Innovation is very important, especially for knowledge workers like Software Engineers. Most of the Indian IT giants like Infosys and TCS have contracts with their employees, similar to what we saw in the story "Open Source Development", regarding the ownership of innovation done by the employees. Infosys for example owns the innovation done by its employees and rewards them by a meager amount of money for their innovation. Contracts like these definitely hinder innovation from employees as they know that they would not be rewarded for the extra efforts they put in. This is one of the reasons why there is so little innovation from Indian IT companies.
However, looking from the Companies’ perspective, if they do not have such a contract, the innovation done by its employees would be of no benefit to the Company. Is there a way out, so that the employee continues his innovation and the employer also gets its benefit as well? Can contract and innovation go hand in hand?
One way is to allow the employee to hold the patent for his innovation. However, there should be a contract with the employee wherein ‘Compulsory license’ should be given to the employer. In ‘Compulsory license’ the patent holder is forced to grant use to, in this case, the employer. The holder does receive some royalties, either set by law or determined through some form of arbitration. The employer may choose not to buy the license, in which case the employee is free to license the patent to others.
There are other ways as well to foster innovation, while having the contract. Companies like Google and 3M also have contracts with their employees but they have been successful as a result of their employees’ innovation. Google, for example provides its employees 20% time in which they are free to pursue projects of their choice. Some immensely popular projects like Orkut, Google News, Google Suggest and even AdSense were conceptualized and developed by Google engineers during their "20% Time".
So contract and innovation can go hand in hand, provided it’s a win-win situation for both the employer and the employees.
I concur with the idea of contract and innovation should go hand in hand .there must be a workable formula to see that both are kept in place when the company's interests and the employee's interests are taken care of. Suppose if the work is not covered by a contract , an employee producing a good innovation using the resources and ideas incubated and nurtured within his organisation which is also patented , may leave the company with his innovation and join the other company which promises him more autonomy , then the previous company stands to lose the competitive edge. At the same time , stripping the employee of his valuable title is also not acceptable. But when one takes a upper hand , other has to be compromised sometimes. An employee's morale or incentive to produce path breaking innovation in his work is limited by the clauses included in the contract. His right to get acknowledged for his innovation should always be preserved.
ReplyDeleteI am tempted to make a analogous comparison to this situation where a solution can be derived.
An initiative by the government to build a highway wherein companies like L & T come , bid , enter into a contract with the govt construct the road .Erect toll posts to charge money to the commuters and vehicles for a fixed amount of period say 25 years and thereafter the property is transferred to the govt.
A workable formula like this can be evolved where the benefits of innovation finally finds its way and reaches the destination without the parties involved in the deal on cross with each other for the claim of the benefits .