Posted by: 2stepsback | November 3, 2007

How to protect the innovator

Patents are meant to protect the innovator and encourage innovation.
In my limited knowledge, there are three types of inventions:
1. one-man inventions
2. a small group of friends/individuals without a business relationship at the moment the idea is created – they are still college friends with degrees to complete.
3. a sponsored or employed research team from a corporation which gives the innovators the tools, facilities and knowledge to build something new with the given facilities and has asked the team to “make something great and new”. Here the inspiration for innovation is from the Corp, the platform is provided by the Corp and the labs are provided by the Corp. So, the Corp has to have quite a few rights on the innovation, intuitively and ethically.

Class 1 innovations are a small percentage in today’s high-tech industry.
Class 2 is typically the story of a startup.
Class 3 is where industry-level mass-use innovations happen.

My knowledge is with Class 1 and 2.
In these cases, to protect the inventor, there are several ways:

  • Ensure that any company using the single inventor’s idea must pay him the salary of a high-level Tech Officer in the company.
  • Or follow the music-industry model. Since it is essentially creativity that is involved in the process of innovation, reward the creator with a royalty.
  • But as against the music industry, the technology industry makes products, sells them, makes huge profits and also distributes profits to shareholders. So there is no need whatsoever for them to take royalties for the work of an individual or a team. They already have the profits and they just have to pay a royalty to the one person who made the idea.
  • The royalty need not be for every instance of the product, it could be an annual fee, a salary or anything of that kind, but from each company that uses the idea in its product.

So, the single inventor gets more than one company to make the product. The company has full rights to the profit and so on.
And there you get lots of scope to encourage the innovator. He will think up many things daily because he is getting paid, and can get paid multiple times.
But how much is he getting paid? Just one year’s salary. So he isn’t capable of extorting from the company. He can’t sink a company. He can’t damage the entire industry like GIF did. And since suing is limited to only the one year’s salary, hardly any company will want him to sue – they’ll just hand him the check and he can contact as many companies as he wants. He just has to visit offices of the companies he thinks will use them.

If you want to automate and e-enable all this, you can use something like and set up an online portal for trading thus. But the problem is it is impractical and difficult to trust another entity over the internet.

IANAL, and so, I feel the major problems of the small inventor and the big corporation are thus reduced or eliminated.

Class 2 is very similar to Class 1. In fact, better, because teams always produce better results, the corporations just have to pay n salaries where n is the number of the team of inventors.

Class 3 is much more complex. And IANAL. I am not even knowledgeable in that field. So at the moment, no comments.

But, if you really want your country to grow economically, remove patents completely. Set up a Govt fund for rewarding innovators and thinkers and ask them to submit their ideas and get paid from that fund in return. The fund should be a Govt fund and not controlled by a single company. Thus, the poor inventor, for example, has something to fall back on.
There is no suing, so that courts can concentrate on other cases like social, criminal, financial, etc.
And no one gets a raw deal. But again, Govt funding needs to make public each and every payment made to an inventor and his invention papers and claims which were the basis of payments. The disclosure should should be after the payment has been made to the inventor. Without this public disclosure of inventions, this system is not capable of lasting more than a couple of months, beause in such a case, innovators are not going to use this system at all, and the fund, due to misuse will be scrapped completely. Additionally, it should be a running funding, not a billion-dollar one-time allocation. Something like this – only upto $1,000,000 should be in the fund at any given time. Again, the accounting should be public, public as in on the internet, for everyone to see.
So, either industry-sponsored or state-sponsored, but the small, single inventor can be protected in many such ways.



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