Contractor Stealing My Plans 4

@jhnblgr , CWB1 works in a different field. In construction, yes - the standard is that the Registered Design Professional retains ownership of the copyright. In product design and development, industry standards are different. OP is a structural engineer working in building design, so in this case the norm would be for the OP to have retained the rights to the design, and their client overreached by using the instrument of service (the plans) for more than the single use license that they were granted. This of course assumes the OP had a good contract in place... @bigmig I don't think you've clarified that one - did you have a good contract in place or was it a handshake deal? That's one of the hazards of making "friends" with clients. It's amazing how quickly those friendships evaporate when you don't "come through" or they see a way to save (or make) a few bucks.

CWB1 said:

Its entirely possible that your "friend" believes they own the IP and thus are free to do whatever they wish with it. I'd recommend making the phone call to ask, and seeing if there's an amicable solution that doesnt involve expensive attorneys. IME its usually best to give folks benefit of the doubt and not assume either a mistake or malfeasance.

I've been on both sides as contract-engineer and as customer doing everything from writing the SOW to approving the final product. Many of the stateside contracts I've seen didnt even mention IP ownership bc unless the contract details specific IP to be retained, the customer owns everything including the liability.

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he signed a contract acknowledging ownership of the drawings is mine. He said he 'didn't read it'.

bigmig said:

He said he 'didn't read it'.

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Tough luck for him, then.

I've only seen this happen once "in real life." It was resolved before it got to court. While the engineer in question would have happily charged a reuse fee if the client had come to him, he charged him full price for both extra uses after the fact. It was that or go to court where the client would have had to pay a whole lot more to cover legal fees and whatever damage number the lawyer came up with, to say nothing of whatever fines the board would have levied. The client cut him a check the same day.

phamENG said:

Tough luck for him, then.

I've only seen this happen once "in real life." It was resolved before it got to court. While the engineer in question would have happily charged a reuse fee if the client had come to him, he charged him full price for both extra uses after the fact. It was that or go to court where the client would have had to pay a whole lot more to cover legal fees and whatever damage number the lawyer came up with, to say nothing of whatever fines the board would have levied. The client cut him a check the same day.

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The issue is that by accepting payment, I inherit the job an all risk, which is quite the risk because I didn't inspect anythinng.

The issue is that by accepting payment, I inherit the job an all risk, which is quite the risk because I didn't inspect anythinng.

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I wouldn't accept payment for the jobs. I would accept payment as compensation for damages. Would probably need a lawyer to make sure it is "settled" properly.

gte447f said:

I would accept payment as compensation for damages.

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This.

gte447f said:

need a lawyer to make sure it is "settled" properly.

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Also this.

If the project specs would have changed based on location or use or the project should have had special inspections but somehow didn't, then you need to take steps to inform the building official of that fact.

phamENG said:

This.

Also this.

If the project specs would have changed based on location or use or the project should have had special inspections but somehow didn't, then you need to take steps to inform the building official of that fact.

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there are no damages yet, so it would be a hard case to proceed with. The exposed risk I have been put in, which doesn't have a monetary value until I get sued by the home owner, is the item at hand.

bigmig said:

which doesn't have a monetary value

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I bet your insurer would disagree with you.

gte447f said:

I wouldn't accept payment for the jobs. I would accept payment as compensation for damages. Would probably need a lawyer to make sure it is "settled" properly.

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Including indemnification. The contractor "friend" needs to assume all liability.

I mean ultimately it's up to you if you want to sue him for stealing your plans (as he plainly did). You seem very hesitant/reluctant to sue, probably because courts and lawyers are a nightmare, so if you've resolved it to your satisfaction and don't want any money that's your prerogative, but you absolutely have a solid case.

"I didn't read the contract" is a ridiculous excuse and a cop out.

In the US the engineer retains ownership unless otherwise noted.

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That's true for those with regular, long-term employment. However, folks contracted/hired/commissioned for a specific project are "hired to invent" and retain no IP rights unless granted by the customer. Our legal system also doesnt recognize IP claims that violate another's rights, and requires specificity for ownership claims. To own IP, the OP needs a signed release detailing specific terms under which any IP/sketches/models/prints the friend/architect provided upfront and IP developed during their contract can be used, not a paragraph or two of vague generality.

Customer could not own the liability since they are not licensed

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Licensing is irrelevant. When the customer is a business the contract engineer has no more liability than a regular employee. So long as they're not grossly negligent or going beyond a normal labor contract the business customer holds the liability. Granted, many one-man CE/SE shops do both by forgoing independent design review, work outside their experience, etc, and trying to claim/lease IP so are walking targets for lawsuits.

This is a civil engineering case and not mechanical which has entirely different legal protections. And operating under industry exemption is typically not allowed.

IP law doesnt consider industry, nor does it care if you're a professional or member of the public. It gives equal protection to homeowners' sketches and engineers' CAD, and with modern technology there often isnt much difference.

Regarding liability, regulators and courts do give members of the public more benefit of the doubt and often go softer in penalizing. Professionals are treated equal amongst ourselves. Licensing, education, position, nor industry increases liability nor does working under the industrial exemption decrease it. The reason we're able to easily work across every industry is bc the rules dont change.

CWB1 said:

IP law doesnt consider industry, nor does it care if you're a professional or member of the public. It gives equal protection to homeowners' sketches and engineers' CAD, and with modern technology there often isnt much difference.

