Legal Question 4

[nag9127]

If there is another forum where this would be more appropriately posted please let me know.

I am working as an independent contractor under an annually renewing services contract. I do all the IT work for this company which involves machine configuration, network configuration and security, software implementation and modification, report modification, data analysis, etc. There are several companies here... retail food, retail book, cafe, world wide mail order catalog business, and a product manufacturing department. I have developed an application for the manufacturing element of the business. This was done because I saw a customized application geared to the exact needs of the operation being more functionally acceptable and user friendly than a canned product which might be inexpensive but lacking in some areas or overpriced and only being used to a small percentage of its capabiliites. I am very independent in my job responsibilities (don't really have a hands on supervisor) and while management knew what I was doing, it wasn't done at someone's specific request. All this work was done while on company time and I have been paid accordingly. As it turns out, the application is being used very effectively by the manufacturing lab, and as it turns out, the program is the basis for what could become a very marketable software application. My question is this. There is no language in my services contract which deals with this situation. I just want to know whether I have the right to further develop and market this software on my own and retain all revenue with no legal obligation to my contracted employer pertaining to software ownership (they were paying me while I developed it for their use, at least to this point)? Thanks for any info!

 

[bluedragon2]

In my position, I do not own what I develop since I had to sign a proprietary development contract. If you have no contract then I would think you would be fine. I would make sure that anything you signed (handbook, ethics paperwork, etc) does not contain wording that would prohibit it.



[Blue]Blue[/Blue] [Dragon]

If I wasn't Blue, I would just be a Dragon...

 

[cajuntank]

I concurr, because your a contractor and as long as your contract doesn't state or define anything you do or develope on company time as "owned" technology of that company, then your golden.

It would be no different as a building contractor developing a better way to build something while doing a contract job. The building owner would not have rights to that new building process just because the contractor came up with it while he/she was doing the job.

Again, this is assumming you didn't relinquish those rights to the employer through a contract stating so.

Go forth and market your wares.

 

[damber]

If it's not stated in your contract that they have IP rights to what you develop under contract with them, then legally you are probably ok.. but read the fine print and any referenced documents.

So... this isn't a legal question, really. It's more of an ethical question.. more so it is a question about how to prevent any fallout from your decision.

If you were to sell your app to say 10 companies in the next year at $500 each, that's $5k. Nice little extra for no further work. But what if your current employer doesn't like you selling 'their' software to their competitors ? They may not legally have rights to stop you doing so... but they could end your contract... so will your new income cover what your current income does ?

So, cover your ass with the legal aspect, but dont forget the people aspect too, and ensure that this wont sour your current relationship with your current employer.

A smile is worth a thousand kind words. So smile, it's easy!

 

[Knackster]

One thing to look at is that if the companies that could benefit from your code are in the same industry, you might have an issue if you have a non-compete clause in your contract.

Chris
IT Manager
Houston, Texas

 

[nag9127]

Thanks to everyone for all the insight in the responses to my original post. You have provided several different angles, legal and otherwise, for me to consider.

 

[airbourne]

Couple of things to note:

Does your software reveal trade secrets of that manufacturing element? In some situations while they don't own the source code if you have not given it to them, the software and the interactive process could be determined to reveal a specific trade secret, which could prevent you from marketing your software to a competitor.

Also, if there is no agreement between you and the company as to the "use" of the software, they may have as much claim as you to be able to repackage this software and sell it, or even hire a company or person to further develop this software, independent of you.

Although it might be a simple case of who gets to the patent office first...

 

[juice1zm3]

YOUMUST DO THIS!!! They are already making money from your idea!!! First, a patent pending (applied for and waiting for approval), consists of the patenting agent or attorney first doing a “patent search” to see if your invention of the same concept or design have already had patents applied for them.

Also, keep in mind that once you have a patent pending, this can be noted in print on your product-invention’s packaging (like a sticker on the bottom) and protects you while the patenting process is being completed.

Even if for some reason a patent is later denied, this is not usually determined for many months and gives an YOU a protected jump on any competition that might try to crop up in the mean time.

Second, some companies and also retail outlets, who look at new products for consideration to market them actually require that they have a patent pending status or they will not even look at them them!

These are some of the major reasons why getting a patent pending is so SUPER important but applying for a patent also tells companies you may submit your invention too, that you have full commitment and belief in your invention.

The way some of these companies may look at this is that if you don’t have enough belief in your invention to apply for a patent, why should they? DOCUMENT EVERYTHING! ebery conversation who you have talked to about this product the date the time EVERYTING, all the hand scribbled notews EVERYTHING! Any minor adjustments you've made everything!!! I love new inventions! YOU GO!

 

[juice1zm3]

Forgot to mentio I'm a Law Major LOL!

 

[maczen]

nag,
Juice has the right idea.. When you are in need of legal advice then seek a professional. You should consult with an attorney. In fact, you should consult with an attorney that specializes in technology and/or a patent attorney. This would be my recommendation. I do not know of anyone off of the top of my head but you can check the back of a 2600 magazine and find several offering their services as a tech specializing lawyer.. Good Luck! By the way, consults are usually free...

B Haines
CCNA R&S, ETA FOI

 

[KornGeek]

One thing to look at is that if the companies that could benefit from your code are in the same industry, you might have an issue if you have a non-compete clause in your contract.

I heard this weekend (and keep in mind that actual facts may be distorted as I have not actually seen a news article on this yet) that non-compete clauses were struck down as unenforceable. I'm not sure if this is only in California or a Federal ruling, but it's worth noting (if the information I received is correct).

 

[airbourne]

Any non-compete clause or contract can be determined to be unenforceable if it violates the law or if the terms in the contract are such as to be too broad or too vague. The rulings are also not always based on precedent and may vary by court.

An example, my previous company had a non-compete clause that said, something to the effect of:

"...cannot work for any client past, present or future..."

Seriously, it said: past, present or future.

I laughed so hard when I read that. Since my previous company was in the services business that meant that for 1 year, I couldn't work - ANYWHERE. Yeah right!

As far as a sweeping ruling for ALL non-compete clauses, I'm a little curious about that, though skeptical.

 

[jmbcreative]

Just as a side note to the advice already posted, you may want to look into the company's computing policy. If you signed a computing policy when you gained access to the companies computing resources, chances are there is a clause that states that the data contained and produced on the company's computing resources is the sole property of the company.

Professional advice is definitely the best route to take here. Best of luck.