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Intellectual Property
7

Intellectual Property

Intellectual Property

(OP)
Hello. I recently left a company where I was doing machine design work for a piece of equipment that would give the company a competitive advantage in their market. I did sign a confidentiality agreement also.

I believe I could make several improvements to the machine that would make it safer and easier to use. If I did this would there be any liability to selling the design to another company? I would first take it to the company I worked for and explain that it is faster, better quality, safer etc. and give them the opportunity to buy the design. If they say no, and I bring it elsewhere would it be illegal?

RE: Intellectual Property

3
The questions that you need to ask are:

Would doing this violate the confidentiality agreement or other agreements you signed?

Would the company that you left think that you violated the agreements?

Would the company that you left sue you for the actual or perceived violation?

Can you afford to defend yourself in court if you are sued? More so if you lose.

Do you have in place, and are you willing to maintain appropriate liability insurance for the lifetime of all equipment that might incorporate your design?

Do I really want to rely on legal advice from random engineers on the internet, or do I want to consult a lawyer?

RE: Intellectual Property

There is an interesting discussion in the IT world about who owns the IP of work an engineer does outside of work hours. There are some who claim that the work an engineer does off hours is owned by their employer if they start with company IP an an input and use company resources in the development. What's legal is hard to say. I don't think you will even get a good read on this if you speak to a lawyer because it depends on factors such as how much you changed the design, that your agreement doesn't fully address this situation etc. Lawyers are conservative and will probably advise that you should not get out of bed in the morning because it will create a liability.

In reality its not a legal question, but a question of fairness and power. If you feel as though your employer is failing, you will be doing the world a favor by making sure this technology is not lost. If they are on the verge of bankruptcy, they will not have the resources to sue you. Alternatively, it could work if you take this invention to a customer who does not compete with your employer. For example, if your employer is targeting big automotive customers and you find a niche in the industrial vacuum market, I could see them not bothering to pursue you. If on the other hand your employer is strong and your actions cost them money, you are toast. If your employer is Apple and you even speak of an internal invention to outsiders, they will crucify you.

RE: Intellectual Property

Going back to your original company is there a chance they can take just your description and run with it without paying you anything? Maybe they can even make an argument that you really came up with this as part of your duties with them and they own the IP already.

That said, we have a former employer that we consult with now and again and a lot of what he comes up with falls into this category.

He has also at times worked for competitors.

Depending who you ask etc. there is a bit of bad blood but every now and then he comes back into the picture.

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RE: Intellectual Property

Quote (glass99)

In reality its not a legal question, but a question of fairness and power. If you feel as though your employer is failing, you will be doing the world a favor by making sure this technology is not lost. If they are on the verge of bankruptcy, they will not have the resources to sue you.

Interesting to have power come up in the ethics forum. I would submit that the ethical answer should have very little to do with power. And where do the creditors of this failing company come in? Don't they have an interest in the IP? If the bankruptcy trustee sees a payoff, he can generally find the resources he needs to sue. Sometimes lawyers will take a case on contingency.

RE: Intellectual Property

stevenal: Most of the time I would agree that the person who paid for the development of the IP has a moral right to do what they want with it. Obviously in a bankruptcy a creditor would have moral right to whatever assets existed. Where the ethics become interesting is where you have a big idea which the inventor is not using to its fullest extent. If I am a greedy and conceited patent troll holding the patent on penicillin and I use my legal protection to refuse access to the billions of people with bacterial infections globally, it would be ethical if someone circumvented my patent.

Legal questions revolve around idiotic details of what can be realistically proven in court. Crunchie will of course want to to see themselves as honest. I could see crunchie letting factors other than purely who funded the development of the IP factor into the moral decision. For example, if I worked 80 hour weeks developing this technology and my old boss effectively stole from me by firing me on Christmas day right before the large promised performance bonus was due, I might not feel so bad about taking some IP with me.

RE: Intellectual Property

Quote (glass99)

if I worked 80 hour weeks developing this technology and my old boss effectively stole from me by firing me on Christmas day right before the large promised performance bonus was due, I might not feel so bad about taking some IP with me.

