Employee Inventions Can Be Revenue Sources (Just Remember the Patents)

By Bell, Henry | Public Management, July 2002 | Go to article overview

Employee Inventions Can Be Revenue Sources (Just Remember the Patents)


Bell, Henry, Public Management


Many of the inventions or improvements that government employees develop in their daily work can be patented and become sources of public revenues. In these days of tight budgets, an extra revenue source for a local government can spell the difference between service cutbacks and expansions. But, to tap this source of funding, inventions must be properly protected. Just as important, ownership rights to these inventions must be clearly specified.

Why Protection?

Patents cover virtually anything created by the human mind. Traditionally, patents have covered machines, products, processes, and chemical compositions like pharmaceuticals. Recently, however, patent protection has been extended to computer software and Internet business methods.

According to David Radack, intellectual property attorney at Eckert Seamans Cherin and Mellott in Pittsburgh, Pennsylvania, a local government must act promptly to patent an invention or it will forfeit its rights. "If an employee invents a new process, and if that process is publicly available, a patent application must be filed within one year of the first date on which the process was made public" says Radack.

"After that date, the invention is considered to be in the public domain and not petentable."

The key to any successful patenting program is early disclosure of the invention to the proper supervisory personnel and a quick decision on whether to apply for patent protection.

"A government entity can't protect an invention unless the employee who invented it alerts management," says Philip Lam, deputy city attorney for the city of Los Angeles, California. "Management has to develop an organizational culture with a high awareness of intellectual property. Governments are protective of their tangible property, but they too often ignore the wealth of intangible and intellectual property at their disposal."

Lam recommends an employee education program, including new employee orientation on basic intellectual property rights and the local government's intellectual property review protocol. A customized intellectual property review process can help provide legal protection. A review committee of managers, engineers, and attorneys can be established to review employee inventions and decide which ones to patent.

To prepare and file an application, a government agency can rely on a patent attorney or patent agent. Be aware that professionals with a science and law background must pass a special bar examination (for patent attorneys, this is in addition to the state bar examinations required of all attorneys) to be admitted to practice before the U.S. Patent and Trademark Office.

The patent application process can be lengthy and expensive. Patenting an invention typically costs several thousands of dollars and can take up to three years. "Not all inventions are worth this time, effort, and money," says Radack. "But some are, and if this process is not carried out, a local government may find that the invention in which it invested employee time and resources is being sold for a profit by a commercial entity. Then it's too late."

A validly issued patent can stop others from making, using, or selling the invention it covers. More important for local governments, the patent can be sold outright or licensed to produce a long-term revenue stream. Revenues from license fees and sales can be sizable.

Patent Examples

Government entities hold patents for an array of inventions from varieties of flowers and trees to sewer pipe cleaning devices, environmental monitoring methods, and waste container lids. Only a few have attempted to determine if they have a commercial value, much less commercialize them.

* Los Angeles, California, holds patents on inventions by the department of water and power employees. It has licensed its newest patent, a manhole restraining system that protects people and property from underground utility line fires and explosions. …

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Employee Inventions Can Be Revenue Sources (Just Remember the Patents)
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