STANDARD FORM NO. 64 REF ID : flfl,~~.ap 9 

V', ; 

Office Me1norandum . uNrTEn sTATEs GovERNMENT 

TO ... William F. Frladman, OOf 

suBJECT: ttGavermnent Incentives, A'tllll'ds and llewarda Program• Paaphl.d 

1. .1a ! told you on the telephone, a copy of tba eubject pamphlet baa be• 

:received direct f'rom Army JA.G. 

2. It appea.rs to lie the.t the committee which prepared the npart OOYe:red jmJt 

abou~ everything in the wq of all'&t"ds1 rewardat and iment1v••J I can. 1n .raot, 

think o~ nothing to add. It _.. to • that nen the •tter of cla.8111f'ied applica.- tiona dellcred 1n i88Ul!l beoe.use or 8901"eey' orders. which •tt.er you queried, ia substantial],y taken oare of in the Conm::f.tt.ee•s HCQlllll&ndatiana (page 26) from which it 

appears that the maounts o~ the a.wards and rew&l"ds ahould tab into coneideration 

the l.oaa or retention or o01BOrcial righte. 

3. I may ea:y that rq own view is that awards and rewards are not good :tn 

principle• am I 1IOtl1d p!'efer to He th• lillited to augpatia:aa and achievements 

not ausceptible of other treatment. I bellen it would be better, where patentable 

1nvent10DB are involftd• to leaft the comerc1a1 rights with the inYtmtor 1n l1tnt 

ot a ouh awrd emept where clua:ltication ia a hctot-. !ha would, I .feel• be 

cheaper• taka nothing t'r01a t.b.e Cov'..,_,.nt ioh&t it. usa. and at t.he -.- t.1me &8>unt 

to a recognition of pri:vate proJlift'V righiia which the prograa of' the pupuet 110uld 

tend to utinguiah. The proposed program. 1n other 11GrU._ adopt;a the pdnciplea ot 

h:ecutiYe Order 10096 which ia not in accordance w.tth m;r n- ar to Jq' mind 

conaiatent with a number o-r well-knmm jmicial decisicne. 

/I/id 

DllRl B. S'?AtJnltl 

Chief', 302L 

@'pp roved for Release by NSA on 08-29-2013 pursuantto E .0. 1352a 
REF ID:A71829 
- -----------------.................. =======!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!I 

REF ID:A71829 

A PROPOSED 

Government 

lncentives1 Awards 

and Rewords 

Program 

WITH RESPECT TO GOVERNMENT 

EMP\.OYEES 

Reoort of lnteragency Working Committee 

::in incenrives, .~wards, .:ina Rewards Submitted 

to 'he Cna1rman, Government Patents Board 

MARCH 10, 195!l 

OFFICE OF THE Cl-IAIRMAN 

GOVERNMENT PA TENTS BOARD 

WASHINGTON ~s, D. C. 

For sale by the Superinrenaent of Documents, U S Government Printing Office 

Washington 25, D. C • Price 15 cents 
CONTENTS 

REF ID:A71829 

Page 

I. IN'l'RODUcnON. .. .. .. .. .. .. . . . . .. .. ...... ...•••.•..... 1 

A. Employees Covered in This Study.. . .. .. .. .. . . . .. .. .. .. . 2 

B. Importance ol. the Problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 

JI, BXISTING LAWS AND CURRBNT PRAcnCPS. . . . . . . . . . . . 4 

A. Existing Laws Applicable to More Than One Agency. . . . . . 4 

B. Special Statutory Provisions f_or Certain Departments. . . . . . 8 

C. Practices of Indusuy ...... , ................. ·. . . . . . . . . . . . . . . . 10 

D. Practices of Other Governments......................... 14 

III. DISCUS-YON AND ANALYSIS~ ..•••......... ·............... 17 

A. Pros and Cons Regarding a Separate Awards Sfltem for the. · 

Inventive Employee. ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . · 18 

B. Types of Awards....................................... 19 

C. ·Deficiencies and Limitations in Present Laws _Covering 

Awards . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

D. Deficiencies of System Which Permits Awards Under Special 

Departmental Statutory Authority ..................... ·. 23 

IV. FINDINGS AND CONCLUSIONS ......................... . 24 

A. Recommendations for New Legislation for a Comprehensive 

· Incentives and Awards Program for All Government Employees Including Inventors .......................... . 25 

B. Recommendations Which May Be Effectuated Immediately 

Without New Legislation ............................ . 27 

II 

\ 

I 

·1 

, 

1-

.. 

FOREWORD 

Because of general interest in the subject and . because of the desirability of 

giving appropriate recognition to Govcrnment employees who make meritorious 

creative contributions useful in the performance of governmental functions and 

operations, this report on a proposed comprehensive Government incentives, 

awards, and rewards program is being made available as a publication of this 

Office. 

The report bas been submitted to me by an interagency working committee, 

appointed to make a study of the subject and to submit their findings and 

recommendations, with particular · rc&:rcncc to the Government employccinventor and the relation of such a program to the achievement of the objectives 

of the rcccntly adopted uniforin patent policy of the Government. 

The report is based upon an intensive study made by the committee, under 

the able chairmanship of Henry A. Sawchuk of the United States Civil Service 

Commission. In it the committee discusses and analyzes the problems involved, 

existing statutory provisions and experiences thereunder, and the practices and 

expcrienccs of American industry and of foreign govcrnments. The committee 

also had the bcncfi~ of the long experience of the Royal Commission on Awards 

to Inventors in Great Britain and of the reactions to their conclusions and recommendations from sources both within and outside Government. 

The recommendations of the committee cover two phases of action: ( 1) the 

enactment of new legislation having as its objective a comprehensive program 

for rewarding Government employees making all types of meritorious contributions, including inventions and discoveries of basic scientific principles, which 

arc useful in the performance of any governmental function or operation, and 

(2) steps that may be taken immediately, pciiding the enactment of new legislation, to realize the most cHcc:tive applieation of existing statutory provisions 

governing awards to Government employees. 

As Chairman of the Government Patents Board, an independent agency responsible to the President for the formulation and administration of the uniform 

patent policy of the Government, I have brought the report to the attention of 

the beads of all departments .. nd agencies in the Executive branch of the Govcrnmcnt, and have requested that: 

(I) The necessary steps be taken within each agency to sec that, in the administration of existing awards programs that arc now authorized by law, those 

programs arc made applicable to meritorious inventive contributions as provided in those laws; 

( 2) Existing agency incentives and awards programs be reviewed to assure 

that the fullest possible advantage is taken of current laws as they apply to the 

em~oycc inventor; and · 3) For the purpose of stimulating productivity of their employees generally, 

in uding inventive productivity, the agencies publicize, through appropriate 

Ill 

..... -·· 

.. 

, ____ -
media. the fac.t th.it icmplo~eo m.iking In\ entt\'C contr1bunom. ot merit may be 

rcwarJed under .. urrcnt a\urds programs. 

As the committee: e·.prcsseJ :nits conclu\i.ons. the ad' .intai;c to the Gmernmcnt 

of rc\urJing lll' entors in the way'I propoi.ed are ,Uc.Ii th.J.t. 1£ the pubhc is to 

reap the nch pocc:nnal h.J.nest from their cd'orcs and crcatl\e genius, pos1ti\e 

measures to rcw.mi •n\eno\e acluevement .ire emmcntl} Jo.1rable. .\s a tirm 

bclic,·er in the .\mcr1..:an patent system and m 1ti. ..u11nnu111g contribution to the 

ec.-onomic anJ 'l<.i..1 ... Jt• clopmcnt of our .:ountry. I .im cor.,·mc:cJ. that such .in 

e-r gratza a\\"llrUi. progr:un as the committee h.:is propoi.ed u. entlrCly conslStent 

\\lth .ind J. Jei.1raole ~11pplement to the patent :.}Stem. 

Re.11.nom to the program recommended b} tnc .:omm:ttcc v.ill be weko1ned 

lrom those who rc:aJ tn111 document .ind \\·ill be gi\en ..:on~1dt.ratiu11 :n the turther 

de,elupment ur such a prugr.i.m .lllJ ot the necesi..i.rv legislation. 

\\·\~HIM .. ro~ D. C. 

June .1.. 1!15~ 

.-\RCHIL ~f. p \LMER, 

Cn<111 rnrlll, GrJi·e• ttmc "' P.it, nt• Board 

I. INTRODUCTION 

On T.i.nwrv 30. 1951. Dr. Archie M P:ilmer. the Chairm:m o)f the Go,·emment 

Patents Bo:m.i. e::.t.tbl111hcJ .111 mter.J.gc.nc.y \\"orlong c.omm1ttee :o m.i.ke .i ::.tud]r 

of the Go\ernment progr:im or 1ncenu,es. J.\\ards • .mJ l'C\\.trJs 1n its rclJ.uon 

to the .iclue•ement of the ob1ecu.cs or E.~cull\"e Order 10090. The i.011lllllttce 

COllSlsteJ ot the tollo\\1ng pc.-nons: 

~\fr. Henr' \. S.nvchuk. c.,tl Sicn1cc Comnus:.ion. Chauman 

Dr Henn L Bu..k.irdt. Dc:::artment of Dciense 

Dr. K. s:u1b<;on. ::-.:.monal BJrcau oi StandarJs 

Mr Hubc:rt H l\1.irgohcs. Deparunent of JustlCC 

Mr. Henn C. Rubin. Depamnicnt of the Interior 

Mr J..d; Sunoni.. FeJcr.il Se.:.int) Agency ~fr. Fr:ink H. Spencer. Department 'lt .\gnc.ulture 

Dr. 0. Gknr. St.ihl. Feder.-1 P.:r .. 011n .. l Council 

r.1 Jud1t1011. Dr P.Wner iur:mneJ .ii.l!J.iJic gu1u.inc.~ .inJ ~'ISIStance ·iunng 

the .-:oursc ot the ~mnuncci. wor1t, .i~ J1c.1 )lr. ~harks F. P.r .. er. rr .. ul tnc 

Bure.::.11 .Jt trc: BuJgct. De:in \\"1lh~ R \\"oom .. h or the l"11 •• icrsll·, ut 'i'e-.a:. 

( CoJ11:1~1L111t. Gu\ernment P.;tenb Bo.u\J J. ~h::.°' Gi..Jrun L S.:hdJ1u!? oJt the 

c.,·il :5cr• 1Ce (:.,mm111t:.1on • .tll.J ~Ir. John :-.1 H.iger ot the Go ern.nc:nt :>.uent .. 

Board ~fr\ ~·l.11) s Turner .;nJ ~Ir P:.ut F John"'n ur .he: Gu\'C!UDIClll 

P.l~nb Bo.ir.i tun.:noned 3li recor1.1cr .tnd secra.ir:.. rcsFe.:u,ely. tor the 

comm1ttce. 

