This paper studies the strategic interplay between innovation, incentives, expropriation threat and disputes arising from expropriation from an intra-organization perspective. We present a simple principal-agent model with hidden actions and hidden information in which two employees can choose how much (innovative) effort to exert, whether to expropriate and whether to dispute if innovation is expropriated. The organization maximizes its expected payoff by choosing the optimal payments for both employees as well as deciding whether to encourage or discourage disputes. We analyze three different mechanisms; a contestable, a non-contestable and a team mechanism, characterize optimal innovation payments and rank the mechanisms in terms of ex-ante payoff. Finally, we discuss the feasibility and execution of each mechanism in an organizational setting.