Ronald J. Riley
Inventor & Entrepreneur

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American inventors should demand a law to stop their exploitation. Most businesses require all employees to sign an agreement that gives the business all rights to any invention the employee creates. These agreements usually convey rights to the employer that stop just short of conveying the employee's first born to the employer.

This practice drains creative persons productivity in the same manner that communist countries workers will to produce is drained. Pure socialism doesn't motivate people to be productive yet we allow a socialistic approach to invention in the United States.

Our competitive position has been harmed because many inventors and potential inventors do not develop their ideas. Capitalism works well because individuals work hardest when they stand to personally gain from their efforts. The same principal applies to motivating creative persons.

Inventors tend to work day and night to develop their ideas. The effort that goes into creating a patentable idea is far greater then what is reasonable to expect of an employee. Inventions are usually the result of years or tens of years of experience and dedication to learning by the inventors.

Allowing businesses to exploit their employees in this manner is morally and ethically wrong. It causes deep seated resentment among the people this country needs to maintain its competitive position. A free market approach will not solve this problem. We need the equivalent of anti-trust action on this issue. A majority of American companies present a unified front to potential employees with employment contracts that deny inventors fair compensation. These contracts are so one-sided that they represent a serious restraint of trade.

Our universities recognize that a reasonable economic incentive encourages innovation. Many have established a policy that shares between 30% and 60% of the income derived from an inventors idea that is on their staff. Industry needs to do the same.

I believe we need a law that requires employers to share the bounty of a patent with the inventors. I think businesses should share 25% of the royalty (typical royalty is between 0.1% and 10% of the factory wholesale value of the invention, assuming 5% nominal royalty and paying 25% of that to the inventor or 1.25% of the factory wholesale) of the patents (after reasonable expenses are deducted) with the persons that are responsible for the invention. This would lead to more inventions, improving our competitiveness.

American companies would benefit from increased innovation. The American people would benefit from more skilled jobs. America can not compete with third world countries based on labor costs. If we want to hold the line on or restore our recent losses in our standard of living we must do it through innovation. The only way America can compete in the increasingly competitive world market is to start investing in our future. Fairly compensating inventors is in the best interest of our country.

Fortunately, inventors are banding together to defend their rights. The Alliance for American Innovation needs your help. I urge all citizens who understand that innovation is the life blood of America's economic success to join the Alliance.

A coalition of inventors joined with the Alliance for American Innovation to vigorously oppose the changes to our patent laws. Those changes are being promoted by multi-national corporations, foreign governments, and their lobbyists or agents. Inventors fighting to preserve our patent system includes numerous members of both the National Inventors Hall of Fame and the American College of Physician Inventors, over two dozen Nobel Laureates, and thousands of other inventors who recognize that we must stand up to preserve our patent system.

Please write your congressional representatives opposing so called "patent reform", which is very damaging to small business and independent inventors interests. 

Ronald J. Riley, President
Riley & Associates

Rev 1 published in Machine Design 12-94
Revision 4

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