B.u.c .l.J.t.l u11Jermng mill study w:is obtained by a I'C' 11.·w or exii.ting I:iws. 

n:ports mJ other pertinent htel':lture. The princ1p.ii. Fet!el'31 .igenc.1es .ufectcu 

\\ere rcquore..: to fum1::.h inionn.it1on on ::.pec11ic point~. mc!uJmg their e!'.-

per1c11~-e~. ·.1ew> • .lllJ rccommen<l.it1om. T.ie .:omm1ttcc 1nt.t renoJi...ilh• anJ • 

.is the: ... ope .ind pattern of the 111quuy Je.. c.lupal. sptL1tic p11.1::itC'> ot the .ruJ:· 

were ~i.1gne:i to .ndi,tdu.i.l parn..ipants tor turthcr m\esugauan and report. 

In tl:.e ..:cune ut the i.tuJ\•. progrcu rcpom. \\ere made: to the C~i.1ll'111.lll oI the: 

Gu\crnment ?.:itcnts Bua.rd. the Board iudt .it its monthly meenuS!'· and the 

\'ar1ow. Feder.ii .igeoacs. 

The Jucumcnwy matcnals upon which this study is based were taken from 

thic niei. oJt the Gm.ernment. or were furnu.hed by the industri.il organizauon or 

foreign .. ounti; .:onccrnal. These m.ItCruls arc a\atl.iblc in tbc i:iles ot the 

Go\ ernmcnt P J.tcnts Ba:ird or other .igcnaes concemed. The dii.cuss1ons J.t the 

1ncc.un,;~ .>£ the .:omm1ttce on uu:enm ei., :awards • .md re" arJs J.re !turnm.iriad 

1n memorJ.nJ.i ao"' m the 6lc:i. oi the Gu\ernment PJ.tcnts Bo.irJ. In .1Jdicon, 

cons1l!cr .ible mtom1.it1on \\·:is taken from books. .uticles. reports, .uid other 

pnntcJ "r pi.bh~heJ 1UJ.ten.il. 

Under Exe= m'e OrJcr 10N6 of Janu:i~ 23. 1950. r5 F. R. 38Q. wbU.h provides tor a unu:orm patent poliq ior the Go\erDIDCllt wuh respect to 111ventioos 
i! I

i 

:: ... 

; 

made by Government em~~ _!nd for the administration of such policy, a 

Government Patents Board~~ eJii~tl~~an, appointed 

by the President, and a representative and alternate from the Departments of 

Agriculture, Commerce, Defense, Interior, Justice and State and &om the Civil 

Service Commission, the Federal Security Agency, the National Advisory Com· 

mittce for Aeronautics, and the General Services Administration. 

By this order, a basic policy was established for all Government agencies with 

respect to inventions thereafter made by Government employees. This policy 

includes the determination of the right, title, and intcmt in and to inventions 

made by Goveromcnt employees. 

A. EMPLOYEES COVERED IN .THIS STUDY 

Por the purpose of this report, "mnsideration is given only to employees of 

the Government who may produce inventions, including military u well u 

civilian personnel of the various agcncies affected by Em:utive Order 10096-

I. IMPORTANCE OF ·THE PROBLEM 

. Estimates place the number of American people whose livelihood is dependent 

upon patents in force at well over 12 million people or apprmimatcly one-fifth 

of the total employed population of the United States. 

In the pmcnt international emergency, the United.States is vitally interested 

in a high rate of productivity in advanced scicntifu: and m:hnological invention 

to compensate for our comparative dcfic:icnc:y in manpower. 

Por Iong .... angc national planning, an equally important objective of stimulating 

national inventive productivity is to c:onscrvc our material resources. This is 

cspc:cially signi6cant in our role of international supplier of materials and ma· 

c:hincry to allied or &icndly nations. 

It appcan obvious that the heart of the whole program of stimulating and 

dcvcloping inventions ii the problem of the inventor and the incentives to 

invention. 

The present general awards systems in cflcct in the Government scrviec, which 

provide for ulary incrcascs for superior accomplishment, salary inc:reucs and 

cash awards for economy and cflicicocy, cash awards for suggestions, and honor 

awards for cf&c:icnt and c:onstructivc public service, have some merit. Their 

principal wcaknelllCI arc in their cmnplcxity, inadequacy, and inequality. They 

do not 1pcci6cally provide for contributions of an inventive nature, and in this 

rapect they arc discriminatory and in many departments fail to give adequate 

incentive and encouragement. 

1hcre is comcmus within the committl:c on incentives, awards, and rewards 

that it would be considerably more advantageous to the Government to have 

new legislaricm to simplify, libcralizc, and integrate the entire incentives, awards, 

I 

and rewards programs for Government employees and incorporate in such 

legislation a uniform policy to apply to inventors in all Government agcncicscivil and military. 

Any ina:ntivcs and awards 1J1tcm having as an objective the stimulation of 

inventive thinking must be developed and operated ao that racarc:h and other 

e.ntial programs of the Government arc not impaired. On the contrary, a 

suitable system should not. only strive to increase inventive productiveness, but 

should also improve the cflcctivcncss of racarch and other programs by enhancing 

the urge to investigate fundamental principles and phenomena and to develop 

inventions to productiVCDCll. 

The National Inventors Council, which serves as a medium whereby the public 

may submit inventions of value in the dcfeosc and wclfarc of the Nation for 

consideration by the Department of Dcfcnsc and other Federal agcndcs, hu been 

considering the possibility of requesting the Congress to authorize a program 

in which suitable cash awards may be given to any person producing inventions 

of value to the armed services and other Government agencies. 

3 

. ' 
A EXISTING LAWS APPLICABLE TO MORE THAN ONE AGENCY 

GOVERNING AWARDS TO ALL FEDERAL EMPLOYEES 

INCLUDING INVENTORS 

Incentive awards to employees m the Federal Service :ire granted as offic:llll 

recognition of thCll' contnbunons toward efficiency 'lnd economy ot operation 

throughout the Federal Government The various aW'lrds include step increases 

for supi.nor accomplishment and salary increases or cash awards for c:Jli.cicncv, 

cash awards tor suggestions, and honor awards 

1 The Laws 

.\wards progr'lms are carried out under specific St'ltutory 'luthoritlcs 'lS follows 

.. ' 1-:. _ Step increases tor superior accomplishment under Title v II ot the Classifica 

.::. . _!Ion Act ot r949 (Public Law .μ9, 8rst Cong, approved October 28 r949), 

- Efficiency awards under Title X of the Classll1C'lt1on .\ct ot r949 (Public Law - < ... <- ~ ..,_.._ - - 429 S1st Cong, approved October 28, 1949), 

= Cash awards for suggei.nons under Sa.&.10n l.l ot Public Law 600 ~9th Con 

gress and under E~cutivc Order 98r7, issued pursuant thereto on December 

'E' ,. " 1-o=.. 3r r946, and 

- Honor awards under Secnon 14 ot Public Law 600 -9th Congress (the ~ 

mmistratl\c L'<pcmes .\ct) and Secnon 5 oJ: L'-LCUO\C Orckr 98r; December 31 

.!.946 

a Step inaeases a11tho11=etl fat sal1111ed tmployeeJ mtltt1 Tide r II of the 

Cla~J1fir:at1on /.ct u/ 1949 

r.mployees of the Government compensated on a pc'" .1.nnum b'lS1~, 'lnd OL 

cupymg positrons subject to the Cla.ufi.<.:1.tion .\ct at 1949, may under Title VII 

ot the .\.ct be gl\en 

(r) Periodic step mcre'lSes based pr1m'lnlv upon ser\lCC and :i perrormance 

ranng of Satist:ictory or better durmg a W'l1tmg period of 52 c'llend:ir wecl..s 

for employees m grades with step increases ot less th'lil 5200 :ind ;S calendar 

wccl.s tor employees in grades with step increases of 5200 or more, 

(2) Addmon'll mcrcascs, granted only within the hmit oi :iva1hblc appropriations, as rewards for supenor accomplishment, viz outstanding sustained 

worl performance, m1bat10n of an idea, method, or de\ ice or :i Spccl'll act or 

service m the public interest, and 

(3) Longevity step mcreascs based on long and fm.thful semcc 

Smee periodic :ind longevity step mcreases 'lre gnntcd 'lUtom'lnc'llly upon 

sansfactory complcnon of a picscribed amount of service they will not be disCllSSCd in thu report. 

4 

With respect to awards for superior accomplishment, each dcoartmcnt is 

authonzcd to grant adchnon'll step mc:rcascs, within the linut ot appropnattons, 

but no employee may receive more than one step increase for super10r accom 

plishment withm the blne period presci 1bed for pcr10dic salary adv'lDcements, 

i e , 52 or 78 calendar weeks, dependmg on the grade or the powuon which the 

employee occupies 

The ClVll Service Commuuon is required by law to issue st'lDd'U'ds upon which 

•uperior :iccompl.ishment awards shall be b'Uled I:ach department is required 

to repon to the Commus10n 'Ill .icnons approvmg such awards, and the Commu 

•ion m turn is requued to subIIllt an annual report to Congress covering the 

numbers and types ot awards gnnted A summ'lry ot 'l\Vards tor the fiscal 

years 1947 to r950 is shown m the followmg table 

Reasons for rewards for superior accomp/1shments 

I A. I B c I 

AllMtls 1,, tlJI jintll J'"' mamt;- TotMJ,,"""' SllSt.,,,,,J fl1'rll I 1111 IJtlOll I "' Sptt: "'Mt,, 

I puf"""""" "'" ll#thff 111111a "' tlJI I r ''·"" pllih& 1111mn 

1947 l :?,.,9 984 156 99 

1948 686 4:>.> 45 188 

1949 )72 608 ~.> 291 

1950 l 0.>i 7.>6 l5 -46 

Gnud totd 3 1144 .?. -bl .>.>9 824 

l 

It is signific'lDt from 'l pc'"Woal or the table 'lbo' c th'lt :ippro'"1mately 8 6 

percent ot re\~vds tor supe'"1or au:ompluhmcnts ha\e been ~nnted for 

minanon or :in idea method or de\1ce Ot this S 6 percent probably a very 

small pcrcent'lge represents mvcntt\e accompl.ishmcnrs The nble 'lbovc covers 

onlv the salaried cmplo~ecs of the Fcder'll Governmc'lt subject to the Classific:inon 

\ct or ~949• wluch encomp'lsscs 'lmong others ororcsuon'll technic'll and 

scientific worlcrs c.ngi.gcd 1n resc:inh dcs1i,n de\-dooment 'lnd i.uml'll' tcchnic'll 

tuncnons 

b Effer:1enr:y awmds 11nder Tide X of the ClasJ1fir:at1on Let of I9..J9 

Emplovces of the Go\ ernment compensated on a per :innum basis 'lnd occupy 

1ng positions sub1ect to the Classi.6c:it10n -\Lt or r949 m'ly under Title X at 

the Act be given cash awards or mcreases m rate. or b'lSic compensation tor 

:iccomphshments contnbutmg to outstanding efficiency :ind economy 

A C'lSh award for cfliciency shall not ~ 25 percent of the csnm:ited savings 

m the :first ye'll' ot oper:inon, nor 'ln amount equal to three times the ~tcp mcre'lsc 

of an employees grade If the hm1t:it1ons on the 'lmount ot cash 'l\~'U'ds would 

result m inadequate reward, a i.al.iry mcrcasc cqu'll to one, two, or three steps 