To be fair, that would still be unethical. You took the risk of working those heavy hours with no contract that guaranteed a bonus at the end (or a piece of the IP pie). You took a risk and the risk didn't pay off... but that doesn't entitle you to steal.

But I feel for your decision. Well, maybe up until I'm chosen for jury duty on your case... then I have to go with the law.

Dan - Owner
http://www.Hi-TecDesigns.com

RE: Intellectual Property

MacGyver: Ok, two wrongs don't make a right, but they kind of do if my boss lied to me about paying a $100k bonus and I steal $100k of his IP. A verbal promise to pay a bonus may or may not be legal to break, but its not ethical. As noted before, the law is a whole other animal quite apart from ethics. Has a patent been filed? What exactly are the terms of my confidentiality agreement? How much have I changed the design? Do you have the legal resources to actually pursue this?

Of course, this kind of "bush justice" is a bit rough, but its how business works in the real world.

RE: Intellectual Property

God you are mixing a lot of concepts there glass. First, did you use ANY company resources to develop it? Company phone? Company desk? Lights? Restroom? Software? Computer? Printer? Time you were being paid? If so you are going to find that the company owns it. If they suggested that you would get a bonus for some bit of IP that didn't come through, you are unlikely to ever prevail on taking the IP as compensation. You took the risk to work the extra hours on the project without anything in writing. Sometimes risks fail. If you steal the IP because they didn't live up to your perception of their commitments, you personally will go to jail. There is no way you can win that one.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. ùGalileo Galilei, Italian Physicist

RE: Intellectual Property

zdas: If a firm promises a bonus but does not pay, how is that ethical? What if they did not pay the bonus because the engineer's work on the IP was complete and felt that not paying the bonus was a good way of goading the engineering into quitting?

If I engineer a machine for my company using their resources creating IP worth $1MM, and they screw me out of a $100k bonus and I then screw them out of $100k of IP, that seems fair to me! They have paid for the office space and phone resources I used out of the $900k I did not steal from them.

I think this kind of thing happens in Silicon Valley startups quite a bit. I work on an algorithm for a website, its awesome but I leave on bad terms, I get a job for a competitor as a contractor and I get paid for my "specialized knowledge". Its difficult for my old boss to prove in a court of law that I have stolen IP from him because I have changed the algorithm significantly whilst working for my new client. My new client is Google, so my old boss has to spend $500k on lawyers to get his $100k of IP back so doesn't bother. I buy a new Ferrari and do not go to jail.

RE: Intellectual Property

Quote (glass99)

if my boss lied to me about paying a $100k bonus and I steal $100k of his IP. A verbal promise to pay a bonus may or may not be legal to break, but its not ethical.
You can't fight unethical behavior with more of the same. If your boss lied, that was unethical of him... but to respond with equally unethical behavior says more about you than your boss.

Quote (glass9)

I think this kind of thing happens in Silicon Valley startups quite a bit. I work on an algorithm for a website, its awesome but I leave on bad terms, I get a job for a competitor as a contractor and I get paid for my "specialized knowledge". Its difficult for my old boss to prove in a court of law that I have stolen IP from him because I have changed the algorithm significantly whilst working for my new client. My new client is Google, so my old boss has to spend $500k on lawyers to get his $100k of IP back so doesn't bother. I buy a new Ferrari and do not go to jail.
Again, it may happen, but it doesn't make it right. When you start thinking such behavior is justified, you're no different than the original perpetrator. Just because the risk for unethical behavior pays off...

Dan - Owner
http://www.Hi-TecDesigns.com

RE: Intellectual Property

"Where the ethics become interesting is where you have a big idea which the inventor is not using to its fullest extent"

Doesn't the OWNER of the idea have a right to decide what to do with it?

