Study finds 1 in 4 employees withhold inventions from employers, impacting business innovation

A new study by the Coller School of Management at Tel Aviv University reveals that one in four employees in commercial organizations withhold inventions from their employers, potentially causing significant damage to businesses, especially in innovation-driven industries. The research, published in the Academy of Management Perspectives, is the first of its kind to explore this issue from a management perspective, rather than a legal one.

Led by Dr. Sarit Erez, in collaboration with Professors Yaniv Shani and Abraham Carmeli, the study uncovers troubling data about invention withholding. “Our study found that 27 percent of employees in commercial organizations have withheld at least one invention from their employer,” Dr. Erez said. “What’s more, nearly 30 percent of those employees admitted that they intended to use the invention after leaving the organization — either for personal gain or as leverage with a new employer.”

This practice can severely affect companies, especially those that rely on the innovation of their employees to stay competitive. "In knowledge-intensive industries, success often depends on the ability of employees to come up with groundbreaking ideas," Erez continued. "However, employees face a dilemma when they invent something: should they disclose it to their employer and give up ownership, or hold onto it in hopes of capitalizing on it later?"

Legal frameworks typically grant companies the rights to inventions made during employment. Many employers also reward employees for disclosing their inventions with financial rewards and recognition. However, these incentives are not always effective in preventing withholding. "The emotional connection to an invention, fear of not getting credit, or dissatisfaction with management can all contribute to an employee’s decision to withhold their ideas," said Erez.

The research team surveyed 199 employees through an anonymous online questionnaire, asking them to report whether they had ever withheld an invention and explain their motivations. Some respondents mentioned a sense of personal ownership over their inventions, while others cited a lack of trust in management or dissatisfaction with compensation. One respondent described it as “holding onto something personal that I poured my heart into, only to be afraid the company would take it away.”

In some cases, withheld inventions become the subject of legal battles, with companies claiming ownership over innovations created during employment. “In my legal practice, I’ve seen numerous cases where employees leave an organization and either join a competitor or start their own company, using the invention they developed under their former employer,” Erez explained. “These disputes often end up in court, but legal tools don’t always resolve the underlying issue.”

To address this challenge, Erez and her colleagues developed a new measurement scale to assess employees’ tendencies to withhold or disclose inventions. The scale highlights that withholding inventions is a distinct behavior, not merely a failure to disclose. “Offering financial incentives might encourage disclosure, but it won’t necessarily stop someone who is deliberately withholding an invention to use outside the company,” Erez noted.

As the study concludes, the researchers urge businesses to take this phenomenon seriously. “Employers need to recognize that invention withholding is a widespread issue,” Erez said. “By developing better management strategies and addressing the emotional and psychological aspects of this behavior, companies can reduce withholding and avoid costly legal disputes.”

The team is now developing practical tools for employers to foster environments where employees feel confident and motivated to share their inventions, ultimately protecting both business interests and intellectual property.