208117 ~1.?----2 5 
REF ID:A71829 

tor lus grade may be granted to an employee for a suggcstron or other contnbu 

tion to cffiacncy or economy 

The Bureau of the Budget IS required by law to mamtam control of awards 

programs under TJ.tlc X of the Act 

c Cash awards fat suggestions 

under Scct10n r4 of Public Law 600 and J:xccuavc Order 98r7, a cash award 

may be granted to any avdian ofliccr or employee for an adopted suggcs11on 

outside the normal requirements of the duttcs of lus p0S1t10n Except m the 

Dcp'lrtment of Defense, the total of all awards given by an agency durmg one 

fiscal year may not c~ 125,000 If such an award IS based on CStlmated 

savings rcsulttng from adoption of the suggcStlOD, the amount o! the award shall 

be based on the estunatcd savmg 10 the first year of opcrat10n m accordance 

mth the followmg table, unless for a spcaal reason the head of the department 

determines that a cWlercnt amount IS JUSt16cd 

51-$1,000 ,Io for ea.c.h ~oo m savmgs \Ylch .i. m1mmum ot 4510 for any 

adoptal. sum,esllOll 

~I ooo-510 ooo '>so for the fine ~I ooo of ~'"'ngs 'llld ll52o; tor C'lch 11dd1t10Jllll 

CS1 ooo of savmgs 

510 ooo-1noo ooo 5275 for the fine $10 ooo of savmgs aDd $50 xor e1ch '1dd1nonal 

$10 ooo of savmgs 

'5100 ooo or more $725 for che firsc $100 ooo of 11.9Illg8, and $100 for c:ac:b. adch 

aonal $100 ooo of s.nmgs provided that (C'Ccepc m the De 

parcmenc of Defense) the nw.unum award for any Oile sug 

gei.llOll shall be $1,000 

If an 1W'lrd 1s b 1Scd on improvements not identifiable as savmgs the depart 

mcnt dctcrIDIDes the amount of the ~ard commensurate with the benefits 

anacpatcd 

\t the end of each fiscal year, each dcparnncnt must report to the Director 

of the Bureau of the Budget the number of employee suggcsnons subanttcd 

the number ot employee suggcsnons adopted the total amount of ca.1oh awards, 

and the total amount ot CSl:lmatcd annual savmgs 

Section 9 of E~cunvc Order 98rj provides that anv cash awards to cmplovccs 

1>hall be m add111on to their regular baIC compensation The acccpuncc of a 

cash award by any employee precludes him hIS hCirs or assigns trom making 

anv claim of any n'lturc upon the Umted States for the use ot the suggcsaon 

upon winch the cash award IS based 

-\. summ'lrJ of cash awards granted for suggcsnons for the fiscal yc'lrs 1947 

to 1950 IS shown m the following table 

..,,,,.., /w ,,,, ft-' '"" '"""'&- N.-,,.o/t1U/J A,,,,,..&' _,,,,, A.-•!I -"' 

~"'"' of""" """"' ·"""''.,,,. 

1947 11,#1 $37 41 $1 463 

1948 13 861 32 44 1 1'9 

1949 20 CTJ7 28 74 919 

19.50 19 973 2873 1,034 

The tabulation abo\e includes all cmplo)CCS of the Government digible for 

cash awards under Public Law 6oo (the Aduumstranvc E"<pcnses Act)-thosc 

employees paid on a per chem baSJs which mcludcs the trades and crafts, as wdl 

as salaried cm.plo)CCS sub1cct to the Classmc'lnon Act of r949 Inform'ltion IS 

not avadablc a~ to the number of cash awards granted for adopted suggcsaons 

ot an mvcnnvc nature 

u H ono1 awards 

Under Public Law 6oo, 79th Congress, dcparnnents arc authorized to 10cur 

necessary C"<pcnses for the honorary rccognit10n of employees or organ1z'lt1onal 

uruts tor C"<CCption'll contr1bunons towud efficient and construet1vc public scr\ 

ice Any officer or employee of a department or agency is chgblc to rcccl\c 1n 

honor aW'lrd 

Some departments or agcnCICS have cstablii.hcd honor 'lW'lrd programs ha\mg 

only three such awards whdc others have as many .as tour m'lJOr types ot 

awards These arc known as D1Sangwshcd ScrvICC '\ward Superior Sen ice 

\.ward Length of Service .\.wvd and Commendable Service '\ward The 

acles of the awards mav ury slightly among the various 'lgcncies but the prmc 

plcs on which rccogmnon IS granted arc basically the same. The nvard m n 

Lons1st ot a medal, lapel emblem, or an appropnate ccraficatc or a combinanon 

or these 

2 Publicity and Other Types of Recogn1t1on 

It 1s generally recognized th'lt publicity ot awards 1s required 1nd .he prognm 

must be made J..nown to employees gcncnllv it any substantial 1nccnb\C '11uc 

s to result and the prognm IS to opcr'lte successfully Ceremonies arc usu11h 

hdd 10 connccnon with the prcscnt1tlon of a\vvds to cmplo\ ecs with articles 

announcmg such awards appearing in agcncv or departmental :>ubhcanons 

Employee rccogmnon mcludcs not onlv salary increases c:..i.h 'lW'lrds 1nd 

honor 1W'lrds but other tonns ot rccogmaon such 'lS promotional opportunmcs 

letters or commcndanon to be inserted 10 pcrsonnd folders and other C"<prcss1ons 

of '1pprob'lt1.on Whdc cash awards and salary increases arc one unpomnc 

f C'lturc of the 1nccn11vc awards program, they arc conSidcred as incidental ..o 

the broader obJccnvc of obt'llDIDg management improvement through genuine 

pamapanon bv employees m dccidmg on quest10ns which 'lffcct them and the 

W'lY 10 which thcir work will be done 

3 Machinery for Adm1n1strat1on of Awards Programs 

The diversified legal authonttes custtng at present, the d1v1dcd control re 

uponS1b1htlCS 'lt the CD:CUtlVC level, and the close but complC'I. rdat1.onsh1p Or 

the vanous tvpes of awards have made 1t ID1pcrattvc that dcp"U'tlilents coordm'lte 

the admm1str'ltlon of the awards program Bureau of the Budget Circular \-8 

Supplement I dated February 28, r950, ISsucd 1omtly with the C1vd Sen ice 

Comnuss1on, requires each department to establish an over all efficiency a\v'lrdi. 
,. 

i 

REF ID:A71829 

committee to coordinate and administer its awards program. This is necessary 

in view of the fact that, for a particular contribution, an employee may now be 

eligible under the existing laws for awards under more than one program. 

Subordinate awards committees may ha established in each agency to assist in 

administering the incentive awards programs. Members of any awards committee are sdected from among the key operating and staff officers of the agency 

or the organizational unit which the committee serves. In organizations where 

the work is predominantly technical or scientific in nature, at least one committee member should have a technical or scientific background. Authority 

to grant awards may be delegated to the subordinate committees except where 

the legal authority for making the award does not permit such action. Each 

department issues instructions for the conduct of the awards program throughout 

that department. 

B. SPECIAL STATUTORY PROVISIONS FOR CERTAIN DEPARTMENTS 

GOVERNING REWARDS TO INVENTORS 

A patents and design board, composed of Assistant Secretaries of War, Navy, 

and Commerce, was created by the Act of July 2, 1926 ( 10 U.S. C., 1946 ed., sec. 

310) to determine the amount, not to exceed $75,000, which any individual, firm, 

or corporation may be paid for a design, whether patented or unpatented, for aircraft, aircraft parts, or aeronautical accessories. Any design submitted to the 

board for such consideration is referred to the National Advisory Committee for 

Aeronautics for its recommendation. Thus far only one award, in the amount 

of $1,000, has been made under this statute, and that award was made to a 

Government employee. 

Certain of the executive departments have been permitted, under special statutory provisions, to reward employee-inventors in their departments for meritorious suggestions and inventions. These provisions are as follows: 

1. Department of the Interior 

The Department of the Interior is authorized, by Public Law 357, Seventyeighth Congress, secornd session (5 U. S. C., 1946 ed., sec. 500), to reward 

employees, in an amount not exceeding $1,000 (nor to exceed $20,000 in the 

aggregate during any one fiscal year), for any "suggestions or inventions" which 

would result in improvements in "technological or scientific processes or 

methods." Under this statute, the Department also may recommend to the 

Congress that special appropriation be made for an award to an employeeinventor in an exceptionally meritorious case. 

As these provisions have been hdd by the Comptroller General, on March 20, 

1947, to be not in conflict with the provisions of Section 14, Public Law 6oo, 

Seventy-ninth Congress (5 U. S. C., 1946 ed., sec. u6a), they remain available 

to the Department of the Interior. 

Since the enactment of Public Law 600, the Department of the Interior has 

made only two awards to inventors, in the total amount of $430, under its 

special statutory authority. 

8 

2. Post Office Department 

The Post Office Department is authorized, under the provisions of the Act of 

December ,3. 1945 (39 U. S. C., 1946 ed., sec. 813), to pay a cash award for any 

invention or suggestion which will clearly effect a material economy or increase 

efficiency in the administration or operatio~ of the Post Offi.ce Department or the 

postal service. The amount of any one award may not exceed $1,000, nor may 

the aggregate amount of awards in any one year exceed $25,000. 

The Post Office Department has not, since the enactment of Public Law 6oo, 

used the special statutory authority contained in the Act of December 3, 1945, 

for the purpose of making awards for inventions. 

3. Department of the Anny 

The Department of the Army is authorized, under the Act of July 17, 1912 

(50 U.S. C., 1946 ed., sec. 58), to make cash awards to employees of the Ordnance 

Department for an improvement or economy in manufacturing processes or 

plant. The aggregate amount of awards may not exceed $1,000 in any one 

month. 

Beginning with the 1943 appropriation act, and in subsequent appropriation 

acts, through 1946, the Department was authorized to pay awards to civilian 

employees for suggestions resulting in improvements or economy in manufacturing processes or pl.ant, or military material. Substantial amounts were paid 

to employees under this authorization prior to 1947. 

The Department of the Army has, since 1943, operated its awards programs 

on a department-wide basis. It has not, since the enactment of Public Law 6oo 

in 1946, used the two previous authorizations mentioned above. 

4 .• Department of the Navy 

The Department of the Navy is authorized, by the Act of July 1, 1918 (5 

U. S. C., 1946 ed., secs. 416a, 416b ), to pay cash awards to civilian employees 

for suggestions resulting in an improvement or economy in manufacturing 

processes or plant or naval material. 