Regarding liability, regulators and courts do give members of the public more benefit of the doubt and often go softer in penalizing. Professionals are treated equal amongst ourselves. Licensing, education, position, nor industry increases liability nor does working under the industrial exemption decrease it. The reason we're able to easily work across every industry is bc the rules dont change.

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Talking about liability and IP is two different items. A AE is liable for all the work bearing their seal. The AE industry, and architects or engineer can only be held accountable for design errors or omissions, the contractor or owner can only be accountable for construction defects or deviation from plans. They are not responsible legally for the design.

the contractor or owner can only be accountable for construction defects or deviation from plans. They are not responsible legally for the design.

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In the US we follow strict liability, whoever sells to the public owns the liability. Those companies can sue subs/suppliers but are generally limited to a refund of the original $$$ spent rather than damages. This forces companies to give due-diligence to hiring quality subs/suppliers rather than simply the cheapest HereToday&GoneTomorrow, and allows customers to sue the company they know rather than somebody in the background that they don't.

If an engineer is hired by a homeowner, who separately hires a contractor then obviously the engineer is liable. OTOH if a contractor contracts an engineer, the engineer typically has no liability and is careful about maintaining that status-quo.

CWB1 said:

In the US we follow strict liability, whoever sells to the public owns the liability. Those companies can sue subs/suppliers but are generally limited to a refund of the original $$$ spent rather than damages. This forces companies to give due-diligence to hiring quality subs/suppliers rather than simply the cheapest HereToday&GoneTomorrow, and allows customers to sue the company they know rather than somebody in the background that they don't.

If an engineer is hired by a homeowner, who separately hires a contractor then obviously the engineer is liable. OTOH if a contractor contracts an engineer, the engineer typically has no liability and is careful about maintaining that status-quo.

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It's hard to follow what point(s) you are trying to make and why, but this is mostly incorrect and has little to nothing to do with the OP's issue with stolen plans.

The OP's concerned about potential liability bc of potentially owning the plans/IP. The quoted post explains why they likely have little liability and earlier posts explained why they likely don't own IP.

There are certainly exceptions but suggesting basic IP and liability concepts are incorrect is absurd. Most engineers cover the basics mentioned in ~20 mins of the annual 4-8 hour legal refresher.

CWB1 said:

The OP's concerned about potential liability bc of potentially owning the plans/IP. The quoted post explains why they likely have little liability and earlier posts explained why they likely don't own IP.

There are certainly exceptions but suggesting basic IP and liability concepts are incorrect is absurd. Most engineers cover the basics mentioned in ~20 mins of the annual 4-8 hour legal refresher.

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Of course the OP owns the IP. This is a basic concept in the AEC industry that the creator owns and retains the rights to their work product including drawings, unless agreed upon otherwise, but you seem to have this all wrong. Is it your contention that nothing was stolen from the OP? That modifying and re-using plans without the engineer's knowledge or consent was OK? How can this be?

As far as liability, the OP was worried that the thief had exposed the OP to unwanted liability by re-using the plans without their knowledge. This is probably true in way, because in the event that anything to do with the buildings were to be unsatisfactory to the end user, the aggrieved party, if they knew of the existence of the OP's drawings, would probably seek damages from the OP, and the OP would have to go through the process of defending themselves and proving that the plans were stolen and misused without their knowledge.

The OP was also worried that accepting payment for the stolen drawings would mean they had to accept liability for the misuse. However, if settlement of this case is handled properly, that should not be an issue.

With regard to liability in general, you seem to be suggesting subcontractors and subconsultants cannot face liability for damages. That is certainly not true.

@gte447f CWB1 is correct - the homeowner who hires the contractor who then hires the engineer has no contractual relationship with the engineer. Therefore, any damages due to inadequate design will have be collected from the contractor who provided the end product supported by those services. However, the contractor is unlikely to swallow that loss, and will in turn sue the engineer for giving them a bad design. So the liability still exists, just through a different path.

Regarding the IP question, it's important to note that we're talking about Copyright. Not patents. If a company develops an idea for a product or a system and hires an engineering firm to come in and develop that solution in detail, the ownership of the patent is going to reside with the company that hired that engineer. But that's not what we do in the AEC world. Let's face it - our work is highly derivative. We're not coming up with unique solutions, we're applying combinations of typical solutions in ways that may not be common, but we rarely get to the point of a patent-able solution (Side Plate and similar systems notwithstanding). Our work falls under creative works rules for copyright, and for buildings that extends to houses, offices, hotels, and other buildings that humans can occupy. Bridges, bulkheads, dams, etc. are generally not covered as I understand it.

If I buy a book, I own the physical copy of that book and have the right to read it. I do not have the right to disassemble it, scan it, change the name in the by line, and post that PDF to the internet or reprinting and selling it. That would be a copyright violation. The same goes for copyrightable structural engineering design drawings for buildings. My client has the right to read those plans and a license to use them in the construction of a single instance of that building at the site listed on the plans. Using them again elsewhere without permission is akin to copying and reselling that book. That's why most of us have licensing language clearly spelled out in our service agreements and contracts. Looks like the OP did, so the question of who owns the right to control use of the drawings is pretty clear:

bigmig said:

he signed a contract acknowledging ownership of the drawings is mine.

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The fact that he knows the plans were used, might change liability.