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Institutionalized Incentives for Ingenuity – Patent Value and the German Employees’ Inventions Act

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  • Harhoff, Dietmar
  • Hoisl, Karin

Abstract

Germany is one of few countries in which the monetary compensation for inventors is not only determined by negotiations between employer and employee-inventor, but also by relatively precise legal provisions. In this paper, we describe the characteristics of the German Employees’ Inventions Act (GEIA) and discuss which incentives it creates. We rely on responses from a recent survey of 3,350 German inventors to test hypotheses regarding this institution. We conclude from our data that the law creates substantial monetary rewards for productive inventors. The qualitative responses from our survey confirm this view, but also point to a number of dysfunctional effects.

Suggested Citation

  • Harhoff, Dietmar & Hoisl, Karin, 2006. "Institutionalized Incentives for Ingenuity – Patent Value and the German Employees’ Inventions Act," Discussion Papers in Business Administration 1262, University of Munich, Munich School of Management.
  • Handle: RePEc:lmu:msmdpa:1262
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    References listed on IDEAS

    as
    1. Lanjouw, Jean O & Schankerman, Mark, 2001. "Characteristics of Patent Litigation: A Window on Competition," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 129-151, Spring.
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    4. Manuel Trajtenberg, 1990. "A Penny for Your Quotes: Patent Citations and the Value of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 172-187, Spring.
    5. Schankerman, Mark & Pakes, Ariel, 1986. "Estimates of the Value of Patent Rights in European Countries during the Post-1950 Period," Economic Journal, Royal Economic Society, vol. 96(384), pages 1052-1076, December.
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    Keywords

    Employee-Inventor; Inventor Compensation; Patent Value; Productivity;

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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