From the date of the enactment of this legislation until 1945, the Navy Department paid out approximatdy $750,000 as awards for suggestions. In practice, the awards were made, in general, to those in unskilled positions and in 

the lower civilian personnel grades. Special legislation was enacted in two cases 

authorizing the awards to officers of $15,000 and $2,500, respectivdy, for assignments of their inventions. 

5. Tennessee Valley Authority 

The Tennessee Valley Authority Act of 1933 ( 16 U. S. C., 1946 ed., sec. 831) 

authorizes the payment to employee-inventors of such sums as the TV A Board · 

may deem proper "from the income of sale or licenses." However, while patent 

9 
REF ID:A71829 

licenses arc wucd by TV.<\. sub1ecc to such terms and conditions as arc appro 

pnate co each part1.eular case, licenses M> lSSucd arc m general nonc'Cclusive and 

royalty free 

SUlCC August 2 1945, the TV A has filed an average ot SIX patent applications 

per year In adchnon, dunng the same pcnod, an average of 75 technical sug 

gesnons per year were rcccived tram employees and formally considered under 

the TV A procedure of review Of the total number of techmcal suggcstwns 

rcc:civcd slllLC 1945, an avcragc ot appro'tlmatcly 20 per year have been of some 

use to TVA 

The TV A presently 1s of the opin10n that it also has authority under the 

broad prov1siom. of sccnon 3 ot its act to establish a svstem or program o{ 

1nccnnvc. independently ot any sharmg ot hccnsc mcomc While TV A has 

sponsored tor a number of years an acnve suggestion plan through a scncs of 

cooperanvc committees, 1t docs not, as a result o! an employee management 

agreement grant cash awards for suggestions 

C PRACTIC:ES OF INDUSTRY 

1 Sources of Information 

To .isccrtam the policies of m<lustrv with re0rard to cmplovecs 1nve11tions, 

e~nng reports and pubbcanoni. on th1b sub)cct were studied In a few c iscs 

1ntormat10n Wab obtamed chrcctly trom ccrcam comparucs An e"Chaustl\e 

inquU"y into current mdustri'll pracnces was not undertaken bec'lusc ot lad.. o~ 

tune and resources, 'lnd because the data already available m the various pubhca 

tions arc suffiucntly mdiLative tor purposes ot tlus report 

2 Assignment of Invention 

The ma1or1ty ot industrial hrms require thcir employees to e"<CCUtc agreements 

to assign utlc to their mvcnnons The hrms which do not require written agree 

ments generally have oral understandings to the same effect There 1i. no 

umformity as to the emplovccs covered-some firms require assignments from 

all employees, and other firms limit such agreements co those employees eng'lged 

1n research and technlC'll work With respect to the scope ot the 'lSsignment, 

1t is the general pracnce co provide for assignment of any inventwn within the 

fidd ot the company s busmcss There arc two pomts ot vicw as to the effect 

of assignments upon mventive producnvity ... 

a E"'pcnencc m the past has demonstrated that cmplovees, pamc:ularly those 

most likcy to produce mventions, do not ob)cct to 'lSsigrunent prO\ ided their wort.. 

JS rccogmzed and they arc treated fairly In the case o( technlClalls and research 

crs, assignment is C"<pectcd if the invcnnon is made 1n the lmc ot the mans 

employment -\lso 'lSSlgnments tend to reduce secrcc\ 1nd to provide better 

cc.am\\ or.I... and freedom m workmg with others on umtlar tasI..s 

10 

b The assignment of mvennons m advance tends co dampen the 10Cent1ve 

to mvcnt. Many employees arc antagomzed when required to execute an 

agreement wluch may be interpreted as contammg onerous terms for cm.ploy 

ment It has been said Many of these employees £ccl that they arc mortgagmg 

their brams mgcnwty and ability for a seated salary because such contracts 

usually make no provwon for a fmr recompense m case an unportant mvcnnon 

~made" 

Judging by the e"<pcrience and praCt1CCs of mdustrial firms, it appears that 

the requirement ot an assignment docs not appreciably affect mventive producnvity on the part of tet.hnical and saeno.fic employees Although many firms 

rcqwrc assignments from all employees, most compamcs blD.lt the written 

rcqwrcmcnt to thcir techmc'll staffs 

3 Extent to Which Companies Stimulate Inventions 

There JS mde divcrsitv ot pr::u.ace with respect to the degree to wluch 1nvcnnons arc encouraged -\. tew Lompamc. talce no posinve measures to btunulate 

mvenaons While dus JrOUp JS m the minonty, thJS c1.tntude seems to be char 

LCtcrist1C or Ji.e well cstabbsned mdustr10 where the processes and equipment 

.ire scandardizca The thcorv here 1s that dreamers or new mventions make 

poor producers The result ot thJS .irncude JS that the mdustn:Jl Umted Staccs 

1<1 replete with :.uccci.stul mduscriei. dc,,dopcd by men ot mvenme cap'luty who 

withdrew trom .heir pre\ 1ous t.mploymcnc m dlSSaW.taLuon with the terms ot 

mvcntwn asi.iJnments imposed upon them Quite gcncpallv these men were 

mdlVldualists ,,, lCh a daring pwnccr spult who had LOuragc co break .iwav anJ 

st.art out on thcir own -\I.ere inclustnalJSts today recognize hat these arc the 

\cry men most \aluable ror the e"<pansion ot .heir bui.mLi.seb thus the ch tnge in 

attitude row'lrd these producnve mvcntors 

Most comp.irucs encourage mvennons on the pare or 'lll employees but many 

of these L0111pamcs CODLCDtr.ltc on thcir engmeer1ng .ind research staffi. smce they 

n ive found through o.pcr•e'lLe th'lt tlmosc mvui'lbly the unportmt mvennons 

aie made bv those who arc employed for sucn a purpose 

The C"ae.Dt ..o which ciiorcs arc made to snmulate 1nvent1ons among employees 

seems to \ar) with the n'ltllle ot the work ot the firm and the atntude ot the 

companv i. man.igcmcnt 

4 Rewards for Inventions 

The practice with respect to the nature of awards and the amounts of cash 

awards given to mvenrors in mdustry JS as diverse as mdustry 1tsdf Some firms, 

1

argc and smatl do not gi\e speaal cash awards to any employees, fcclmg that 

any mvcnnvc contribunon should be considered as an clement m determining 

whether promonon should be made, usually w1th an appropnatc mcrcase in 

i.alary or regular compcnsanon Some compamcs allow spcaal cash bonuses for 

inventions made onlv bv nontechrucal or nonrcscarch personnel, talang the pon 

tlOD that thcir profcssi.onal employees arc paid to mvent and spcaal awards for 

11 
REF ID:A71829 

inventors tend to retard their research and devdopmental progr.uns Most firms, 

however, allow spcaal cash awards, m varying amounts, for mvcnuons made 

by all employees In some cases, spcaal reward plans for mventtons are apph 

cable only to the tcchmcal and research personnel, m the bchcf that an mvcntton 

1eprescnts something more than a suggestion, and consequently a spcaal system, 

designed to stimul'lte and cl1C1t patentable ide'lS trom among those most hkcly 

to make such contr1bunons, u 1usuficd 

In those cases where e'Ura compensanon, other than salary, 15 given for meri 

torious mvcntlons, some companies make a freed pavment :for each mvenaon, 

other compamcs provide a shdmg scale depending on the value OI the mvcnuon 

Those companies wluch make fixed payments may mili such awards at chfEerent 

nmes and m cWfcrcnt amounts These payments may be made at the tlinc of du 

closure, at the ame the patent apphcanon IS filed, and at the amc the p'ltcnt u 

granted 

Many companies have plans for payments ""h1ch go beyond the fixed award 

scheme These systems usually provide :for fi.'l:ed awards 'lnd, 1n add1uon, 

subsequent V'lnable cash awards or bonuses which mav be based upon a percent 

age of royalties collected under licenses granted, value ot the m\ enuon :is meas 

ured by savings, and value ot the inventton as me'lSurcd by prohts realized 

In a !c\v cases plans have been adopted wherein the entire grouo working m 

the 6dd o! the mvenuon 15 mvarded mstcad oI re\\ ard1ng JUSt the particular 

inventor Such plans usually provide that a fi.""<Cd oerccntage ot the profits or 

savmgs rcsultmg from mvenaons llhould go into a tuna to be apportioned an 

nuallv to all of the employees concerned Such .ipporuonment u usually de 

pendent on the salary camed by the md1V1dual employee .ind his years of service 

5 Conclusion 

As might be e'l:pccted there is no um:form p•utern with respect to the encourage 

ment 'lnd rewarding of inventorll m industry E.,en m the more '1.omogenc:ous 

.. egments of mdustry there u a considerable diversity ot pracucc due to the 

different attitudes and pohaes of the m"l.nagement ot e'lch org:iruz:iuon Miny 

ot the larger 1ndustnal finns have established pol!ClCS ot not gi' mg their technical 

and research worlcrs special rewards for their invennons These firms usually 

consider mvcnttons 'lS an unportant hctor in dcterm1nmg when the cmplovee 

should be promoted or given a salary 1Dcrcase 

The :following rc:isons arc usu'llly gm.n fo1 not h tvmg :i spcaal awards 

systehi :for inventors 

a .Arguments 4.gauut Spmal Awards System for lnuentors 

(I) Those employees eng'lged in techmc.il research 'ln<l de' clopment arc paid 

with the c-cpcctanon that they may produce in\cntlons 

(2) Other employees who devote too much tune to m\entive poss1bd1t1.es 

do so at a sacrmcc m their regular product1ve output. 