RE: Intellectual Property

Macgyver: If one party behaves unethically, the age old solution is that they should be punished and that they should be made to pay restitution to the damaged party. If I steal your car, I should have to give it back and spend a night in jail. When you live in a world where policing does not really exist such as the world of IP, you kind of have to take matters into your own hands. People are much more likely to behave ethically if there are consequences to being unethical.

TenPenny: Only in relatively extreme circumstances does the IP owner not have the moral right to what they please with it, but the moral right is not absolute. An example of ethical abuse of IP are patent trolls. Buying up obscure patents and using them to shake down small businesses is not ethical.

RE: Intellectual Property

Stating an intent to commit a crime on a public internet forum rarely works out well.

Perhaps you haven't been paying attention to the news recently, but an anonymous handle is exactly zero assurance of actual anonymity.

RE: Intellectual Property

Back to the OP's question: How much do you have to change something to get around a patent or to not violate a confidentiality agreement? Is adding a safety feature enough? I suspect not.

MintJulep: We are talking in the abstract about the limits of legal and ethical conduct for the purpose of avoiding committing a crime.

RE: Intellectual Property

"Doesn't the OWNER of the idea have a right to decide what to do with it?"

If you are doing work for hire, then any idea you come up with is ostensibly the property of the person that hired you; that's pretty standard contract law.

As for patentability, see: http://www.uspto.gov/patents/resources/general_inf... and http://www.uspto.gov/patents/resources/general_inf...

Of course, a poorly written patent application is a bad thing. The level of "improvement" on prior art is somewhat subjective, so you'd need to present a strong case that your invention is a solid "improvement" and that it's non-obvious.

TTFN
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RE: Intellectual Property

Crunchie, unless you had a contract with your employer giving you rights to any IP you develop while working for them (that would be most unusual but does happen sometimes!), your only ethical "market" for these ideas is your former employer, since your innovation CLEARLY derives directly from THEIR work which they paid you to contribute to- work that was done for them in what sounds like the recent past. They may feel that they own whatever you have come up with, but since it resides currently only in YOUR head, and you no longer work there, the only way they're going to get that stuff out of your head and into theirs is by paying you for it- they cannot legally or ethically compel you to reveal it to them. There is nothing unethical in asking them for money for it, now that you've left their employ, nor is there anything unethical with you letting it rot in your own head if you don't like them much. It IS unethical to attempt to market this kind of innovation either directly or to a competitor, even after giving them first right of refusal, and it is also very likely impractical legally for you to profit from it regardless of the ethics.

Does that situation persist forever, or at least for the entire 20 year life of a patent? If I suddenly have a fresh thought about the business I was in for a former employer 5 or 10 years ago, and come up with something new that builds on work I did when I was there, who owns it? That's a more interesting question, both from a legal and an ethical perspective. Clearly your employer doesn't own your mind, nor can they possibly own your life's worth of thinking about a particular subject. But where and when does that relationship end? I honestly have no idea! But it's clear that there MUST be some kind of limitation on this, in both directions.

RE: Intellectual Property

A typical non-compete term is on the order of 1 to 2 years. So if you are free to compete after two years, anything you come up with at that time MIGHT be fair game. However, non-disclosure agreements may have a longer term, so if you used their intellectual property to develop your own IP, then they may have a case.

We once went through a rather silly, in hindsight, experience where our company developed a product that was "commercial," yet, it clearly had at least dual use capabilities. We got slapped with a security violation, and in retrospect, it was pretty obvious that it would have been impossible to develop the product without using classified information, so how could the end product be unclassified?

So, if your IP is clearly dependent on IP or trade secrets from your previous company, it would most likely be unethical to market the your IP without giving them both the right of refusal, and without getting approval to use their IP, regardless of the term of any non-competes, unless the company specifically releases that IP into the public domain.

TTFN
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RE: Intellectual Property

My understanding of the way patents work is that you can't just bolt something onto the side of a patented machine and call it new, you have to change something fundamental about the way it performs. It does not have to necessarily be a big change though. Patents are in some ways easier to get around than confidentiality agreements where your responsibility is to not reveal valuable information in a more general way.

