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

[MDGroup]

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?

 

[TheTick]

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

 

[msquared48]

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

Mike McCann
MMC Engineering

http://mmcengineering.tripod.com

 

[HornTootinEE]

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.

 

[MDGroup]

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.

 

[TheTick]

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

 

[MDGroup]

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

 

[MiketheEngineer]

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

 

[IRstuff]

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
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[KENAT]

"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.

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[KENAT]

Oh, and IP isn't just patents.

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[zdas04]

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.

 

[Compositepro]

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.

 

[casseopeia]

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.

 

[IRstuff]

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

 

[CorBlimeyLimey]

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.

 

[casseopeia]

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.

 

[IRstuff]

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

 

[patprimmer]

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
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[looslib]

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.


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