12 

(3) Smee many mvennons stem from group cilort, there is a pr'lCtlcal du1i 

culty m idcna:fying the m\entor, or inventors, to be rewarded and the C'l:tent 

ot each person s contr1buuon 

(4) Spcaal rcw'lrds tend to reduce teamworl. because some worlcrs may 

become secretive about their work 1n hope of grc'ltcr personal gam 

(5) Rewards for mvenuons arc d1Scnmmatorv against research workers and 

others who may make valuable d1Scovcries that arc not patentable 

( 6) A spcc:ud aw'lrds svstcm for mvcntors encourages employees to submit 

large numbers of di considered 1dc:is, and creates di will against the comp'lDy s 

patent department when decmon IS 'Dade not to sccl.. proteet1on 

On the other hand :i s1gruficant number of industrial finns, mcludmg some 

engaged m research war.I.. have found 1t profit'lble and ad\ant:.geous to develop 

"l patent conSClousncss and to provide :for swtablc monetary rewards for all cm 

ployccs, mclud1Dg those engaged m rcsc'lrch work Proponents of tbu approach 

£ccl that spcaal awards i.hould be g1\en to all inven ors "'hcther under a sepa 

rate svstem or as a p'lrt oI an over 'lll U>mpany suggcsuon and awards system, 

because 

b :b guments /01 ~p«1al :1.111auJs System fo1 ln11entou 

(I) When an eng1Dcer llt1ennst or other cmplovee males :in important 1n 

vcnaon it u onlv proper that he rccCive 'l swtable rccomocnsc-hc llhould not be 

dcmcd :i suitable special rc\.,'lrd because he IS perrormmg research work, because 

he has technical educ:iuon 'lnd tra1Dmg or because he h:ill greater imagmanon 

than his fellow workers 

( 2) Rcwardmg ot ID' entors bv sal:irv increase or promonon 1s not always 

pracac:ible or fair-a sru'lrv mcrc:ise tor a p:irucul:ir mvennve contnbuaon mav 

be inadequate if the cm.Dlovcc should work :it the 1m.rc:iscd sal.iry :for only a 

short time wherc:is it m'lV be d1sproport1on:itclv lu;h 1t the employee continues 

to won.. mdchmtclv :it he higher salarv .ind should m'lke no more mcr1tor10US 

1nvenaons, :ilso with rcltOect to promotions not all m\entors desire or arc capa 

hie of assuming succcssrolh p0S1ttons ot higher rcspons1bilitv and importance 

(3) The absence OI 'l oos1nve aw'lrds plan tor inventors h:is ID part led to 

the use ot the term .. 'lPU\e inventors with retcrence p'lrt1c.ilarly to sil'lr1ed 

researchers 

(4) The :ibscm.e ot 'ln awards system wluch dcnmtclv provides :for inventors 

..s not conduave to the encoungcment of inventtonll 

(5) The tallowing benehts may accrue trom h'l.,mg :i t'lrigiblc system for 

rewarding all inventors 

(a) Useful mvenuons :ire promoted :ind 'l stead, Bow ot 1de'ls encouraged 

( b) Prompt rcport1Dg ot 1m enuons 1s encouraged 

( c) The work of a patent department IS tauht:ited by mcrc:ised cooperation 

from the mventors 

( J) Patent consaousncss on the part of management 15 promoted 

( e) Good mdustnal rcl.it1ons arc promoted by :i wcll-admlnlStcred plan 

13 
REF ID:A71829 

D PRACTICES OF OTHEll GOVHNMENTS 

An analySlS ot available m!ormation with respect to the practu:es of othei 

Governments revealed relattvely little of value to the purposes o£ this xcport 

Great Britam, Canada, France, and the ScandmavlllD countries, especially Sweden, 

did offer some suggesttons 

1 Great Britain 

Within the Brittsh Govemment, the 1nvent10ns of the pubhc servants 1 hlS 

toncally have been considered property of the Crown unless it could be demon 

stratcd that the idea and the work of devdopmg the mventton had been done 

independent of all assoaanon with Government tune and/or faahtlCS 

Unbl the end of the nmeteenth century, monetary awards were rarely accorded 

evil servants tor m'lcntions of i.pecial merit m Great Bntain, but they were recog 

mzed by J15tuu.nve state honon, the decoranon contormmg to the ~alarv level 2 

of the servant 

.\.central <.ommmce on 'lwards was set up by the: Trcuury on recommendation 

or the Civil Service Committee and the C..l\ 11 Service N'ltional Wh1tle) Council 

1n 1930 

under thlS awards system, Jep.mment'11 aw.ll"Js <.omm1ttec..s may recommend 

to the department or mmii.try hc..ad monetarv 'lw:irW. to 1mentors up to one thou 

sand pounds sterling Also, they arc authorized to recommend the chstributton 

ot the commeraal nghts between the inventor and the Government 

The central committee on awards is an agency ot the Treasury 'lD.d 1S ap 

pointed by the Treasury The Treasury also supplies one member ot each de 

partmental awards comtnlttce The committee m ty m.ikc awards up to ten 

thousand pounds stcrhng and may recommend to the Treasury the granting ot 

even greater awards It further SCI\CS as an award rc\1ewmg and coordmaung 

board 

Cash awards to avil servants of Great Britam arc not bmited by the salary 

IC\el ot the inventor as has been the pohcy on decoratlons In tact, departmental 

comm1t1.CCS have been reported to be more bbenl in mal..ing high cash 'lwards 

to low rather than high salaried avtl servants on the basis that moxc should be.. 

e-,:pcctcd of a high salaned worker In theory, cash awards for inventors m 

Britain are made mversely proportiorutl to the promruty of the mvennon to 

the assigned dutlCS of the civil servant concerned However 1n prac:t1CC the 

committee dCC1S10ns have been very ob)cctive and hberal m order to encourage 

those who arc employed to invent to JOlD trcely in the compennon with all other 

civil servants 

1 Pubhc scrvant1 of Great Bntam are any em.plovees of the Government C'CCZPt those who 

are clccr:al to o11ice or who receive sal-lnes by hcmhtary proc:as 

Low salanc:d sc:rvantl c:in recei.ve a da.onaon as M B E (Mc.mber ot the Bnash J:mpll'C) 

Por the next level the 0 B J: (Order of the Bnash Empire) might be given then upward 

at the next lcvel1 to C B E (Commander of thc Bnash J:mpirc) and K B E (Knight of 

the Bnash J:mpuc) 

14 

There JS no regulation prolub1nng both a cash award and an honors award 

for the same chsco\ery or invention In tact, Sll' Frank Whittle was decorated 

as a Kmght ot the Bnmh Empire some time bctorc he was given the J;xoo,ooo 

sterling tax £rec cash award tor the dcvdopment o£ the JCt englllC In deter 

mmmg the amount of thlS award, both the central comnuttee on awards and the 

Royal Comm1s'llon on .\.wards to Inventors parnc1pated 

There is some confusion on the part o£ both the Bnttsh laymen and others 

on the tuncnons of the Royal Comm.lSSlO!l on Awards to Inventors and its rcla 

uonsh1p to the central committee on awards The forerunner or the present 

Royal Comm15s10n dates bacl.. to 1919 when a Royal Commission on Awards 

to Inventors was created muncdiatcly after World War I Whtle the scope of 

the Royal Comm1SS10n i. acttv1ty has varJ.Cd trom tlUJ.c to rune, primanly it acts 

'lS 'Ul appe'lls tnbunal tor In\ entors A wge portion or Its worl.. has to do with 

men outside of Government, but 1t is available to avtl sen 'lnts when they desire 

to use it When the Government mal..cs use ot a Br1nsh patent the Royal 

Comm1ss10n on Aw'lrds to Inventors is the tnbunal that can recen c an 'lppc:tl 

to determine the mventor's equity The present C..Omm1ss1on i. iuthority dates 

b'1cl to its rcorg'lnu.:anon 111 r946 

The Royal Comm1ss1on was mv1ted to pamc1p:l.[e in the.. J1i.'"uu1ons leading 

up to the Whittle awarJ by the Trc.'li.ury bectusc.. or its c'l:pc:m: <.cm 1ppn1smg 

mventtons 'lnd also bec'lusc of the high regard m wh1cn the members ot the 

present Comm1Ssion were held The pro<.cJurc ot the .. entr'll committee and 

the Trcai.ury m usmg the seruces of the Roy'll Comm1i.s1on on -\.wards to Invc..n 

tors as prm<.1pal ad\l\Or m thur more 1mponant 1mreSUJanom n'ls now become 

ei.tabl1shed 

2 Canada 

The employee inventor 01 the: C mad1'1n Cn>vernmcnc m the: oram'1ry services 

is granted at lc.ist one h ilt ol the domc:i.ttc proceeds trom the.. c~ ploitauon ot hlS 

mvent100 and all ol the .toreJ.gn nghts but ii. gi'len cons1de able Governme'lt 

supervu1on in the hce1mng ma assigning oi his patents Thi& uceaom for .he: 

employee to e"l:plmt hJS own patents was 1ntendc:J to en<.ounge hu,hc.r proJucn., 

lty of lDVCDtlOD 

The :Nano.nal Research Counctl o{ Can'1da reguhnons of IO:lj are more re 

strlCtlve with its cmplovee 1mentors The ""Cgul ltlon rcquucs th'lt 

All mvcnaons made bv mcmbeu of the tcdinic 11 staff sh.Ill be Yea.red m the Counal and 

shall be made au1hblc to the public undc.r mch condmons UICI upon d e pauncnt of such 

fees as the Councd ma) dctcnnmc fh1s mcludes foreign 11 we11 as domci.nc nithts 

The Council with the approv'll of the Governor or the Coun..tl is 'luthonzcd 

to pay the inventors such royalt1CS 'lnd fees ai. it bche' es warranted 

No stamncal mformauon is available on the ments ot the two systems The 

freedom of the employee to e"<plon hJS own p'1tcnts does not seem to have 10Sprcd 

greater productl\ 1ty m the ordmary Government dep'lrtments The '-'lttonal Re 

search Counal, 1n a pcnod ot about one quarter of '1 centurv, docs not show 

any Slgmficanc mcome IIOm Government-owned patents 

15 
REF ID:A71829 

3 Franca 

The Government departments of France use a Bcublc system of awards to 

mvcntors If monetary awards arc used, 1t IS quite customary to make higher 

cash awards to the lower rather than the higher p.ud employees on the baSIS that 

more should be c'\.pcctcd of the higher paid 

Honor 'lwards arc progressi~c It IS of mtercst that the title of the lowest 

state honor award talcs on the same dCS1gnabon as one of the highest m Great 

Br1tam The sequence is K.mght, Officer, Commander, and Grand Cross in 

the cWfercnt profcsS10nal orders It IS quite customary for outstanding men 

to nsc progressively from their lirst honor of Knight to the succeeding honors 

1n their own turn A French inventor usually would be more appreciative of 

the Grand Cross than ot a cash 'lward ot several thousand ta..: free gold francs 

He will worl... with great zeal and enthusiasm and stnve to reach this goal through 

the several sequential steps withm Ins prote.S10Dal order 

4 Sweden 

For the Scandm'lvian countrlCS S\vcden lS taken as the typical example In 

the military service, ID\ cntors cspcc1ally 1n the field of military wcaoons arc 

irom tJ.me to time given spcci"ll gratwtlCS This 1s p1ed1cated on the idea that 

the inventor lS unable to deal ID a bUS1Dcss way with such ideas or mvcnt1ons 

Ill DISCUSSION AND ANALYSIS 

As a fundamental mechan1Sm for stimulating thinl...mg and che1tmg bendiaal 

ideas the employee part1.e1pation program, mvolvmg a suggcsaon system with 

appropnate awards IS not a new dung m the American mdustrial scene Nor 

1s 1t new within the adlil.ln1&trat10n of the Federal Government 

Certamly the roots ot the mi.cntive systems run deep into the protound psychol 

ogy o! human relations "Uld 1rc Jinnly grounded ID man ~ deSll'C for miprovcmcnt 

m the cond1bons under which he hves, for progress and advancement and for a 

better way of btc 

The idea ot cmplovee part1.e1p"lt1on 1n develop.mg unprovcments 1n worl ana 

performance has demonstrated its ~orth Specific methods of domg thlS, by 

speafi.c kmds or suggcsnon systems have been the sub]ect of much debate 

The underlying pr1naolc or awards for suggestions and valuable ideas IS to 

provide tang1We C\ldcnce of public recogn1t1on of the value ot bcrYICCS rendered 

Under thlS bablC prmc1plc the ob1ecuvc or any good su~gcsnon system whicn 

provides tor awards lS in bnet to secure constructive suggestions from as m'lnv 

employees as possible :ind thus improve employer emplovcc relauons Th.IS pr1n 

c1ple appears to be ~ound whether the aw'lrd t.om1Sts ot cash a promotion a 

ccrniic'ltc or mcnt a med 11. ot honor or my ol the m'lnv other I...inds ot aw"lrds 

m t.ommon use 

Benefits ot a suggcbtion sysrem accrue both to the employer and to the worJ...c .. 

