×
INTELLIGENT WORK FORUMS
FOR ENGINEERING PROFESSIONALS

Log In

Come Join Us!

Are you an
Engineering professional?
Join Eng-Tips Forums!
  • Talk With Other Members
  • Be Notified Of Responses
    To Your Posts
  • Keyword Search
  • One-Click Access To Your
    Favorite Forums
  • Automated Signatures
    On Your Posts
  • Best Of All, It's Free!
  • Students Click Here

*Eng-Tips's functionality depends on members receiving e-mail. By joining you are opting in to receive e-mail.

Posting Guidelines

Promoting, selling, recruiting, coursework and thesis posting is forbidden.

Students Click Here

Jobs

Can you sell a component you designed for your company separately to a non-competing market?
3

Can you sell a component you designed for your company separately to a non-competing market?

Can you sell a component you designed for your company separately to a non-competing market?

(OP)
While designing a products for your company, there are many smaller sub-assemblies and components that get integrated into the final product. After the product design is completed, many of those components are used solely in the final product. Can I re-package the concept I designed and sell it separately?

Here's a completely made-up example but hopefully it conveys the basic idea:

You work for a freezer manufacturer and are tasked to design a lock that can be attached to the outside of the freezer to prevent someone form opening it.
Now, all of the company's freezers include this lock. They have no plans to sell the lock as a separate item to consumers.
I would like to take the lock assembly, repackage it, and sell it myself. It can be sold to people who have any brand of freezer. It can also be sold to people to lock their sheds, tool boxes, desks, cabinets or anything similar.

Similar example:
You work for a company that makes hair dryers. You design a heating element for them that is more reliable, more efficient, and cheaper than anything that has been used before.
Can I take that heating element I designed and make my own new heat gun and sell it to the electronics industry?

Is it acceptable for me to take a product I designed for my company, modify it, and then market it on my own?

Suppose I don't work for the company. Suppose I am a consumer that bought one of the freezers/hair dryers and really liked how they worked. Can I take that design, make it myself, and try to sell it to whoever I can? Is it any different?

Thoughts?

RE: Can you sell a component you designed for your company separately to a non-competing market?

Only if your employer totally bungled your employment agreement. Otherwise, no.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Do you have a lawyer permanently signed to work pro bono for you?

Mike McCann
MMC Engineering
http://mmcengineering.tripod.com

RE: Can you sell a component you designed for your company separately to a non-competing market?

I'm no expert, but seems most employers have some part of their employment agreements or policies that state all original work is the intellectual property of the company and not you. In that case, no you couldn't do it. If you bought a hair dryer and tried to reverse engineer, well, I guess that can't stop that unless they have a patent.

RE: Can you sell a component you designed for your company separately to a non-competing market?

(OP)
I need to read thru it again in greater detail, but:

Nothing about the product is patented (or patentable) so there aren't any infringement issues.
If it was patentable, than sure all of the IP would belong to the company. But there isn't anything there.

I am not taking business away from the company. They will still sell the same number of products, so it isn't affecting the performance of the company.

The obvious answer is to ask the company for their permission. If they are ok with it up front, then it definitely wont be an issue later. But if they find out about it after the fact it would surely be a different discussion.

RE: Can you sell a component you designed for your company separately to a non-competing market?

3
Underinformed rationalization is a vital step on the road to litigation.

RE: Can you sell a component you designed for your company separately to a non-competing market?

(OP)
Thanks. Isn't that why we ask Legal questions on an Engineering Forum.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Call your lawyer. My guess - NO unless you have written permission from your employer....

RE: Can you sell a component you designed for your company separately to a non-competing market?

You need to get permission; otherwise, you lay yourself open to a suit from your employer. At the minimum, they would sue for theft of intellectual property; even though they may not ever enter into a different market, it's their decision to make.

TTFN
FAQ731-376: Eng-Tips.com Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

"Isn't that why we ask Legal questions on an Engineering Forum. "

Some folks occasionally propose that it might be better to ask Legal questions on a Legal website. Or do you go to legal websites for engineering questions?

