The company believes that, contrary to the general impression, this is a duty which devolves not merely upon its mechanical and research engineers but also upon its operating, sales, and service personnel.
VOL. 27, NO. 12
This company requires a n agreement t o assign inventions by all its employees who in the natural course of events may be brought in touch with problems which from time t o time are presented t o the company for solution or which arise within the organization. The following policy is followed in making rewards: The company will pay t o each employee the sum of $100.00 for each such assigned patent when issued by the United States Patent Office to the employee, with the approval of, and under the direction of the company’s Patent Department, and which is made use of by the company. No such payment shall be made, however, on account of renewal, divisional, continuing, or reissue applications. Any invention submitted by an employee to the company which shall not be deemed of sufficient importance t o warrant the payment of an initial reward will be assigned back to the employee by the company; the company, however, reserves the right to retain to itself a free nonexclusive license to make, use, and vend the subject matter of the invention throughout the world. In addition to the initial rewards mentioned above, special rewards will be given to employees who make inventions of outstanding novelty and merit. Special rewards may take the form of premiums, adjustment of salaries, promotion, or otherwise. It is not possible to enunciate specific regulations covering the manner of determining the nature or amount of a special reward other than to state that in all cases the following considerations will govern: (a) Utility of the invention as determined by economies effected, or increased sales, or both, ( b ) Scope of valid patent protection which can be secured, and ( c ) Relative contributions made by the company and the employee in reducing the invention t o practice, and (d) Circumstances of conception (whether within or without the scope of employee’s regular and/or specially assigned duties).
In cases where the company does not deem it necessary to retain exclusive rights to itself under a patented invention, it will grant licenses to others and will share the net proceeds received from licenses with the employee. The employee’s share will be determined in accordance with the foregoing consideration and the obligation which the company must assume as a licensor. No special reward in the form of premiums will be paid before an invention goes into commercial use, or before patent protection is secured thereon. I n accordance n-ith another plan the employee agrees t h a t upon request from the company, within 120 days of date of disclosure, he will execute applications for letters patent and assign to the company his entire right, title, and interest to his invention. The company agrees to prosecute applications for letters patent a t its own expense and with reasonable diligence. The company may a t any time elect t o abandon prosecution or proceedings and shall so notify the employee inventor within 120 days after making such decision. I n this event the employee may proceed with application a t his own expense; however, the company retains shop rights. The employee is entitled to either of the following methods of compensation in case the company decides to retain assignment and obtain patents, and so notifies him within 120 days after patents are granted: (a) Fifty per cent of net profits on invention from license or sale to third persons, or ( b ) A lump sum agreed upon between employee and the company, payable within 120 days after such agreement is consumated.
Net profits referred to above are gross profits from the invention less all the expenses incurred in developing, marketing, exploiting, and protecting the same by patent and litigation.
Employment Contracts The question of employment contracts is closely tied up with the question of rewards previously discussed. Ninety-nine companies reported t h a t all employees or those likely t o make inventions were required t o sign a contract
INDUSTRIAL AND ENGINEERING CHEMISTRY
DECEMBER. 1935
whereby they agreed to assign to the company all inventions made during employment relating to the business of the company. One hundred and two companies, however, required no contracts to be signed. Many companies require all employees t o sign a contract, while others require them t o be signed only by those employees who are likely t o make inventions. These are usually the executives, research workers, engineers, chemists, designers, draftsmen, foreman, etc. The following comments indicate the attitude taken by such companies: All technically trained members of our organization and also our executives and other key men, \Tho might possibly make inventions of interest to the corporation, are required to sign contracts which are primarily employment contracts but contain clauses relating to inventions. 0
.
0
All laboratory engineering research employees sign a contract to assign their inventions. Production executives and general foremen also sign invention contracts.
..*
All officers, engineers, draftsmen, and salesmen sign an agreement.
..*
All employees in the Engineering Department and some employees in the Manufacturing Department who are assigned to work that may result in patentable inventions, sign contracts to assign their inventions to the company. I n wgard to inventions made by employees who do not come within the contract field, it has usually been our practice to prosecute the application for patent for the employee, he to hold title to his own patent and the company to have a shop right under the same. . * e
The clause of the employment. contract requiring assignment of all inventions varies according to the circumstances of the employment but is, in general, in line with the standard clause employed by most chemical companies in this country, including a provision -~ ~
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E. Y. CbSTNBB.