In the opinion or a ma1or1tv of uosc students ot 1ncent1vcs and 1wards systems 

the actUal sa\.mg represents the least ot its value LO the compan\ Undoubtcdlv 

a bigger value than the u.tu.al l.clSh s.i.vtng IS the matenal hep given by the 

suggestion svstcm 1n keeping evcrybodv in ..he org"tmzat1on on h15 toes ana 

mentallv alert The improvement of 111dustnal relations provides another large 

though mtang•blc ad\antagc to the organization 

The worlm1n who contnbutcs good ideas toW"lrd improvmg h~ 1ob verv 

~on begins to red a propr1ctarv mtcrcst m 1t He feels that This ~ my 100 

and ~oon that Th15 IS my t.empany ' 

An cmplo' cc .vho turns m an idea which saves the compan) a lot of money 

may be d1Ss'lt1S11cd 1f he docs not rccc:1vc what he considers a fair sh"lrC of the 

savmgs m cash Just the same, 1t 1s almost universal C"Cpcnence that the C"<pcCta 

t10n ot rccci~mg a cash a\vard lS not the only mcenti\c that ongmally 1nsp1res an 

employee to LUm 1n a suggestion 

An emplovcc develops ideas and turns them mto suggestions bec'lusc they 

funush the needed outlet the psychological mcchan1Sm tor the c-c:presS1on of 

concepts identified. with hlS deepest mental and spmtual bcmg He C'\.perienccs 

pleasure at sccmg his own ideas at work m concrete torm, and in the great 

ma1oncy of cases, he IS gcnumcly mtercstcd in helping the organization for wluch 

17 
REF ID:A71829 

he 15 workmg He honestly and acnvely d1Shkcs waste and mcf6ocncy and 

wants to do hJS part m improving compiny operat10ns 

It u the bchcf oJ: the committee on mccnavcs, awards, and tcwalds that the 

fundamental prmciples governmg the ob]ccave and applicanon of suggcst10D 

and awards systems m general arc applicable to mventors, as well as to those 

cmployccs who might maJ..c mcntor1ous contnbutions of a noninvcnt1ve nature 

Also, it IS bchc~cd that whatc\cr the formalized 'ldawustt1t1ve machmcry set 

up for mccnave purposes optunum results can be atti1ned only by operating 

111 a proper psychological environment m which m1nagcment shows human 

undcrstandmg, Uu.rncss, and progressiveness m dcvdoping employee saasfact1on 

by improving working cond1nons and according suitable rccogrunon h one 

writer puts it Personal tact sympathetic and understanding handling and i 

proper psychological approach to the employee may somctuncs be of greater 

~aluc than an actual cash reward in encouraging the lovaltv, confidence coopcra 

tion, interest and good will ot the employee ' 

A PROS AND CONS UGARDING A SEPARATE AWARDS SYSTEM FOR 

THE INVENTIVE EMPLOYE!S 

So far 'IS the committee h'IS been able to asccrt1m there 1s e.sent1ally unan 

1mous opinion among Government dep1rtrnents that 1t would be unWlSC 'lt thJS 

tune to establish any svstem of rewards for mvcnaons or p'ltcnts that would not 

oJfcr equal awards for other (nonpatcnt1ble) types ot sc1ent1fic or tcchnologu:'ll 

contnbutl.OJlS or 'lchie\ cmcnts Tius was summarized m the committee s prog 

rcss report under date oJ: 'v.l:arch 12, 1951, as follows 

It IS h11,hh 51g11Uic:a.nt th'1t :ill lllCDCICS ~ to UIDCUI th It '1 ..CMMtc .l\V'll'd& Mtml for the 

inventive cmplovee 11 undesirable because undue emphm.u. on thL unenu'e contribution m'ly 

result m other c:luses OI emnlo\te& M.Ckin1t 'PCCI ii 1.0n~idcnt1on inrl 1c m'l\ scnmu.lv reduce 

the dfccnveness of Ol"ffllDIZ1CIOD' cng'lgrd 1n =rch incl dcvelonmcnt worl.. Spc:aal hnana.il 

rc.W'lrds to inventor& m'lv 

lead to sa:rec:v and l'1CL. of cooperanveness on the p.irt of ruea.rch 'lnd teehmca.1 cmplo)ees 

involve adm1Dl&tnb1rc ddhculnes m detcrm1mn.. the pcnon to be rc.w:irded whenc\er the 

m\enbOn 11 the. result ot group ende1nor and 

c:re'lCC disu.nsfacnon a.mong \llU"C\vardc:d mcmbc.rs ot 1 rC\C 1rch .,mup '1S well 1s among 

perso1111Cl assigned to fullc:t10Dll not 111.ely to produce an ID\ c:nuon 

An unproved genenl &)stem of 'lWDrds for all mentono~ ~ontnbut1on~ whether or not of 

an mvcnnve D'lture would be free of these obJCCbon& 

In 1943 Dr Lyman H Briggs, former Director of the "lat1onal Bure1u of 

Standards, clc:irly stated the principal arguments iga1nst a special system of 

awards to mvcntors 

It IS not bcheved WISC to pro\ ide spcual a.wards to emploJ ees for speC16c 1m entlOllS or 

d11COVC1'1C'I At first thouirht such mva.rds might seem 'ldTisable but it 11 believed they ha' e 

been found 1n the lonlj' run unproht1ble m DnVll.tc research Ol'llUnlZ inons In a larqe on,an1za 

non like: the Bureau of Sranda.rds covcnm.. a. larqe Vll.ncl) ot work one of the pnnapal 

advantages 11 the avlllla.bihty of adYICC from experts ID manJ hnc:s ot work Coopemnon 

and freedom of C'<Cha~e ot ideas .among the worl.ers m d1\erse fields a.re highly valu'lblc 

assets and these would be 11J1111ediately and seriously endangered if each U'dmdual emploJ ec 

thought th'lt h1S willarc depended upon md1vidual mvennons or d1sc:ovencs The npenence 

of 1ndustnal laborarorJ.CS has been tbat effecuve teamworL.. IS made dd&cult or unpDSS1ble when 

empham IS placed upOJl ac:d1t o the 1ncbv1dual Furthermore mventlODS or chsc:mena seldom 

sprmg cnurely from the mind ot one 1nd1V1dual Interchange of ideas and chscuSSIOD of prob 

lems stunulate the conc:cptlOD. ot procfucnve ideas and m many cases it 11 cb8icult to say prcasely 

whu:h md1vidu.1l m a. group c:oru:ei.ved a. new idea 

If rcwvds a.re to be given at :ill they should be granted lor d1SCOvenes of broad pnnaplc:s 

and a.lso for the emnneermlj' studies nc:cc.sary to reduc.e .m 1m en non to pnc:ace as well as for 

the conceptlOD. ot the on11111al 1de'1 which constitutes the bas11 ot a patt.nt Consequently, 1t 

appears better to reCD!IDIZC the 'alue of the ID\ cntot as Olle element m an orgamzanon rather 

th in to emphasize hu. oarncular servu.e on some oDL or mo1e ~peufic 1nvennons 

Whtle there is thus general 'l~rccment that separate 'lwards systems for the 

mventor would be unwJSC there JS considerable opm1on that the present systems 

do not adequately reward the inventor or other employee making the truly great 

invention or contnbution \vhether m line of duty or not Howc.rer, great care 

must be used if mvcntions resulting Crom hne ot dutv work arc to be given cash 

awards To gne such a\\ards for 1nvent10ns and not ror nonpatcntablc contr1bu 

nons of equal unporrancc ~ould be unwISC discnmmanon, as already noted To 

give them tor all unpon:ant contributions would 1t lS tclt, create a \cry bad 

i.1tuat1on Howe\cr, if c.:ish awards for lmc-of duty contnbunons arc limited 

i.tru:tly to the trulv grc1t 1mennons discovery, or other achlC\cment and arc 

gnntcd by some o\.cr 'lll ooard or committee with broad authority as to the 

amount or the awards 1t 1s i:clt that inventors 'l!> well 'ls other cmplovccs, would 

be adequatclv covered 

The fact that some mdusu.ial hrms and the Bnt1sh Go\ ernment have specific 

systems mr rewarding m'entors which operate independently ot general mcen 

nve and suggestion sutcms applicable to all employees has been c1rcfully con 

i.1dcrcd The condiaons :ind arcumstanccs pre' ailing 111 these cases arc basically 

different from i.hose e'nstmg with respect to the management or employees of 

the United States Go\crnmcnt, consequently 1t lS the bd1ct of the committee 

that a separate awards S\stcm tor Federal employee 1mentors would not attaJ.n 

the ob}cctlvcs sought as cdccn.,cly as a broad integrated program mcluchng all 

classes ot cmplovecs 

B TYPES OF AWARDS 

The nature and type or awards to inventors m.Ight include 

1 Retention ot comm.crc1il rights by the mventor, 

:z Cash awards and bonuses, 

3 Pay increases 

4 Prom0t1ons, 

5 Pubhc rccogmtion and honors 

Rctcnnon ot commcraal rights by the mvcntor 1s sometllllcs rcg-irdcd as a 

form o£ reward to the patentee The umlonn patent policy for the Government 
provides ~ wder.-~q. ~rpp~s, the commerciil ngha are letc to the 

mventor ~to I-~ ih~e:fnmcnt for government'll purposes 

The cash -award with subsequent bonuses dependent upon the proven con 

unucd usefulness and vilue of the 1nvcnbon 1s a most workable form of award 

for outstanding contribunons that are disnnctly beyond the normal annapated 

producnvity of the employee-inventor 

CommercJ.al organizabons m their e"l:plo1tation o{ patentJ have recognized 

that the new invention to survive must usually p:u.s progress1,ely through the 

patent, the development the market introductory (termed by Dr Kcttcrmg 

'shirt losmg ) 'lDd the profit making stages A mmimum ot 3 years for the 

complete launching of a new invcnnon to the profitable stage is typical ot Amer· 

ican pracnce ThlS indicates that many 1nvcnbons will not demonstrate their 

true worth tor some years attcr the patent 15 allo\llred ThlS Tirould 10dicate that 

