On October 22, Japan’s Supreme Court struck a blow for employees of major corporations, who make valuable inventions.
It ruled in favour of a former worker of
The Supreme Court in October confirmed the judgement and awarded the royalty payment of $1.4 million.
The motivation for the statement is clear but its logic is muddled. Human nature being what it is, one would assume that Japanese development and engineering staff would be more, rather than less, motivated if they knew that in addition to a handshake from the CEO their inventions may produce tangible returns to them personally. While Japanese firms have been justifiably famous for the quality of engineering, they have been less successful in promoting innovation and invention. Incentive structure was certainly part of the problem, as the Japanese social compact privileged loyalty and team work over individual effort and entrepreneurial drive. The Supreme Court judgement confirms that this compact is now in its death throes.
In my July 7
blog, I discussed how the Swedish government and academics debated the balance
between rights of academic inventors and those of universities, which employed
them. The initial temptation was to tilt the balance in favour of the latter
but in the end, the status quo, which is based on “professor’s privilege,” was
maintained. The rationale for this non-decision
was to encourage individual initiative, deemed the ultimate source of
invention. It is instructive to see that Japanese authorities, for all their supposed
conservatism, appear to share this rationale.
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