I signed a confidentiality agreement with a client a while back that says I am not allowed to use the know-how derived from the IP rights of my client to create, develop, or enable others to develop products or services similar to that of my client. It is quite a broad restriction, and I suspect it is typical of confidentiality agreements. In my case I feel ethically bound to not go and sell my services to my client's competitors because I went into the agreement on the understanding that they really did value their IP. The language does seem pretty air tight, but I'm sure a sharp legal mind could find loopholes.

Another related legal issue for we consultants is copyright. In the construction world and I suspect beyond, your drawings are your "instruments of service" which you hold copyright on and you grant your client an exclusive license for the use. This is quite different legally from your client owning the IP, particularly with respect to liability.

RE: Intellectual Property

Can you start from scratch right now, using only publicly available information, and develop the same concept? If you do, and document that process, then I imagine you'd be fine* after any non-compete dust settles.

*If you hadn't already posted about it, that is. Being vague might get you in the safe zone legally, but there is still the appearance of an ethical problem.


Glass, you shouldn't "feel" ethically bound, you either are or aren't. You can feel morally obligated, which is different. If you steal my car and get away with it, can I steal yours later? Ethically of course not, morally it's not so clear. I wouldn't lose any sleep over it, so it's clearer than I am suggesting, but I won't come right out and say that it's acceptable.

RE: Intellectual Property

"Can you start from scratch right now, using only publicly available information, and develop the same concept? If you do, and document that process, then I imagine you'd be fine* after any non-compete dust settles."

Seems to me that this would be hard to conclusively prove in court, since you already have the confidential information and the work experience and can't reset your brain, so how clean is it really? Given that the burden of proof in civil court is lower than in criminal court, the fact that you have confidential IP already in your possession makes it unlikely that anyone would not think that your usage and documentation of public information is just a smokescreen to obfuscate the fact that you already had confidential information. If you didn't have the confidential information, could you possibly conclude that the public information was even correct at all? And had you not worked there, why you would you even be interested in an improvement on the company's product? The only plausibly deniable situation is if you have a long history of independent inventions that are similar in nature and that there is some natural connection between previous inventions and the new one.

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RE: Intellectual Property

IRstuff + 1gibson: Could you argue that you arrived at the same result because you started with the same input parameters and the result of your rational engineering process using publicly available analysis techniques and data led you to the same design? You did not reuse analysis from a previous client or reuse test data, you merely started from scratch. Crunchie's old client can not own the fact that 1 + 1 = 2.

This is similar to the dispute between Apple and Samsung which was decided last year. Apple tried to argue that their rounded corners of the iPhone were their proprietary technology, and Samsung argued they are just a rational engineering response to a technical constraint.

RE: Intellectual Property

Glass, exactly.

The skill set required to interpret the public domain information and transform it into a valuable design, your skill set, is not owned by a previous employer. Even if a non-compete is in place, they still don't own your skill set, they just have the right to prevent you from using it temporarily.

If the documentation is completely supported with citations from public resources, then what IP was used? That's what I'm getting at. If you go that route and are missing one piece of the puzzle that you memorized as an employee but can't find publicly available, then you're sunk.

If you walked out on your last day with a 100% completed design (whether in physical, digital, or memorized format) that you never shared with anyone, and you deleted all traces of it from your workplace so the company would not have the information, then that is a different story and obviously not ethical, or legal.

If that's the case, I suppose you could go straight to a lawyer and ask if they can help you get away with it, but that's not a question to be asked here.

RE: Intellectual Property

"Could you argue that you arrived at the same result because you started with the same input parameters and the result of your rational engineering process using publicly available analysis techniques and data led you to the same design? You did not reuse analysis from a previous client or reuse test data, you merely started from scratch. Crunchie's old client can not own the fact that 1 + 1 = 2."