Definitely take a look at what your employment contract (or equivalent) says.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Can you sell a component you designed for your company separately to a non-competing market?

I was just awarded a patent for a concept that I developed while consulting for a company. They paid my hourly rate while I ran down all the theoretical blind alleys and dead ends that come with original research. They provided the software I used in the analysis. They paid for the equipment and manpower I used for the bench test. When it came time to file the patent I had to check the box assigning the patent to the company that took all the financial risks. My name is on the patent, but the company owns all rights to use, sell, or license the technology.

That relationship is very common. If someone is paying for your time and providing the logistical support required to make the idea real, then they absolutely own the result unless you have a VERY explicit contract to the contrary. No gray area here. That lock or that heating element are not yours to sell unless you have a very odd contract with your employer. As to reverse engineering a consumer product, it happens all the time and sometimes the reverser gets sued (and loses) most times he doesn't. It still fails the sniff test.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Your employer is not only going to be concerned about competition and intellectual property, but also about you moonlighting and having conflicts of interest. If you get their permission, then no problem. But why would they agree to worries with no benefit.

If there is no patent and the device can be reverse engineered then anybody in the world can do what you suggest, including you. But your employer doesn't have to keep paying you if they don't like it.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Take your employment agreement to an attorney who specializes in intellectual property and get his opinion. You might take it to a couple of them just to be certain. If I use the last employment agreement I signed, I see a slight opening in the wording that may be interpreted in my favor if in a similar situation. My agreement says,

"Employee agrees to promptly disclose and assign to Employer all rights to ideas, improvements, inventions, know-how and data, whether or not patentable or registrable under copyright or similar statutes , that Employee makes, conceives, reduces to practice or learns during Employee's employment and within the scope of Employees employment and are related to or useful in the business of Employer, or result directly or indirectly from tasks assigned to Employee by Employer, or are funded by Employer or result from use of the premises or property owned or leased by the Employer. Such disclosure and assignment obligation shall continue for a period of one year after termination of Employee's employment...."

So according to that, the way I interpret it, I could be terminated or quit, wait a year, then market the item.

If you are offended by the things I say, imagine the stuff I hold back.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Another interpretation is that you simply waited out the clause period, so if I were the company, I'd sue if there was any hint that you might have developed the idea during your employment, particularly if it's applicable to my product in any way.

TTFN
FAQ731-376: Eng-Tips.com Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

I would interpret that Such disclosure and assignment obligation shall continue for a period of one year after termination of Employee's employment...." statement as laying claim to anything designed by you, based on the knowledge gained while in their employ, within a year of leaving their employ.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Pat, they can't do that in California. There is a provision, Section 2870 of the Labor Code, that excludes inventions, etc. developed by someone on their own time not using company equipment. This is applicable while employed and certainly while not employed for the company. Presumably after quitting or being terminated, you are not using their equipment, but even so, you are not in their employ, and free to market your invention. You have to take the one year statement within the context of what preceded it. The company is laying claim to inventions you developed while in their employ, using their equipment, etc. for one year after leaving. Marketing something that the Employer is still selling or using would probably fall under a non-compete agreement.

In the OP's case, he intends to market a device for an alternate use not currently marketed by his Employer and therefor not subject to my non-compete agreement. I don't know what his employment agreement says. Altering or modifying the device might save him from a legal challenge from his Employer, but the cost to win may prove prohibitive. It really comes down to what his employment agreement says, where he lives, and what he thinks his employer will do about it if they find out.





If you are offended by the things I say, imagine the stuff I hold back.

RE: Can you sell a component you designed for your company separately to a non-competing market?

I don't think it matters what his employment contract says. He obviously learned about it through his employment there, he must treat the information that he knows as proprietary information; it's just common sense. No contract is required; the company can argue that it was a company trade secret.

