Incentives for Chinese Inventors: A Proposal for a New Inventor Remuneration Scheme with German Elements
China has stated its intention to more efficiently improve its capability to innovate by reforming its reward and remuneration system for employed inventors. Recently, a new draft Service Invention Regulation (SIR) has been published and is intended to si
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Incentives for Chinese Inventors: A Proposal for a New Inventor Remuneration Scheme with German Elements Oliver Lutze
Abstract China has stated its intention to more efficiently improve its capability to innovate by reforming its reward and remuneration system for employed inventors. Recently, a new draft Service Invention Regulation (SIR) has been published and is intended to significantly increase the amount of remuneration available to employed inventors in order to increase the level of innovation. The draft SIR follows a system and methodology similar in some aspects to Germany’s principles of defining statutory remuneration rewards. The simplification of the procedure together with fewer possibilities to make deductions will, in effect, lead to employed inventors receiving especially high remuneration. As a result, the SIR may conflict with the interests of existing research-based companies with sizable R&D activities in China. These companies will undoubtedly attempt to legally define and affirm their own remuneration schemes, but potentially face uncertainty concerning the validity of their schemes, and regular disputes with employed inventors could follow. The unpredictability of the requirements for remuneration could become a negative factor for companies contemplating R&D investments in China. It also remains to be seen whether China’s proposed rewards and remuneration incentives will have the desired effect of stimulating innovation by individual employed inventors working outside of the large well established research companies.
Keywords Inventor remuneration law China Germany Draft service invention regulation Rewards and remuneration Comparative analysis Statutory amounts for remuneration Incentives for inventors
Oliver Lutze is Chief Representative, Spruson & Ferguson (Asia), Shanghai, China. O. Lutze (&) Spruson & Ferguson (Asia) PTE LTD, 1045 Huai Hai Road (M), 42/F 4203A, Shanghai 200031, China e-mail: [email protected] © Springer Science+Business Media Singapore 2016 D. Prud’homme and H. Song (eds.), Economic Impacts of Intellectual Property-Conditioned Government Incentives, DOI 10.1007/978-981-10-1119-1_6
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Introduction
China has stated its intention to develop into an innovative country by 2020, according to the officially published 2006 policies (Hu 2011). In this regard, incentives have been found to be a critical point in fostering the desired development, and they need to motivate creative people working in R&D. An important element of an effective incentive regime is a remuneration system for employed inventors and other creators of innovative work (Fu and Mu 2014; Fu 2015). Therefore, the Chinese government is developing laws and regulations in order to incentivize individuals and encourage innovation. China’s latest draft Service Invention Regulation (SIR) aims to encourage the inventive activity of individual employed inventors. The State Intellectual Property Office (SIPO) is the leading government authority in the legislative process
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