You could attempt such an argument, but in most cases of this type, the knowledge and skill required is rather esoteric, and you would need to convince a judge that you didn't simple reformulate your previous analyses with a new one that just jiggles a few values around. It's been my experience, albeit limited, that even when 6 people collaborate to cheat on a design, they will attempt to make the designs different, but not realize that there are critical design points that are inherently unique in truly unique and separate designs beyond superficial tweaks. To wit, say your employer has a copy of your original calculations; your attempt at obfuscating your new calculations will likely fail, because the inherent flow and thinking process that's unique to you will wind up reflected in the calculations, particularly errors in thinking.

As an example, we built a chip at a previous company, but the original designers left the company and started a new one to compete with us. They designed an identically functional chip in a different technology, and claimed that they didn't take any IP with them. Yet, when first silicon was fabbed, it turned out that there was an error that was identical to an error we fixed on the original chip AFTER they had already left the company. Had they truly started with a blank sheet with no intimate knowledge of the original chip, they most likely would not have gotten that output wrong.

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RE: Intellectual Property

Oh, I left off a bit about the 6 guys; their downfall, aside from designs that were about 95% identical, was that they all made the same mistake in grounding one particular circuit.

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RE: Intellectual Property

1gibson: if indeed you are correct, it raises the important distinction between a confidentiality agreement and a non-compete agreement. Crunchie should be free to recreate the design from scratch for another client if only bound by a confidentiality agreement.

RE: Intellectual Property

IRStuff: What happened to the 6 guys? Did your company sue them? Are they still in business?

RE: Intellectual Property

They were actually grad students, in a class that I was the TA, and wound up failing the class. It was pretty silly because it probably would have taken only about a day to come up with a truly unique design.

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RE: Intellectual Property

Did the Intel founders act unethically when they peeled off from Fairchild semiconductor? When the "Traitorous Eight" including Bob Noyce and Gordon Moore (of Moore's law fame) left Fairchild they took a bunch of IP which they had personally developed under William Shockley's supervision related to the mass production of transistors. Would the world be a better place had Intel never existed?

RE: Intellectual Property

"Would the world be a better place had Intel never existed?"

Is someone really comparing themselves to the founders of Intel to justify their own lack of ethics?

Note that the founders of Intel left because Fairchild really wasn't that interested in building MOS devices, given that they were a bipolar powerhouse, and they remained so, well into the CMOS era. Fairchild had a good thing going with op amps and logic chips, and was not interested in building calculator and memory chips, which were the original mainstays of Intel's business. In effect, Fairchild exercised their refusal rights by declining to support MOS development. So, possibly, IP was transferred, but it had been discarded and deprecated by Fairchild.

As late as 1987, Fairchild's main business was still in linear and digital bipolar, not MOS. They had only just started to produce 7400 series CMOS devices, and while they did have an MOS microprocessor unit, it was quite weak and basically unsupported by the corporation and an unsupportable endeavor. They attempted to jump-start their microprocessor business by leap-frogging to a 32-bit RISC processor, but by that time, Motorola and Intel were completely dominating the microprocessor market. Fairchild also attempted to second source National's 16032 processor line, but that also proved to be unsupportable, given that National was not doing particularly well selling their own product. Oh, Fairchild was moderately successful in the CCD and memory arena in the late 70s and early 80s, but TCE groundwater contamination and a fatal design bug in the 64k DRAM sealed the San Jose memory division's fate. Fairchild's CMOS imaging products division is still surviving, primarily selling to scientific applications. As another proof of Fairchild's previous lack of interest in MOS and CMOS, one of the former presidents of Fairchild founded LSI logic, which was a premier CMOS gate array house for quite a while.

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RE: Intellectual Property

Some stuff here seems pretty bent to me. Even if just "imagined". Why spread the "Poor me I was treated so badly, but now I'll hit back" mentality at all.
However, lots of the other posts which give knowledge about one's rights are superb, there should be like a manual made out of that to be handed out to all those in need..
Noncompete clauses are part of the pay, in my understanding. But must be carefully worded in the first place, as to what specific IP is protected. Never ever sign "broad" noncompete clauses, in todays world. Whoever tries to do this to you does not want you any good, neither now nor later.
Regards
R.

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