As for Cass's example, unless the development can be demonstrated to have nothing whatsoever to do with your previous employer's product line, it's suspect, e.g., you work for this refrigerator company developing this lock, quit, and 366 days later, you start to market a lock for medicine cabinets that looks suspiciously like the lock on the refrigerators. That just won't pass the duck test. If, at day 366, you market a laser, using a new type of refrigeration system, that won't pass the duck test. If you market a laser diode, then you've got a leg to stand on.

TTFN
FAQ731-376: Eng-Tips.com Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

Sure you can do it. It's probably easy. You will just get fired for it and likely sued unless you have an unusually liberal contract.

You might have a chance of getting your employer to agree in writing IF you offer him a royalty for use of his IP.

Regards
Pat
See FAQ731-376: Eng-Tips.com Forum Policies for tips on use of eng-tips by professional engineers &
http://eng-tips.com/market.cfm
for site rules

RE: Can you sell a component you designed for your company separately to a non-competing market?

In most cases, something you design while working for a company belongs to that company. You would need their permission to market a design based on the design you did for the company. In the case of consultants, it depends on the agreement between the consultant and the company, but in most cases the IP is assigned to the company.

I do know of one instance where the designer kept the idea. It was my mother-in-law's cousin, so I know some of the details. I also worked for one of the companies involved for a while. Max designed a new generation potato harvester, did the drawings and sold the design to a local company in Idaho that was already building their own harvesters. The company starts production and Max packs up his drawings and heads off to Nebraska to another compnay and sells them the same design. Both companies are then producing similar designs of potato harvesters. Each company had the right to make modifications as they had only purchased the base design. To toss another twist in the story, my 2 cousins, who are brothers, each have farms in Idaho growing potatoes. One likes the Nebraska company's product and the other uses the Idaho comapny's product. They also disagreed on tractors as one liked International Harvestor and the other John Deere.

"Wildfires are dangerous, hard to control, and economically catastrophic."

Ben Loosli

RE: Can you sell a component you designed for your company separately to a non-competing market?

"sold the design to a local company"

Was he working for that company? Was it a non-exclusive sale?

TTFN
FAQ731-376: Eng-Tips.com Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

Well, this is an ethics forum and not a legal one.

Go get a lawyer for a legal opinion. Here's my ethical opinion:

Forgetting the legal issue for now, suppose that:

1. I work for you.
2. You assign me a product to design.
3. You pay me money, per hour or per whatever to work for you.
4. I take the work that you paid me to produce for you and go make personal money by producing and selling it on my own.
5. I didn't ask you first, still haven't told you about it, and you haven't found out yet.

Man, I would NOT be able to look at myself in the mirror after that without thinking, "Lousy thief." It doesn't matter that I'm selling it into an unrelated market. I stole the idea and the original design, not the sales.

That's my personal ethic at work. Yours may differ.

Best to you,

Goober Dave

Haven't see the forum policies? Do so now: Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

(OP)
Thanks for all the responses. It is apparent the overwhelming response is that it isn't a good idea. Only way would be to get direct permission from the company beforehand.

Goober Dave's remarks do lead to a different question regarding the experience and information you learn while on the job:

I work for a company for 10 years designing different products. On their money I have hopefully learned a great deal about design, materials, techniques, ...
Now, I leave the company and start working at a new job. All of that knowledge is going to go with me correct?

Suppose I work for a company that designs consumer electronics. I come up with a design that prevents the electronics from getting ruined if too much voltage is applied.
I leave my job and start working for a toy company. Can I use what I have learned at my previous job to apply this same technique to the toys I am designing?

So, from Goober Dave's post:
1. I work for you.
2. You assign me a product to design.
3. You pay me money, per hour or per whatever to work for you.
4. I take the work that you paid me to produce for you and go make personal money by producing and selling it on my own use that knowledge while designing a product for my next employer.
5. I didn't ask you first, still haven't told you about it, and you haven't found out yet.

Is this now acceptable? Or do I have to completely forget everything I have learned while working for the first company when I leave?

