Ex-ante estimating of additional remuneration for employee inventions: explanatory role of the weighted patent family size indicator

Pavel Svačina () and Jan Zouhar ()
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Pavel Svačina: Prague University of Economics and Business
Jan Zouhar: Prague University of Economics and Business

Eurasian Business Review, 2024, vol. 14, issue 1, No 3, 69-101

Abstract: Abstract In civil-law countries, employers must pay a value-based 'reasonable remuneration' to employee inventors. When dissatisfied with the amount of compensation, employee inventors can ask for a review by an independent board or directly in court and claim additional remuneration. The study explores the existence of ex-ante indicators that would help distinguish inventors entitled to higher/lower additional compensation. We build on the patent quality framework and test the explanatory power of the ex-ante patent value indicator, the patent family size, on the additional rewards awarded to employee inventors. A novel dataset of court cases heard between 1981 and 2017 in three civil-law countries (Germany, France, and Japan) is used. Our findings indicate a consistently positive effect of both simple and GDP-weighted patent family indicators on the additional remuneration granted. The main finding is as follows: if the court grants positive additional compensation, we observe an average 68% increase in compensation when the number of countries covered by the patent doubles; alternatively, if the total GDP of the countries covered by the patent doubles, the compensation increases by app. 59%. These findings, along with others from the study, can be beneficial for R&D managers, intellectual property managers, and other executives, as well as innovative employees, in estimating the remuneration amount for employee inventions.

Keywords: Employee invention; Patent; Reward; Additional remuneration (search for similar items in EconPapers)
JEL-codes: M52 O31 O34 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40821-024-00257-8

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