- Fill in an internal form
- Have a chat with an internal lawyer / patent expert
- Receive a (small) payment if it is submitted to the patent office.
- Receive a (bigger) payment if the patent is granted.
- Receive a (huge) payment if the patent is used / sold / cross-licenced.
The exact process and payments will depend on country and company.
And, yes, it is possible to game this system. For a good study, read "Surely you're joking, Mr Feynman" http://books.google.co.uk/books?id=Z7g-BAAAQBAJ&pg=PT170&lpg...
That said, they probably didn't mean that :(
And with all the complaints you inevitably read whenever an interviewing thread happens about candidates unable to code up FizzBuzz, you can guess what the level of "ordinary skill" in our industry is...
IBM's past technical disclosure bulletins (TDB) [I think they stopped them a while back] suggest that there wasn't "always" pressure just that they realise[d] that their patent portfolio is one of their greatest assets - strongly encouraging employees to flag apparent innovations (and getting upstream oversight of those innovations) means that IBM can make the most of the inventiveness of their employees though.
The public benefit is early disclosure of every possible innovation and the TDB helped to disseminate details of tech that may not have been well known.
I can't say how the bonuses are handed out once a portfolio is sold. Ideally, you'd guess the inventors of the "better" patents would get bigger bonuses. The most likely scenario, unfortunately, is that the inventors get nothing, and very likely are not even aware. It's a shame inventors are so unaware of the value companies reap from their IP.
On issuance, you just get a plaque.
To summarize, do not confuse bad cases from good cases. You cannot have a blanket statement of the type, "some people are proud of their open-source contributions ... I was surprised about it".
My understanding is that before patents, people and companies would invent but keep their invention a trade secret for as long as they can, which meant they had exclusivity to the invention. Patents allow such exclusivity for a limited period of time in exchange of disclosing the invention and losing rights over it after a specified period.
The patents applicability criterion correspondingly includes non-obviousness which is to judge if someone else could come up with the same invention without investing significant time and effort or not. Majority of the ideas are "supposed to be" ruled out by this criterion.
The state of the affairs however is that most obvious of the things get patented because (1) obviousness is unmeasurable, and (2) searching the prior art fully is impractical.
Short message: You cannot call all swans white simply because most you see are white.
The truth is, the vast majority of software engineers don't even know what a patent is. Of the rest, some are neutral, some are pro-, and some are anti-software patent. Of course, you only ever hear from the latter group because they think it's a big problem, and the rest really don't see anything wrong.
Same reason that I don't vote. I think a lot of people fall into this category of thinking.