RE: Can you sell a component you designed for your company separately to a non-competing market?

Yes - we ALL use the previous info we learned at earlier jobs. That is part of the learning and growing process. But to flatly copy something - not so good....

RE: Can you sell a component you designed for your company separately to a non-competing market?

"Now, I leave the company and start working at a new job. All of that knowledge is going to go with me correct?"

Up to a point. What is considered to be company proprietary or trade secrets must remain with the old company. There have been suits filed where the likes of Google, Yahoo, etc., poached each other's employees, and were promptly sued for improper acquisition of trade secrets of the old company. Again, if it passes the duck test, then it's most likely OK.

In your example, to "use that knowledge" is where you can, and will, get into trouble, particularly, as in my crude example, your former company finds a lock on a medicine cabinet that looks suspiciously like the lock you designed for them for their refrigerator, questions will be raised.

TTFN
FAQ731-376: Eng-Tips.com Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

IR brings up some good points. My post was for "general" info learned on the job - not proprietary info which is "owned" by the old comapy/

RE: Can you sell a component you designed for your company separately to a non-competing market?

It does get complicated, doesn't it?

I suppose that if you tell your company the idea, the response will be all over the map.
  • We're not interested in that market, feel free to tackle it yourself on personal time. Good luck, hope you make a mint!
  • Wow, what an idea! Take it to marketing and tell them to get busy. [compensation: hearty handclasp and slap-on-the-back]
  • Wow, nice thinking. Take it to marekting and tell them to get busy. [compensation: massive bonus and lion's share of the gross profits]

Best to you,

Goober Dave

Haven't see the forum policies? Do so now: Forum Policies

RE: Can you sell a component you designed for your company separately to a non-competing market?

Max did not work for either company that I am aware of and obviously he sold them each a non-exclusive copy of his design. Max was a farmer and wanted a better potato harvester than he could currently buy. His design was a step forward for the time, early 1970's.

"Wildfires are dangerous, hard to control, and economically catastrophic."

Ben Loosli

RE: Can you sell a component you designed for your company separately to a non-competing market?

You need a lawyer to navigate these waters for you. Non-compete and non-disclousre agreements are common. Some even try to extend to things you invent on your own time while employed with the company or for a period of time after you leave. How enforcable these things really are is up to the courts to decide. If you were to take something you designed and modified it enough and sold it in a different market you might have a legal leg to stand on.

As far as your example of not working for the company, it depends. If the refrigerator lock was not patented I beleive you could copy it and do whatever you wanted. Even if there is a patent, if you are using it for a new application and make enough changes to the design to not infirnge on the intellectual property you can do it. How easily it can be done really depends on how well the original patent was written and how it is worded. You would really need the services of a patent attorney for this. It can be done because I have such a patent.

Bottom line though, is that if I ever come up with that million dollar idea, whether it is related to my job or not, I'm going to keep it to myself until I quit my job and any agreements I signed with my employer expire.

RE: Can you sell a component you designed for your company separately to a non-competing market?

Granted you would have to go out on your own, but getting permission to sell a component of a product to a different market may not be as crazy as it sounds. Maybe managment doesn't want to put the effort and risk into trying to penetrate into a new market. It's not as easy to do as it sounds, and even if you have the better mousetrap, I have seen it done before. In one case the former employee bought the equipment from the former employer, modified it for his business and turned around and sold it in a different market. In another case the former employer and the former employee who went out on his own have a non-compete agreement between them so that they can't work in each others market.

Red Flag This Post

Please let us know here why this post is inappropriate. Reasons such as off-topic, duplicates, flames, illegal, vulgar, or students posting their homework.

Red Flag Submitted

Thank you for helping keep Eng-Tips Forums free from inappropriate posts.
The Eng-Tips staff will check this out and take appropriate action.

Reply To This Thread

Posting in the Eng-Tips forums is a member-only feature.

Click Here to join Eng-Tips and talk with other members!


Resources