Conference 7.286::digital

    Steve,
    
    I don't know what your job is, or whether you have a development plan,
    but if you are working towards a consulting engineer, then these things
    are expected, and should be agreed upon with your cost center manager.
    
    Mark

In our group (SDT Languages), patent applications are actively encouraged by
management, and we get a bunch of them.

				Steve

    Hi, Mark!
    
    I'm a Principle Hardware Engineer, currently doing support for an
    internal software solution.  The patents, publications and licensing in
    question are very real having to do with work I've done during and after
    hours over the years.  Even though this has represented a high degree of 
    personal cost in terms of time, personal financial resources and such, 
    all work was done on Digital's behalf.  
    
    I kept ass-u-ming that if I "did the right thing" the numbers could be
    worked out by management.  They can't, so I'm told.
    
    The "for instances" include that because of how tight things are, I was
    permitted to publish the last technical paper on condition that I
    absorbed all costs (slides, travel, per diem, conference fees and so
    forth).  The "honorarium" was voluntarily turned down for the same
    reason.  Though good to represent Digital at a refereed, society
    sponsored, international technical conference, it is of little or no
    worth to my cost center.
    
    I had a patent (my second, two still pending) issued over three months
    ago.  No word from management, yet.  No "attaboys" or anything like
    that.  All patents are, of course, property of Digital.  I don't expect
    further honorariums for patenting since it would have to come out of my
    cost center.  Though the patents are supposedly valuable to Digital,
    they are of little or no worth to my cost center.  They have, however,
    resulted in real costs to my cost center since it had to pay for the 
    lawyers used to file the patents, so I'm told.  Again, any investments
    from my cost center go financially unrewarded.
    
    I have thus far found interest in two outside companies for licensing
    the technology.  My organization is currently working a deal to license
    a different software solution with a third party vendor.  The big 
    surprise we discovered, of course, was that NONE of the royalties will 
    be returning to my cost center.  You can pretty well guess what the 
    attitude has become regarding pursuing any further licensing deals.  
    
    The problem is that the system has not been set up so that my cost 
    center can realize any financial gain through innovation that is
    sufficient to be published, patented and licensed by Digital.  Any
    investments in these are a wash as far as my cost center is financially
    concerned.  And, that puts real pressure on my superiors to avoid
    encouraging me to patent, publish or license.  Obviously, this removes
    the bulk of the incentive for me to continue pursuing innovative ideas.
    
    If my cost center can't get any money back from generating innovative
    solutions for customers, what's the point?
    
    Steve

    re: .2
    
    Boy, I'm really glad to hear that, Steve.  Is there a way worked out
    for your cost center to get any money back directly from the patents your 
    group generates?  How does your cost center justify the cost?  Are you
    also encouraged to publish or license technology?  Thanks!
    
    Steve

    RE: .3
    
    >>> they are of little or no worth to my cost center.  They have, however,
    >>> resulted in real costs to my cost center since it had to pay for the 
    >>> lawyers used to file the patents, so I'm told.  Again, any investments
    
    While there might have been costs to your cost center (such as
    awards for patents, etc), the legal fees to file the patents are
    DEFINITELY NOT paid for by your cost center.  My manager is on the
    corporate patent committee and I can provide a pointer if you need to
    pursue the exact split of patent costs.
    
    Steve
    

    I guess if the main benefit of these activities is personal
    achievement, then try to get your manager to include them in your
    development plan.  At least he can point to that as justification of
    the expenses.
    
    Mark

    re: .5
    
    Thank you.  I'm checking on that.  Hopefully, the only real cost to my
    cost center is the honorarium.  Of course, in my case, that may be
    still enough to kill interest.  Like I said, things are real tight.
    
    re: .6
    
    I wish I had a "development plan."  Is that what you get during a
    review?  Like many others, it's been a while since I've had a review. 
    I'm actually lucky.  It's been only about 20 months for me since my
    last review.
    
    BTW, I feel that my managers are good.  I don't blame them at all. 
    My concern is with the "system," at least as it's running over here.
    
    Steve

 
   > I'm a Principle Hardware Engineer

	and tomorrow they teach me to spell it ! 

		:-)

   

  I too am concerned about possible disincentives for DECcies to make
patentable innovations. There are already several strong disincentives in
American industry in general: the fact that employees who make patentable
inventions usually are not allowed to make large personal profits from them,
and problems with the U.S. patent system itself. We don't need the additional
problem of one's cost center incurring a net loss as a result of the inno-
vation.

