Legal Incentives to Promote Innovation at Work: A Critical Analysis

Abstract

The allocation of any benefit that arises from worker-generated innovation is complicated by the importance of three separate areas of law - employment law, intellectual property law and equity - and the distinction between those types of innovation that attract intellectual property rights and those that don’t (a category that is often referred to as “know-how”). The purpose of this article is to engage with the legal scholarship on the principles that are relevant to innovation. To date, the discussion has focused on two distinct approaches - what may be termed the economic and the fairness perspectives. The former may be seen as a justification for the current regime, while the latter has focused on the perceived needs of workers (in large part in opposition to the employers). Our argument is that these two approaches are both incomplete. In an attempt to get closer to a workable framework for the effective allocation of benefits, we offer a third approach; one that is based on the practices that are central to the employer-worker relationship.

Keywords: employment law, intellectual property law, equity law, innovation

JEL Classification: K00, K31, K39