PROOEBB OF MANUFACTURINO BCDIUY ABD POTASUUM. Patented Yay 1 ~ , 1 8 9 1 .
NO.46a,030.
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against disclosure of any of the employer’s processes for a period of three years following the termination of the employment,. 0
0
0
There is no specific reward other than the mutual share in development effected. There is no employees’ contract. Patents are assigned without question as a mat,ter of principle. It is believed, however, that in the larger concerns there should be an employee’s contract that will give the inventor a reasonable cornpensation for outstanding development. We know that some concerns do this. On the other hand, we know that many other concerns do not because of an unreasonably strict, legalistic appraisal of the problem.
The form of the contracts are as diverse as the companies. Some are very short, others are very long and formidable in appearance. The longer the contract, the more resentment, it will probably cause on the part of the employee. A short, concise form is t.herefore highly desirable. The following is a, typical short form: AGREEMENT
Place, . . . . . . . . . . . . . . Date. . . . . . . . . . . . . . . . . I n consideration of my employment b y . , . . . .company, I agree: I v-ill perform for the company such duties as may be designated by the company from time to time and will communicate to the company all inventions or improvements mede or conceived by me either solely or jointly with others while in the employ of t,he company, and which shall be withh the existing or contemplated scope of the company’s business and investigations, during the period of my employment,, and will assist the company and its nominees in every proper way (entirely a t th.e company’s expense) to obtain patents for t,hese inventions in any and all countries, and will execute all papers for use in opplying for and obtaining such patents thereon as the company map desire, together with assignments thereof t>o the company or its nominees, all a t the company’s expenie, the inventions to be and remain the property of the company or its nominees, whether patented or not. I also agree not to disclose to any person without the cornpany’s consent either during or subsequent to my employment, any information concerning its inventions, processes, methods, trade secret, or secret process owned or used by the company a t any time during my employment or any confidential information in any way relating to the company’s business or affairs as conducted by it a t any time during my employment. As a matter of record, I attach hereto a complete list of all unpatented inventions which I have made or conceived prior to my employment, and I desire that these inventions shall be excluded from this agreement.
......
Signature
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: a
Several companies print the following explanation t o the employee on an attached sheet or on the same sheet on which the agreement appears: The men who are asked to sign this agreement are those who in the natural course of events may be brought in touch with the problems which are from time to time presented to the cc’mpany for solution, and with the efforts which are being made by various engineers attached to the company to solve these problems. Without an agreement to assign inventions along the line of the company’s activities it would be impossible to put these men in any such relations with the company’s work, and to bring them into free and open relations with those engineers viho are regularly assigning inventions to the company. While the company holds out no promise of additionatl compensation for assignment of inventions, its policy is to recognize all good service of whatever nature by proper adjustment of the salaries of employees, by advancement in opportunity and responsibility, and otherwise, and inventive ability is in general recognized as an element of value just as designing ability, executive ability, and other similar traits are recognized. As the employee is to assign inventions which he makes after he enters the employ of the com any, then for his own protection as well as in the interests of t f e company, it is desirable that records should be made of the inventions which he possesses a t the time of employment and which he would therefore naturally wish to exclude from the operation of the contract and to take
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IhDC'STKIkL A h D ENGIYEERING CHE31IISTRY
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up specially with the company if they were such that the company would be likely to be interested in them. I t is obvious that during his employment a man may acquire many records and data and much confidential information n-hich under no circumstances should he use after the termination of employment. There is also much that is marginal or as to n-hich doubt may arise. It is difficult, exactly t o draw the line in writing; a man's own sense of propriety is usually the safest guide in each particular case. The more experience he has, the more careful he becomes in such matters. The company will in many cases be glad to have the employees use such information, but expects the employee to obtain permission in each case when doubt arises.