the awarding agency should be authonzcd to male an adequate cash award for 

evly recog01t1on of a patent with authonty to mal..e turther subsequent cash 

1wards over several years it development or accrued benefit should Justify such 

acnon 

Assured pav increases might serve as an mccntive to imennon but in presenbng 

this type of a\vard the Government assumes the permanent value ot the inventors 

lfCD,eral services h.is been increased by an increment equal to the award increase 

and this for all future Government employment ot the indlVldual 

There are m.mv mventors who although thcv wor!.. diligently at the rul 

present only one mcr1tonous mvennon m their lifetimes runher if the mven 

tion proves to be one ot mcreasmg viluc with its } cars ot use 1t would be most 

ddlicult to dctcrmme equitably subsequent awards m terms or addittonal pay 

increases As an 'lW'U"d method, a pay mcreai.c !or outstandmg inventwns 1S 

not as eqwtable and workable as the cash and subsequent bonus rew'lrd 

In many cases, a very important effect of an outstanding ID\ estiganon or re 

11earch enterprlSC of the cmplovee m\entor will be th'lt his more acnve general 

performance as 'ID employee instead ot h11 speail contribunon as an 10ventor 

should be recognized The demon:.tranon of unusual mventn e abtl1tv ma) be 

a manifc:st'ltion of the employee s ability to taclJe succcsstulh problems of m 

creasing difficulty and compleuty, thus 1usnhc1blv meriting promotl.OD. to a higher 

grade ot position 

In public recogninon and honors to outstanding imentors the Go\erruncnt 

ot the United States h'ls an opponumty ot making .i gre'lt \.Ontnbut1on to her 

i;aenttfic and technological advancement To manv mdiuduals swtable honors 

awards are much more mc'lningful than monetary re\\'lrds Consequently, the 

ulue and importance of th1S type ot award must be recognized and programs 

!or honors awards should be strengthened 

SpccUically, a graduated system of honors and recogmnon to dlSCoverers a'ld 

1mentors would inspire real compc1:1tive research 'lnd dC\elopmcnt Within 

the Government departments and diVISions, it might be org-imzcd most m· 

tcns1vely and opcnted with a high degree of cffecn\eness Those m Govern 

m.ent who have made the most outstanding contnbunons to research and du 

20 

covery should be advanced to a high levd ot recogmaon and th•s top level honor 

should be m compettaon w1th the ~anons best 

C DEll:ICIENCIES AND LIMITATIONS IN PRESENT LAWS COVERING 

AWARDS 

The provlSions of custing laws tor granbng cash awards have already been 

dlScussed under section II The many ba:.ic 1ncqwttcs, o\ erlapping ot eligibility 

requirements, and other problems mherent m these laws are worthy of detailed 

c. "l:ploration 

Under Public Law 600 (i9th Cong), the Admin11trat1\e E"l:pcnscs .c\.ct ot 

1946, all avwan officers and cmploycei. ve eligible tor awards However, more 

than one half the total avil1an officers and cmplovees in the Federal Government 

are mchgible for awards under either Title VII or Title X of rhe Classification 

Act of 1949 An employee inventor may theretoie be eligible under one l 1w 

and ineligible under another law, oi he m'ly be eli1.•ble under several laws The 

pr1DC1pal C"l:clusions under the Clau1fic'ltton .\ct ol r949 relate to \\age board 

'Uld certain postal emplovces 

Under Public Law 600 (;9th Cong), c'lSh a\\ards tor suggcsnons are limited 

to not more than 5 percent or the esnmated first vear s net sa,,mgs In the i.ase 

of suggcsnons resulting m sa,mgs ol more •h'ln Sz ooo, the aW'lrd 15 b'tscd on 'lD 

even smaller percentage ot the :.a\mgs Lnder Title X ot the Classification .\cc 

of 1949, cash awards whether based upon 'l suggestion or other personal ac 

compllSbment, are lmutcd ..o not m e'\.cess ot ~s ocrcent or the esnm.ued nrst 

year s net sav10gs or an amount equil to three times the step mcrease ot the 

employees grade Thus tor 'l suggestion which results m 'l net aavmgi or S1 ooo 

lor the first ycnr an emolovcc can rccei\ e up to S~o under the pro\ 1111ons ot one 

law and up to 5:!50 under another law 

Furthermore the amount ot an "IW'ud under Title"{ ot the Cl'lssihcanon .\t.t 

ot 1949 is geared to the emplo\ee s grade 'lS much 'lS to the mtrmsic worth ot .he 

contribution The higher the grade or he cmplo\cc the greater 15 '115 ~n 

ThlS occurs because the ma'\lIIlum cash a\lard p"lV'lOle for an emplovee in gr"de 

GS-3 1S $2.Jo, tor an emplovee m gr'lde GS-;, S_,;5, tor 'lD cmolovec m gr"dc 

GS-n, $6oo, tor an cmplolec in gnde GS-15, $750 C\cn though each would 

make the same contribunon to the efliaencv or cconom\ or the organiz'laon 

There are smular mcons1stcnc1CS 1n '1pplv1ng the respectt\ e laws to mdiv1dual 

cases ror C"l:'Uilple, an cmolovcc in gnde GS-~ ~ho recenes 'l salary •ncrc.lSe 

for supcnor accomplishment under Title \tll or the Classittc'ltton Act of 1949 

and rem.ams m that grade for 6 years would m that penod receive the amounr 

of $4,80 If gi'en a two step increase or a three step mcrcase und\.r Title X at 

the Classllicabon -\ct of 1949, he \llrould realize 5960 or ~1 .1.40 respccnvdy, m 

a 6 year per10d For an employee in GS-15, a three step lDU"case would, over a 

penod ot 6 years amount to a total mcrcasc m income ot $4 500 

Other factors su<.h as whether a suggesnon 1S in lme of duty or ouc51de the 

21 
REF ID:A71829 

nonnal rcqwremcnts of the dunes of (the employees) pos1non" are brought mto 

play m determmmg kuids and amounts of awards. In some cases, an award for 

.a contribunon 'm lmc of duty" may be m e'CCCMI of an award for a contnbunon 

wluch JS dctermmcd to be "outside the normal rcqwremcnts of the duttcs of 

(the employees) poS1non" 

On a Government wide basu, other duparincs e'Wt Under Pubhc Law 6oo 

(19th Cong), a total of $25,000 m awards may be made m one fiscal year by any 

deparnncnt or agency, regardless of the size of the department or agency Also 

:i maxunum of Sx,ooo may be pau:l tor a suggesnon These prov1S10ns do not 

apply to the Department of Defense It seems illogical. to presume that only m 

the Department of Defense can the employee, including the employee mventor, 

make the Lnd of contnbunon that may result m an award m excess of $1,000 

The rci.tnc:tlOn that a department, other than the Department oC Defense, may 

not male cash awards aggrcganng more than $25,000 m any one fiscal year m 

one mstance forced a large Federal agency to repress Its suggcsnon program be 

cause the $2,s,ooo lmutanon had been reached bctorc the end ot the fiscal year 

In hm1tmg the amount ot cash awards or pay mcreases to a percentage ot the 

first year s net savmgs an inadequate reward results to the employee inventor 

who may make the infrequent truly outstanding contnbution In the invention 

field, particularly, ma"<llI\um savings arc gcncrallv achieved sub.equent to the 

ljrst year in which the idea was developed 

Fmal gnnts of effiacncy awards under Title X of the Chsi.16.canon .\.ct ot 

1949 may be made only by the over-all agency cffiCJency awards committee sub 

JCCt to the approval ot the head of the agency HowC\cr, authority to grant 

within grade pay mcrcascs as awards for superior accomplishment under Title 

VII of the Clai.s.Uicauon \ct of I9.J9 may be delegated b) the head of the agency 

to the heads of consntucnt bureaus or other oJlici tls Authority to gr:int .iwards 

tor suggcsnons under Public Law 600 may also be deleg-i.tcd 

No pro\uion JS made in any e-asnng law for 'lwarding the employee inventor 

tor contributions of value to other agencies or departments of the Federal Gov 

ernment In the final analysis, each agency JS an 1ncegral part of the total U n1ced 

StatcS Government An employee m any department or agency 1S subject to 

broad general laV\os and rcgulat10ns applymg throughout the Federal Govern 

mcnt The undcmab1hty of thinking of an employee only with respect to bu 

own parncul:ir agency or department was mchcated by the Hoover Commiss10n 

m 1ts report on Personnel Management when 1t stated ' the executive bnnch 

rccogruzcs but u. not dealmg adequately with the problem of transfernng 

competent personnel from one agency to another' Rewarding employees 

for contr1bunons of benefit to the whole Government SC1'VlCC would be a step 

forw.ard m the concept of an mtcgratcd Federal personnel program 

The Bureau of the Budget is mvesngatmg the problems ot agenCJcs m adimn 

istcnng the diverse incenti.ves and awards programs, currendy authonzed by the 

vanous laws, with a view toward obrunmg a Single statute to provide for 'l 

Ul1lform comprchcmivc mccnnvcs and awards program tor all Federal employees 

D DEFICIENCIES OF SYSTEM WHICH PERMITS AWARDS UNDER 

SPECIAL DEDARTMENTAL STATUTORY AUTHORITY 

It will be noted, &om the foregmng ducuss1on under sCCbOll II that, pnor to 

August 2 1946, only .6.ve Government a.genaes were specific::uly authonzed to 

reward civiluin employees \Vlth cash payments for suggesnons or mvennons 

This evidently d1scrmunatory treatment OI the employees of those agco.C1CS not 

havmg special statutory authority to make awards for suggcsno111i or inventions 

was obviated, at least m part, by the enactment of Pubhc Law 600 ( j9th Cong ) 

on August 2, 1946 

Two agenCICS-the Department o! the Interior and lhe Tennessee Valley 

Authonty-i.ecm to have retained to some C'Ctcnt their special statutory authorines 

with rci.pect to rewardmg inventors They h.ive indicated that m pra.ctlCC, they 

have made no more than a slight 'lpplu.anon oi these spea.tl author1ncs smcc the 

en.a.ctmcnt oi Public Law 600 

Moreover pr10r to r943, the special statutory authority of the Dcpvtment of 

the o\rmy \Vas bunted to awards 1n the held ot ordnance The special statutorv 

authority ot the Patents 'lnd Design Board w.is, prior to 19.1.6 lDd snll JS conhncd 

to the field ot aircrah design 

It will be obi.crved JD the discussion under section n that the SC\cral. spcaal 

statutory authonncs pcr•am to spcual groups and special s.ibJcct matters 

there arc vananons both \'lllth respect to ..he .imounts which mav be .awarded, 

either monthly or 'lD.Duallv 'lD.d there arc v.i.nanons in the sources ot the tunJs, 

1 e , appropr1ano111i and mcome uom llcensmg 

None OI the hve :igcnc1c.s "'Cportcd any JLffu:ulty wilh respect to :idmimstranon 

under such starutory authority On the contrary, the Deparnncnt ot the lntcnor 

and the Tennessee Valley Authontv have 1ndiuited that thcv \tJSh ..o preserve 

thcu spC\.•.i.l starutory authonncs and Jis1..rcnon in :idm1nistcr1ng their awar~ 

progr:uni. 