           <<< HUMANE::DISK$DIGITAL:[NOTES$LIBRARY]DIGITAL.NOTE;1 >>>
                        -< The Digital way of working >-
================================================================================
Note 2624.59                         Morale                             59 of 60
CSOADM::ROTH "Former K-notes, NOTES11 and Vnotes us" 23 lines  20-AUG-1993 16:26
                           -< another morale buster >-
--------------------------------------------------------------------------------
.48>Maybe it shouldn't, but it is. Think about it. On a factory assembly
.48>line, people are paid to do their job from 8 to 5, go home, and come back
.48>the next day to do it again. There are no incentives to do more than what
.48>is absolutely necessary. The management doesn't go out of its way to
.48>encourage you to do better, to learn, to aspire to help the company in
.48>other ways. Consequently, people do the bare minimum they have to in
.48>order to keep their jobs.

Off the subject a bit... today heard f/s rep telling of a memo that he
saw... they had just completed a LARGE computer move ("DECmove?") for a
very important customer. Seems that due to internal money policies, the
local cost center gets NO CREDIT for the income, except for expense
relief...  i.e. If the local f/s office gets the customer to pay $200K
for the move and the labor costs are $20K, the local cost center gets
$20K of expense relief and someone else on up the line gets the income
credit.

Where is the incentive for the local branch to go out and get this kind
of business? I thought the trend was towards 'entrepreneurship' but this
smacks of 'business as usual'- taking the $$ and credit for business
that the uplines did nothing to develop or deliver.

Lee

    Steve, I don't think they can deny you your patent bonus.  That's a
    Corporate Policy, or at least US-wide.
    
    The company has contractual reasons for wanting as many patents as it
    can get.  Your cost center manager should be severely disciplined if he
    is disregarding this and discouraging patent activity.
    
    I'd take this up with somebody higher up if it happened to me. 
    (Fortunately, my management supports my patent activities, even though
    they are primarily of interest to a part of the company that I no
    longer work for.)
       fred

Re: .4

I don't know the details of how the "costs" are financed.  I do know that we
are also encouraged to publish technology (unless it's patentable) and we
do some licensing as well.  Not having personally been involved in any of
this (no patents yet for me, but I keep thinking about it), I will have to
leave it to someone else to fill in the nitty-gritty.  (I'll ask my
group manager if she would care to comment.)

Actually, "encouraged" is too mild a term in this group....

				Steve

    re: .11
    
    I don't know about the patent bonus as far as the latest patent goes. 
    ALl I know is that the latest patent issued more than three months ago
    and I've been given no formal notification.  I found out because of
    a company that wants me to send them money to get it framed.  Surely
    after three months there would have been word.  Yes, I've drawn this to
    the attention of my management.  That's when we had the discussion
    about how patents don't bring anything into my cost center and that
    this was the reason for the relative disinterest.
    
    Oh, the patent was expected to be issued at this time, BTW.  I had been
    involved in the defense of the first rejection.  (Nearly all patents
    get a first rejection.)  The last time I spoke with Digital legal they
    had told me the then three patents pending were all in final rejection.
    This was, of course, in error.  The third patent has been defended
    already and is expected to issue within a few months.  Haven't yet had
    to defend patent number four.
    
    I'll check on who gets socked with the patent honorarium bill.
    
    Steve

    Digital gets the bill, why should you worry about what cost center
    accounts for it?  Frankly, it seems as if your cost center doesn't care
    about innovation or professional development.  That's what it looks
    like.  If your patents would benefit some other organization in
    Digital, then you should at least ask them to sponsor your activities. 
    Maybe they'll hire you!  (hint, hint)
    
    Mark

    re: .14
    
    I have to worry about which cost center has to pay the bill because if
    it's MY cost center there is resistance if I can't show money coming
    in as a result of patenting, publishing and software licensing.  
    (Developing the technology was not at issue as we support internal
    customers and have used the technology to bring in revenue from them.)
    Patents, publications and software licensing can't bring money into my 
    cost center even though they are of tangible worth to Digital.   The
    problem is that they become liabilities for a cost center that gets no 
    returns from these activities yet is expected to financially support 
    them.  So, the system is set up to discourage patenting, publishing and
    software licensing that originates from cost centers like mine.  But,
    patenting, publishing and software licensing are major ways that
    companies like Digital make technology available to solve customer 
    problems (and make a buck while they're at it).  The way the system is
    set up now seems to counter the message Digital is trying to tell the 
    world; that we are a company dedicated to using innovation to solve 
    customer problems.  How are we going to do that well if the system 
    penalizes a cost center like mine for providing customer solutions
    (via patenting, publishing and software licensing)?
    
