Confidentiality and Noncompete Agreement 2.5 years into employement 5

[uGlay]

so i was just handed (actually the entire department) a non-compete agreement. everyone promptly signed it with no questions however my role in the firm is that of a mechanical design and i am constantly creating solutions for mechanical problems which require creative thinking and design.

i would have no problem with it except for the fact that a few weeks ago i was in talks of patenting one of the products which i have worked on for over a year.

so basically i was in talks of including my name in the patent of such product (since i pretty much came up with the solution) I as well as project managers and engineers thought it would be fair for my name to be on the document.

now ive been handed this paper, to everyone it was like 'whatever' because everyone else is doing electrical design which there aint much to it just a bunch of lines in cad (ok ok im exaggerating) but everyone signed it. and im the only one who hasnt signed it.

anyways, sorry for my post if it is a bit unorganized but i am a bit shaken right now..

what would you do fellow Eng-r's. I am torn. they are saying i either sign it or im done for in this company.

basically the doc starts with "Whereas employee desires to become or remain employed..."


p.s. ive signed many NDA's with no issues, but this case is different because i was in talks of furthering a patent. Its offensive.

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[IRstuff]

Not sure what you think the connection is. How does this NDA/NC prevent you from getting your name on the patent? Since the patent is most likely to be assigned to your company anyway, isn't it just a matter of recognition as opposed to an change in monetary compensation?

TTFN

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[uGlay]

it doesnt implicitly prevent me from getting my name on the patent but it sure does take a step in that direction.

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[uGlay]

i just re-read it and yeah if i sign this i give up my right to patent anything because i made it during work hours with the work computer.

LOL.

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[drawoh]

uGlay,

Are they obliged to put your name on the patent now?

JHG

 

[uGlay]

no they arent. but the whole reason why that product was considered for patent is because a similar product (by our competitor) was found to have one.

this other company's patent includes the entire engineering team that worked on the product.

i should just sign this stupid thing, keep my mouth shut and continue working...



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[IRstuff]

Actually, the fact that the patent was yours already is simply a reflection of the fact that the rule was already in place. The document is simply codifies what was already an existing rule.

Since you used company resource and were being paid the company to solve problems, it's generally accepted that the company owns any inventions you come up with, unless your invention has no bearing on your work. But then, why would they be patenting it?

In any case, you can still get your name as the inventor, but the patent is assigned to your company, which is pretty standard practice, at least in the US.

TTFN

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[MacGyverS2000]

Not your patent if it was on company time and you used company equipment... not much leeway on this one.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[IRstuff]

I've worked for 6 companies, and they all had the same policy. It may be that your previous companies simply allowed you to have ownership of what was otherwise their property.

Note that being listed as inventor does not make you the owner of the patent. Unless the assignee of the patent is also you, you don't own the patent, and cannot exercise any of the patent rights, which is true of my 3 patents that were actually issued and my 8 inventions that didn't get to that stage.

TTFN

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[rowingengineer]

uglay,
Consider yourself lucky if you hold patents for projects while working for a company. Generally as the others have described, if you work for a company use their equipment and get paid for it, anything that is produce under this arrangement remains the company’s property. Must ask do you receive royalties for these products that you have patents from other companies?

The non-compete agreement comes up all the time in these forums, depending on your location they may or may not be enforceable, in my home town they are not enforceable.


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[IRstuff]

Lest you still think that this is unique, attached is a patent awarded to 10 employees of a smallish company in Tennessee. Note, however, the Assignee is their company, so they are the inventors, but the company owns their invention.

http://files.engineering.com/getfil...850625_Sensor_fusion_apparatus_and_method.pdf

TTFN

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[MacGyverS2000]

stick to soldering LED's on car parts.

Funny... my comment wasn't meant to be taken in a nasty tone, I was just short on time when I replied. Though your response speaks volumes about you...

FYI? The LEDs are a self-sustaining hobby side-business, along with my growing laser engraving and CNC business. My "day" job is as a firmware engineer for one of the biggest medical device companies in the world, where every day I work on projects that are constantly scoured for patentable ideas. In between time I'm writing a book on laser material processing and there will more than likely be a few patents coming out of my testing. Maybe you should consider that before dismissing my views so quickly...

Dan - Owner

http://www.Hi-TecDesigns.com

 

[uGlay]

IRstuff thanks for the insight into your patents. I also am listed as inventor not the owner.

this document i have been handed states i vest ALL titles to the company for such patent.

in my opinion, if you want to stifle creativity and have employees that put in the bare minimum this is a surefire way of attaining that. a small 1% incentive drives employees to innovate and create things that are marketable and as such patentable. and if there isnt a royalty just tack it onto the emotional paycheck of having your name on a United States patent. :shrug:

But in this case my opinion may not count. So i simply fall back on the fact that i had been in talks with other employees about filing a patent for a project i have been working on for a 1 year now.

Why didn't I talk to the company earlier about royalties and patent rights?
When i started working here i didn't see potential for products that could be patentable because of the nature of the work we were doing but then they landed some bigger contracts and that changed. couldashouldawoulda.

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[patprimmer]

uGlay

Dan was correct.

You are carrying on about pissing rights. Unless you have a very unusual contract or work in a country or state with very unusual laws, the company owns the IP for anything you create on their time, especially on their property. In some areas or contracts you even need to be careful or they might claim ownership of stuff you do on your own time.