As preriously stated there were one hundred and two companies in t'his study which require no written agreement by their employees to assign their inventions. This large number seems a t first surprising in view of the fact that the courts generally hold t h a t in the absence of a clear contract the employer has no title to the inventions made by an employee even though he used the time, facilities, and materials of his employer (2). Many of these companies stated that they found little trouble in having their employees voluntarily execute assignments; if they refused to do so, the companies a t least had shop rights which in most cases were ample for their purposes. The danger, however, n-here an employee has title to a n import'ant patent is that, if he should become dissatisfied or disgruntled, he is perfectly free to sell his rights to a rival company which may then become a serious competitor of his employer, or he himself may engage in the manufacture of his invention. The company assures itself of complete control of the invention by obtaining title to a patent through an assignment by the employee. It can license others or exclude them entirely from using the invention as circulnstances may warrant. Inasmuch as the employee has assigned all his rights, the employee need not be consulted in any way as to the disposition of the patent right.. There is a widespread resentment among professional and technical workers when they are compelled to assign their inventions in advance. Many of these employees feel that they are mortgaging their brains, ingenuity, and ability for a stated salary because such contracts usually make no provision for a fair recompense in case an important inrention is made. The courts have generally sustained such contracts as not being contrary to public policy on the ground that the employee is free to contract and sell his services and that the employer's business must be protected within the scope of normal or expected activities. Freedom of contract for the employee, however, may become an empty phrase in the face of economic pressure and the need of a job. Under such conditions, unless the employee is given fair treatment, the attitude of the employee is not conducive to creative work and only sufficient effort will be exerted to fulfill the minimum requirements of the job. The executives of many companies understand this situation thoroughly, and have found by experience that hidebound, rigid, and one-sided contracts are not conducive to the company's welfare and they are therefore willing to rely on the honesty and loyalty of their employees. The following comments are typical of this att'itude: Our employees do not sign a contract to assign their inventions. We have very few written contracts of employment and we have felt that employees would have a somewhat better feeling in the matter if they were not called upon to sign special contracts with respect to inventions. In my experience with the company extending over about fifteen years, we have had no instance in which an employee failed to assign cheerfully any invention made as a matter of course.
.**
Our employees do not sign a contract to assign their inventions. Our management is opposed to this and prefers to trust to the honesty and fairmindedness of its men. We have never lost by this policy.
..*
27,
NO. 12
Our employees do not sign a definite contract to assign their inventions to the firm, but it is commonly understood \Tithin our organization that any invention made by an employee relating to the work we perform or the outcome of experience gained by work performed within our own plant is the property of the firm, * e *
We have no formal contract but it is understood by our research workers that any developments made while in our laboratories on problems that have been assigned by the company are the property of the company and should be assigned if we think it is desirable to make patent application.
* * . I t is our opinion that the best results are not obtained if a t the time of employment an employee is forced to sign a contract assigning his inventions to the company. The most valuable patented inventions and pending patent applications assigned to this company were conceived by men who, without question, could have resigned their positions before applying for these particular patents because they could very probably have disposed of their ideas to our competitors to very good advantage.
*.. Our employees do not sign a contract to assign their inventions. We have found through a good many years' experience that employees are glad to advance their ideas for the benefit of the companv. Experience with another system whereby men were paid for their ideas, led us to believe that jealousies and suspicions of favoritism were the fruits of the method.
..* R e do not require employees to sign contracts or even to agree in advance to assign their inventions. We find that most worthwhile developments are cofiperative and we have had no difficulty in obtaining assignments when the time came for making application.
*.*
With the exception of one man who is especially hired t o develop a particular branch of our manufacture, we have no contracts with our employees to assign their inventions to us. We have tried to make it clear t o our employees that if they produce inventions or improvements, whether they are patentable or not, which are of advantage to us, their efforts in this respect will be taken into considerat'ion in the matter of their employment. Men are advanced in position and in salary according to their achievements for this company. This may vary according to the manufacturing conditions generally. In cases where the question is under discussion as to whether a man shall be retained or permitted to go: his activity in improving the product is, a t times, a controlling factor in keeping him on the pay roll.
...
Our employees sign no contracts to assign their inventions It, however, has been an unwritten law that this should be done. If an employee should refuse, we probably would have to be content with shop rights. We think it better to have no contract. I t seems to make for esprit de corps. t o the company.
* * * I t is questioned as to whether it is best to tie down inventors with a contract calling for the assignment of all patents. This can be circumvented in various ways, and where a really good man is involved he usually leaves such employment when the terms become onerous.