    Steve

re .15

Steve,

Some CC *somewhere* does get the revenue, if there is any. Can't you JV some
or all of your patenting, publishing and licensing expense to them?

--RS

    re: .16
    
    Hmm.  I'll check with my CC manager ...
    
    Steve

    Is there anyone from Finance following this string?  If so, please help
    out.  My understanding (from Finance folks) is that *cost* centers are
    just that - *cost* centers and are in no way designed or supposed to
    generate revenue for that center.  Profit centers realize profits, cost
    centers are supposed to break even and spend the money in their budgets
    as they were supposed to.  It sounds to me like the cost center in
    question did not *plan* on any patents from this engineer and therefore
    will not break even - they don't have budget to cover it, therefore
    it's not "encouraged."
    
    Any other thoughts?
    
    Susan

Re 2627.18

Susan, I have not been following this whole string but a simple definition
of Cost Centre from a Digital glossary is as follows:

	"The lowest-level unit in the company in which specific costs
	 or expenses are accumulated and compared against budget."

Shalom
Baruch

    Interesting point about what a cost center is supposed to be.  In our
    organization, we are responsible for bringing revenues into our cost
    center.  The idea is that if we have anything to offer, then others
    will be willing to pay for it.  Most of our customers are internal to
    Digital.  But, we sometimes provide services for customers outside
    Digital as well.  And, we charge for it.  I think that we usually
    charge another cost center, but there is a mechanism for charging
    outside customers for our services.  I've been told, however, that
    there is no way for us to "charge" for patents, publications and
    software licensing.  I have more formally approached my cost center
    manager about this in response to ideas posted here.  I expect to share
    any responses when I get them.
    
    Steve

re: .18

In the U.S., there are no 'Cost Centers'.  A few years back, they became
'Centers of Control'.  I can only speculate, but notice that the new term no
longer has the word 'cost' in it, implying that these organizations are expected
to do more than generate costs.

Bob

Re:                  <<< Note 2627.18 by RAGMOP::FARINA >>>

>				It sounds to me like the cost center in
>    question did not *plan* on any patents from this engineer and therefore
>    will not break even - they don't have budget to cover it, therefore
>    it's not "encouraged."
    
Perhaps the cost center was not granted the budget to cover it.  Just because 
it's planned for doesn't mean it's automatically included in the budget...

-  David

    The cost center does indeed, I believe, pay for the honorarium.  Quite
    frankly, this is a low enough cost that it isn't really worth tracking
    in a cost center of sufficient size.  The legal fees and patent
    application fee are definitely *not* paid by the CC -- these can be
    very expensive and the patent committee decides how best to invest
    in proposed patents for the corporation.
    
    Patents have a high intrinsic value for the corporation.  Especially
    since some of our top competitors have very healthy patent-generation
    programs, we need to continue to grow our patent-generation capability.
    If you have a good patentable intellectual property  and your CC is
    unwilling to accept the cost of the honorarium, it is possible that
    another funding source could be found -- worth a try, anyway!
    
    Regards,
    Leslie Klein

    re: .23
    
    Perhaps that's the problem then -- my cost center is so small that
    honorariums are a big deal and become a problem.  I note that if I were
    to go for a fifth patent, we would be talking $5K in honorarium to come
    out of MY cost center.  So, looks like I'll be stopping at 4.
    
    Steve

Re: A bunch

Revenue is credited to "Booking Centers". Even in the Field, revenue doesn't 
get credited to Cost centers (they may have officially changed their name to
'Centers of Control', but they are still commonly called Cost Centers).

Cost Centers are there to manage expense budgets, period. And theoretically, 
the best a cost center can do is to break-even. They are not supposed to make 
a profit, although some misdirected cost center managers seem to think that is 
goodness.

regards,

Jim
Ex-Cost Center Manager

This is ridiculous!