23 
REF ID:A71829 

IV FINDINGS AND CONCLUSIONS 

The desir'lbdity and the advantages to the Government of rewarding mventors 

are such that we cannot afford to fad to tale pos1t1.ve measures to reward present 

mventive achievement if we are to hope to reap the nch potenaal harvest 

There have been occas10nal doctrinaire attempts to categonze and to postulate 

umform. charactcnsncs for mventors However, the cunt to whu.h they are 

money-minded, hle the e'ttent to which they appreciate or wdl be stunulated and 

sanMiecl by prafess10nal recogmtl.OD vvies considerably To appeal to as many 

potennal mventors and chat as many inventions as possible, it 1s only the better 

part of WlSdom to suggest that several types of awards be made avadable 

It has been noted elsewhere m th15 report paro.cularly m sCCtlon IV, that 

present general awards svstems, and specUic provisions ot law tor rewarding 

mventors in parncuhr departments, are inconsistent and over lappmg They 

permit possible meqwties and mal..e proper .idmmistrat10n ol: the systems 

dllficult 

To avoid charges 'lDd imputation~ ot parn tl1tv 'lDd tavor1nsm and to pro\lde 

a well rounded program tor swnulanng ert.'ltl\e contributions a separate system 

for re\'llardmg mventors should be re1ected Instead, .idequo1te prov1s1on tor 

rewarding m\cntors should be made m 'l bro1d 1ntegr:1.ted program relatmg to 

all types of contnbunons 

Pending adopnon ot the well rounded program whtch the committee recom 

mends, more aduntages might be derived trom the present systems Although 

e"DSt1.ng laws aie obVlOUSly defiaent m manv respects in their 1D1pact on the 

employee inventor, m order to obtam the m.i.'\UD.um adv'lntagc to the Govern 

ment and the public within the framework ot C"llStlng laws, the specUic benefits 

and rewards possible to the employee inventor might be ascertamed and d~ 

scmmated The ultlm.atc ob1ecnvc, however, would be to attam more adequ ltc 

and sat1.stv1ng recogruuon and reward for inventors through new basIC legislation 

for all Federal emplovees '\ppropnate provlSlons tor mventors should be in 

eluded many such leg1sl'luon 

In considering the broad problem the tallowing pnllClples should be guide 

posts 

I ASJ.y program developed should be forward looking, i e , it should recogmze 

that the goal is the encouragement of inventions 'lDd contnbunons 

2 In encounging and promoting greater mvennveness, the rewards system 

should afford some Be'\ibdity and a hberal scale of awards for the purpose of 

swtably rewarding outstandmg inventions 

3 To mlDlmIZC the Jeopardy or prqud1CC to research programs which might 

result 1£ all emplo:tees become m\ennon CODSClOW, we recommend that the 

v.orJ.. of employees be considered carefully for the purpose of 1ssunnce that all 

e'\traordm.u-y contnbunons-whether ot an invennve nature or not-are swt'lbly 

recognized 

4 Not all mventors should be automatu:al.ly rewarded Awards should be 

made only for useful mvennons beyond the call of normal duty The speafi.c 

inventive contribunon made by an employee should be one which his co-workers 

recognize 'lS mennng an award, otherwJ.Se, the result IDlght be to damage morale 

and consequently to lower the work output of other em.plovees 

5 PoSitive measures should be taken to assure adequate d1Ssemmat1.on of mformanon on new d1SC0\enes Full unhzation of new idcai. tends to 111Spue 

the mventor and lead bun to greater contributions 

A RECOMMENDATIONS FOR NEW LEGISLATION FOR A COM· 

PREHENSIVE INCENTIVES AND AWARDS PROGRAM FOR 

GOVE'lNME°"T EMPLOYEES INCLUDING INVENTORS 

Based on the 6ndmgs and conclusions of the committee the Chairman of the 

Government Patents Board should endorse new legislauon h 1v10g as its ob]ecnve the mtegrat1on sunpl1ficauon 'lnd hber1.hZclt1on or all '\Wards progt"llib 

Such leg1sl.iuon should oermit rew'lrdmg ot emplovees m'lkmg all tvpes ot 

meritorious U>nuibutions mdudmg d~cover1ei. ot b.is1c SCientt=iL prmuples as 

well as in\entors 

1 Apphcat1on of Proposed Law to Inventors 

The .. omm1ttee recommends that the requirements and appl C'lt1on or a pro 

posed new law provide that the lollowmg prmc1plc.s be obsened m the treatment 

of the emplovee inventor 

a lll cml1an em plo\ et!S 07 the Go11e1 nment should be eL,.ble .\.I.though 

th~ ICC:Ommend ttlon 'lffi.rm1mely includes only a'tdian employees the 1.om 

nuttee sees no reason whv the reu>mmcndanon should not cover m1btarv 

penonnel 'lS '"ell 

b Employt!es most lllct!lv to p1odu1.e in11ent1om by 1eason of the nature of 

then emf'lovment m au1gned diitze~ ~hould not necessanly be e-r:cluded by reason 

of srich employment HO\\e\er tor such employees to qu.ihfy for an award, 

their 10vent1ons dehnitelv would h·ne to be outstandingly bevond the normal 

requirements of their worl.. 

c T1110 basic types of 11111mds .hould be 1ecogni=ed fo1 employee m11enta1S 

The hrst would be cash tu11m ds with prov1s1on for a ~ulficiently large monetary 

award tor the 1ntrequent 1n\ennon ot truly outstanding value, and the authonty 

for additional cash .iwards over an eunded period ot several years if subsequent 

developments or accrued benefits should warrant it The second would be 

honm a111ards Honor awards are parncularly signmcant m some bureaus and 

m some fields of SCienn.iic spec1alizanon The honor awards program should 

be strengthened and promoted An award of either type should not necessarily 

preclude the grant1.ng or both types of awards, under appropriate arcumstances 

25 
d Th~ sh~bU~a~~/Je value of Uie cont11butzon \uthority 

should be confem:d for detcmunmg the C"ttcnt of the cash award for an 1nven 

tion not only on the basis of savmgs to the umnediate org'Ulization withm the 

first year or other period but m a proper case on its value to the Government as 

'l whole, espeaally u the value of the contnbut1on cannot be determtned in terms 

of dollars Consideration should also be given to its value to the pubhc in 

deten:mmng the award 

In connectJ.on with these recommendations the committee believes that ( 1) 

the fact of mventton u pernnent to the performance and ratmg of the employee 

mventor and should continue to be considered m tccordance with C"'lSting prac 

bees m connection with promonons or other recogmnon 'lDd (2) the granting 

of an award should not be dependent upon whether the emplovee mventor retains 

the commercial nghlll under the CXlSllD.g uniform patent policy of the Government 

The retention by the inventor of comm.erc1al nghts 1n an 1nvenoon while a ftctor 

to be coDS1dercd, should not preclude the grannng ot a cash award 

2 L1m1tat1ons on Total Funds Agencies May Expend ror Awards 

The comm1t1t:e recommends against t:Jtabluhment of an ouo all ce,Zmg figwe 

for e11t:h agency l1m1ung the total funds to be spent each yt:m on ID awartL pt of' am These ceiling .figures are essenoally arbitrary 'lDd productive ot in 

equines The developments of a parncular year m'ly be unpreaiClllble and 

deuatc widely from the p'lttern, resulting m :in in1usnce madequacv or awards 

and impaired morale These lurutations in effect g'lmsay tne mutual benefits 

to be denved &om the 'lwards prognm 

3 Awards Involving More Than One Agency 

To cover the case when the mvention is of special 'alue to a departme"lt other 

than the one m which the inventor u emploved or ~nen the imentor h'lS uam 

£erred to another agency before his former '\~ency h:is re" 'lrded him ror hio; 

imention tranJfo of funds 01 at/Jo a1rangements fo1 atumtL purpo.ieJ Jhor1ld 

be a11thm 111ed 

4 ,Rewards for Group E'fort 

Fo1 those utuatzons "' whzch credtt for the 1nr1mt1on 11 not dem ly aue an 

ind1r11dual, t/Jo e shotdd bt: authow:anon to 1 eward "" 1 esea1 ch sc1tntuu and 

collatmzl personnel directly concerrJed for inut:t1tzOnJ stemming fl om I' or1p 

qjmt nus lS an mcrcasmgly common Situation 

5 Resc1111on of Previous Awards Leg1slat1on 

In view of the comprehensiveness ot the suggested program the desirability 

of umforlDlty, and the danger of conflicting prov1S1ons if the program is superimposed on the present patchwork quilt, the comm1t1t:e 1«0mmt:ndJ t/Je resas 

uon of all prt:t11ous gt:t10 al awards leg11lauon and to the eztmt practicable the 

, esczmon of all prt:r11ous spt:t:ial prouuions of z,,,,, gouo nzn g rewards for inuenlors 

in 1nd1r11dU11l agencies 

26 

B RECOMMENDATIONS WHICH MAY BE EFFECTUATED IMMEDIATELY 

WITHOUT NEW LEGISLATION 

Despite the many inconslStencies m the e"DSnng laws go'erning awards to 

employees mcluding the employee inventor, there are several steps that can be 

"'&ken by Federal agenc1CS and departments to admuuster more effecnvely current 

awards programs, pending remedial legislation It u urged that the Chairman 

of t/Je Gor1emmt:nt Patents Board bring the following 1 ecommmdauons to the 

attention of the headJ of Ft:de1al agencies and t/Jat ner:t:ssary slt:ps bt: ta/(t:t1 to 

see that tAev art: can zed out 

1 Apphcatlon of Existing Programs to Inventors 

E'l:tsbng awards programs authonzed by hw 'lre m m'lny cases applicable to 

employees 1n the Government service who make mentor10us inventive contnbu 

tions and should be so construed and applied 

2 Agency Review or Ex1st1ng Programs 

All Feder'll. agencies should review their e"C1sting mcenoves and 'lW'lrds pro 

gr'llIIS ..o assure th'lt fullest pos11ble advantage i~ t'lLen or current laws as the 1 

apply to the emolovee inventor 

3 Puahc1ty 

For the purpoo;e of snmuht1ng mvenave produt.tl\1tv or emplovees agenLies 

~hould publicize through 'lppropriate med1'l the 1 'lct that emplovees m.aking 

1n .. enme contr1bunons oI me'"lt may be rewarded unaep current awards 

progr'lmS 

27 

U S IDVlllMIKT P•llTllG OPPIC 1111