Summary l l a n y interesting discussions and conclusions could be made on the basis of the comments quoted in this paper which would require more space than is available. Several points, however, deserve to be stressed. First of all, the comments received from officials of the larger companies indicate that it is not worth their time, trouble, and expense to obtain inventions from the technically untrained employees. Such companies rather depend on the experts in their research departments t o develop new processes, products, and equipment, This policy is almost universally followed in producing improvements or
DECEMBER, 1935
INDUSTRIAL AND ENGINEERING CHEMISTRY
refinements on products or inventions already in use by the companies. The chemical and other industries have grown so rapidly and are so complex that it would be a n economic waste and poor business policy to intrust amateurs with the task of making improvements. It is interesting to note, however, that the proportion of basic and radically new inventions initiated by large corporations is relatively small. A tabulat'ion of the revolutionary inventions made since 1889, when large corporate investigation may be said to have started, shows that twelve out of seventy-two outstanding inventions have been produced by corporation research (3). This poor showing of large research organizations in producing basic inventions may be explained on the ground that the essential job of research departments is to develop antl improve the inventions on which the company's business is currently operating and that they are not expected or instructed to produce epoch-making new inventions because such inventions would not be in their field of business. However, the present tendency of many companies to expand into new and often unrelated fields will serve to remove the restrictions on the creative talents of their employees so that we may expect more basic inventions to be developed by large companies in the future. The social benefits floTTing from new basic inventions are of course enormous because they may serve as a foundation for new industries and offer a possible cure for unemployment. The surprisingly large number of companies which do not require signed formal contracts with their men to assign in advance any inventions they may make during their employment indicates that such agreements may become a liability rather than an asset. Executives are realizing that maximum results from a research worker can be obtained by treating him as a gentleman and a scholar rather than as a laborer. Perhaps those companies which have experienced some difficulties Kith the rights to their employee's inx-entions have been impelled to adopt agreements in order to aroid trouble in t'he future. The high moral caliber of most research men, however! seems to be sufficient assurance to nearly half of the companies supplying data for the survey not to require such contracts. The policy to be adopted in regard to employment contracts depends upon many of the factors which have been discussed. The general nat,ureof the company's business is an important factor to consider. Where the company merely produces a standard product in which feTv improvements are likely to be made, it is comparatively safe not to require employees to sign a contract. However, where the company is active in a new or rapidly developing field, and new products are being constantly developed and commercialized, the safest course legally is to require all employees t o assign in advance any inventions which t,hey may make during their employment because in case of disputes as to ownership of inventions the courts generally favor the employee where no clear contract to assign inventions to the employer can be established. The selection of a proper policy for stimulating inventions by employees deserves careful, deliberate, and intelligent consideration. As one company official said: "There are altogether too many people JTho fail to realize that they cannot continue t o reap industrial harvests without intelligent planting of seeds in the form of new ideas and inventions from which such harvests grow." It is therefore essential that the executives in charge of research and development work should try to understand thoroughly all the factors which are conducive to the creat'ive productivity of their men as well as those factors which hinder it. I n small companies where the employees can cooperate closely, no set rules in regard to developing inventions are important because the officials are in intimate touch with all
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1515 T. L. WILLSON.
CALCIWM CARBIDE PROCESB.
No. 641,137
P a t e n t e d J u n e 18, 1895.
developments. I n large organizations, however, the personal touch almost disappears. The man with a n idea cannot readily discuss his propoials with responsible officials. H e may meet with the resistance or jealousy of his foreman or director v h o is reluctant t,o adinit that a subordinate has the ability to improve the company's methods or products. Print'ed forms and red tape only tend to stifle the creative spirit. The machine-like impersonality of sugge~tioiicommit-. tees may further dampen his enthusiasm. A proper policy for stimulating inventions must therefore take care of these psychological factors which are apparently trifling, yet important to the individual. Large companies must of necessity maintain definite routine, procedures, and precedents in order to operate efficiently. Unfortunately the longer a company is established, the more rigid and coiiservative its procedures and policies tend to become. Such condi.tions stifle originality, resourcefulness, and openness of mind of employees and cause them to be infertile of ideas. The problem of large manufacturing corporations is to maintain an efficient stable organization for producing its standardized products which naturally require routines and methods, antl a t the same time not to become too rigid and inflexible as to discourage inventing by employees.
Literature Cited (1) Dickinson, Z. C., "Suggestions from Emgloyeej," Michigan Business Studies, Unir. of Mich., 1927; Quart. J . Economics, 46, 6 1 7 4 3 (1932). (2) Fenning, Karl, IND. ESG. CHEX., 25, 34 (1933). ( 3 ) Grosvenor, W. M., Ciietn. J f e r k e t s , 24, 23-6 (1929). (4) R o s m a n , Joseph, ISD. ESG. CHEX.,27, 1380 (1936). RECEIVED April 1, 1935.