The company has a published (corporate) patent awards program and your manager is
opting out. Please DON'T just drop this. Somehow we have to knock some sense back
into this company!

-Mike-

    Update ... $500 bucks was recently put into my share draft account for 
    the patent that issued last May.  This is the first notification I've 
    had from anyone at Digital of the patent having issued.  I just found 
    out from my regular source (the folks that want to send me a plaque of 
    my patent for a fee) that a week ago patent number 3 was issued.  
    Patent number 4 is still pending -- hasn't yet had first rejection.  
    My cost center manager is going to look at the paperwork that comes to 
    him this month to see if the honorarium came out of our cost center.  
    He saw no paperwork on it.  I was told that the honorarium for having 
    published a few months ago would have come out of our cost center, so 
    I've voluntarily turned that one down.  But, I need to wait to see 
    what's going on with the honorariums for patents.
    
    Steve

    FYI, in my experience it *always* takes a long time to get the patent
    bonus.  I was once told that they are only paid once per quarter for
    the preceeding quarter -- so the delay could easily be over 4 months.
    
    I don't know about my current group, but my prior group had a specific
    budget for incentives, e.g. employee awards and (I presume) honoraria.
    This wasn't at the cost center level, it was over a group of several
    hundred, so a single person getting several patents and an honorarium
    wouldn't blow the budget.
    
    The formal congratulations letter is supposed to come before the money,
    but it doesn't always.  
    
    About the honoraria -- if a cost center has a budget of even $250K/year, 
    one honoraria is 0.2% of the budget.  Maybe all I'd better say is that
    I didn't know that a small fraction of a percent variance was so
    serious that it breaks the budget.  Of course, if the manager feels
    that there's zero value in presenting papers, I can understand it.
    
    		Enjoy,
    		Larry

    I've been discussing this issue further with my management.  I've been
    told that I've made my point and should go ahead and accept patent
    honorariums.  Believe it or not, it's all very friendly.  It does hurt
    to not get other aknowledgement or to feel lack of support.  But, 
    they've convinced me to keep trying and pushing for innovation over the
    long term.
    
    Steve

I think solving the license fee distributin is quite straightforward.  
(Well in Digital nothing is straightforward, but this is solvable.)  If 
there is a company that is willing to pay for a license or the right to 
sublicense the technology then determine who the sales rep for that account 
is.  If one is not defined then ask the sales or branch manager to assign 
one.  You can find the sales person by calling the closest sales office 
(listed in the back of the phone book) and telling whomever answers who you 
are and what you are looking for.  Most offices have this on line, but not 
necessarily accessable to all.

Explain the revenue potential to the sales rep.  There are a couple ways 
that come to mind quickly.  A service contract can be drawn up that 
includes some consulting (if the licensee needs some of your time), and the 
ability to license and grant sublicenses to the product or technology.  
This could be done with a fixed price or Time and Materials contract.

Booking centers in the field can also create part numbers for one-off 
sales.  A part number could be created for a license or set of licenses 
that could be then sold as an easily quotable unit.  You may want to sell 
consulting, the right to relicense, and licenses themselves as three 
separate transactions or bundle them together.

There may well be many other ways to manage the paperwork.  To get the 
money to your cost center JVs can be done.  You (or your CC manager) can 
negotiate the transfer rate.  It does NOT have to be pure expense relief.  
You may negotiate for 30% of the first 50K and 75% after that.  Don't 
forget to cover your expenses and define if they come from the gross or the 
net.  You may have to travel to the licensee, their first customer, etc.

A project number can also be set up that allows the engineering CC to 
directly bill your time to the field CC that the booking center credited.  
I would hate to have Digital temper patents and technical developments due 
to silly financial practises.

Matt

p.s.  I don't have access to my dictionary currently and so appologize for 
the potential misspellings above.  mh

    re: .30
    
    Thank you for the suggestions.  We are working with a licensing org
    within Digital with one software solution, which is getting us no
    revenue.  But, I am pursuing another and will likely try something like
    what you are suggesting, perhaps also involving the licensing org.
    
    Steve

Steve,

Perhaps being far from 3M taints my views, but I would try to reach the 
sales office IN PARALLEL with dealing with the licensing group.  My 
experience with the licensing orgainization is that they are skilled at 
tracking fees, not necessarily in creating new business models.

Hope things work out for you and Digital.

Matt