1 in 4 employees in a commercial organization have hidden inventions from their employer

A new study from Tel Aviv University’s Coller School of Management sheds light for the first time on a significant problem in the business world: employees refusing to share their inventions with the companies they work for.

Although the law and/or employment contracts generally grant organizations rights to their employees’ inventions, the phenomenon of invention withholding is quite common and carries serious consequences for companies, particularly in high-volume sectors. knowledge intensity.

The study reveals alarming data: 1 in 4 employees in commercial organizations have hidden an invention from their employer at least once. In many cases, this retention is done deliberately, with the intention of using the invention after leaving the organization.

The research was led by Dr. Sarit Erez, in collaboration with Professor Yaniv Shani and Professor Abraham Carmeli, all from the Coller School of Management at Tel Aviv University. The study was published in the journal Academy of Management Perspectives.

Dr. Erez explains: “Business organizations, especially those in knowledge-intensive industries, encourage innovation among their employees, and their success depends largely on the ability of those employees to come up with groundbreaking inventions.

“In order to protect companies’ rights to these inventions, legal systems and standard employment contracts generally grant the employer ownership of inventions made by their employees, while requiring employees to disclose any inventions they have invented at work This allows the employer to obtain patents and protect the invention.

“To increase employee motivation to disclose their inventions, many companies implement incentive systems, offering financial subsidies and/or recognition, such as badges of honor, to inventors.

“But ultimately, when an employee comes up with a new invention, he faces a behavioral dilemma: should he fulfill his legal obligation and disclose the invention to his employer, knowing that he will lose ownership of it, or should they violate their obligations and retain the possibility of capitalizing on their invention outside the company?

“Indeed, it is common to see people leave one organization and join another in the same field, or even start their own company, often to develop an invention conceived in their previous workplace.”

Dr. Erez continues: “These types of cases often end up in court, where an employer sues a former employee – or their new employer – alleging that they are using an invention that the employee designed while working for him, and that the patent was legitimate. belongs to the original employer.

“Having practiced law in the private sector for around twenty years, I have often represented employees, employers or employee organizations in disputes of this type. It became clear to me that the legal tools currently used to address this issue do not constitute the most effective approach. .

“I thought that management tools designed to increase employees’ willingness to disclose their inventions and reduce their tendency to withhold them might be much more effective. But when I searched for academic research on this topic, I found none. found only a handful, and even those focused primarily on retaining inventions in academia rather than commercial organizations.

“It became clear to me that the issue of invention retention, so vital to the growth of knowledge-based businesses, had not yet been explored in depth in management strategy. With this study, we wanted to make shed light on this important phenomenon and begin to approach it from a business perspective.

For the purposes of the study, the researchers distributed an anonymous online questionnaire, asking inventors to indicate whether they had ever hidden one or more inventions from their employers. Participants were also asked to describe the event, including its reasons and circumstances. A total of 199 valid responses were collected.

Dr. Erez details the results: “54 participants, or 27% of those surveyed, said they had hidden at least one invention from the organization in which they worked. Of these, 28% explicitly stated that they did so with the intention of developing the invention. themselves after leaving the organization, or by bringing it as a sort of “dowry” to their next employer.

“The others cited a variety of reasons, some psychological and others financial. These included an emotional attachment and sense of ownership over the invention as a personal creation; fear that someone another takes credit; a conflict with their employer; a lack of trust in management; the organization.

In the next phase, researchers developed a unique, validated measurement scale, the first of its kind, to assess employees’ tendencies to disclose or hide their inventions from their employers.

The results revealed that withholding or disclosing inventions are not simply opposite sides of the same behavior, but rather two fundamentally different behaviors: an employee may refrain from disclosing a certain invention for various reasons (such as ‘a heavy workload or the belief that the invention still requires development and is not ready to be disclosed).

However, a deliberate and active decision to withhold an invention in order to prevent the transfer of ownership to the organization is a distinct behavior that may be influenced by completely different factors (e.g., the employee’s feeling of being wronged). processed by the company, regardless of the fact of the invention itself).

Dr. Erez explains: “This distinction is extremely important for organizations seeking to solve the problem. Steps companies take today, such as offering financial incentives or recognition to inventors, may encourage more disclosures to the organization.

“However, such measures may be less effective for employees who deliberately withhold a promising invention with the intention of using it later, outside the organization.”

According to the researchers, this newly developed scale can serve as a basis for further studies on the topic. Additionally, it can help employers develop an effective innovation management strategy that minimizes the retention of inventions within the organization.

Dr. Erez concludes: “In this study, we have conducted an in-depth exploration of a widespread phenomenon that has long been of concern to legal professionals worldwide, but which until now has received little serious examination. managerial point of view: employees in the business sector who retain their inventions from the company that employs them.

“We urge academic researchers to continue their research on this important topic and call on employers to take note: these behaviors exist and it is crucial to address them.

“For our follow-up studies, we are developing management tools to help employers address the problem in all its complexity. We believe that with appropriate management strategies it is possible to encourage disclosure and significantly reduce the withholding of inventions, thereby avoiding the need for future legal battles. »