Being listed as inventor while nice is only prestige.

Many employees work for their agreed salary (ie meet their end of the contract)and do a good job without being melodramatic prima donnas or expecting extra payment for simply doing their job well.

It is once again interesting that all responses to date seem to presume uGlay is working in the USA although his location was never disclosed.

A non compete contract is quite a different thing to being recognised on patents and I am sure laws vary greatly from state to state even within the western developed world.

Certainly here (Australia) any employer who tried to stick you with new unfavorable terms after you where employed would be in trouble with the law, at least right now. Out last federal election, and probably the current one where fought with this being a major issue.

Basically, a company has a right to retain any IP and customer relationships generated by their employees whilst on the job, however employees re also entitled to work for a living and companies have no right to force you into a position where you are unemployable. There is a huge grey area in the middle and different regimes and even different times may influence the legal status in such regards.

Regards
Pat
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[Ron]

uGlay...non-compete agreements can be a condition of beginning employment, but not sure it's legal to interject an NCA on existing employees, particularly if you might be fired for not signing. You are in a "right to work" state, so you can be fired for little or no reason with no recourse.

Check with the National Labor Relations Board.

 

[IRstuff]

this document i have been handed states i vest ALL titles to the company for such patent.

That's what I was talking about; it basically allows you or whoever to be the "inventor" but the company owns the patent. In most companies, it's not necessarily bad; we got $400 for an invention disclosure and $1000 for the actual patent award, along with a nice plaque of the patent title page.

To have expected anything more is probably too naive. How do you think companies get the patent portfolios they get to barter and batter with?

When Hitachi got caught stealing trade secrets from IBM c.1984, they promptly sued everyone else using their massive patent portfolio, hoping to catch some dough. Fairchild was sued for $50M, but managed to beat them down to $7M, which was still pretty massive. Luckily, we had lots of packrats who could pull out either existing literature, textbooks, or other artifacts that demonstrated that many Hitachi patents were invalid. Not unexpectedly, I didn't even get a pat on the back for helping save the company $43M plus lawyer's fees. Such is life when playing with the big boys. And that was a way more tangible scenario than most patent assignments, where any potential payoff is still way in the distant future.

Given that most of my other companies spend something on the order of $10K to get a patent award, it's a big investment with no guarantee of payoff.

TTFN

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[moltenmetal]

OK uGlay, it sounds like you work for a place which made some mistakes when they hired you!

An NDA needs to be signed before you see anything confidential or proprietary to be legally effective. That said, any employee has a basic fiduciary duty to their employer not to reveal information which would be damaging to their business, unless it's related to some illegal activity the company might be engaged in such that whistleblower protections would kick in.

A document making it clear what you get, if anything, from the assignment of patent or trademark rights for intellectual property developed for your employer while you are employed, needs to be in place BEFORE you invent anything- otherwise it leads to unpleasant situations like this!

It is VERY rare that an employer would permit their employees to invent stuff on their nickel while allowing the employee to retain title to the invention. It is NEVER the case that an employer will pay the legal costs of obtaining a defensible patent that their employee will wholly own. It SOMETIMES happens that an employer will give employees SOME patent rights, such as a royalty, as a reward specific to their invention- nice places, those! It is TYPICAL that an employer will give some token payment for the assignment of rights and give nothing thereafter- the token payment making it very clear that some "consideration" specific to the assignment of rights changed hands to make this a legally binding contract. On the plus side, in those cases the employee will not have to spend anything defending the patent against challengers- the boss picks up that rather hefty bill.

Patents MUST list the inventors- that is not a "nice to have" honour, it is necessary to make them legal and defensible.

While it is true that an NDA and total assignment of patent rights is customary when you are employed, I'm not a lawyer and hence can't advise you if your employers have any leg to stand on by claiming that such agreement was an implicit part of your contract, or so customary that you should have considered it to be so. Nor can I advise you whether or not the company can legally compell you to enter into such agreements after the fact with the threat of losing your job and get away with it.

Bottom line: if you like your job there, sign the papers. If you don't, or you think that this thing you've invented might possibly have enough market potential to make future employment unnecessary, then perhaps talking to a real live lawyer would be a good idea.

Wow, being a mere employee can suck sometimes, can't it?! Then again, it has its long list of benefits too.

There was a good link to a humourous paper titled "the case against patents" which I quite enjoyed but can't be bother to search for you right now. You should read it, lest you think that beyond being listed as an inventor on a granted patent (a nice thing to add to your resume), you're REALLY losing much that is truly of value to you as an individual.

 

[KENAT]

uGlay, they introduced similar contracts here just before I started - though I think the emphasis/big issue was the non compete part.

Some of the old folks weren't too happy.

At least one got in a big fight with management and quit.

He now works for the competition across the other side of the parking lot.

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[TheTick]

Inventorship on a patent is a matter of legal record. Must be accurate and can't be erased. Does not imply ownership.

 

[mbt22]

uGlay,

This may be a silly question, but have you asked the company lawyers/patent attorneys if you're going to be dropped from the patent as an inventor?

The whole inventorship thing seems like a non-issue. My simplistic reading is just i) patent assigned to company, so they can exploit it; ii) you get listed as inventor, which to be honest is useful for bragging rights and maybe CV points. People get listed as inventors, not corporations.

As usual, I'm not a lawyer, you wouldn't ask a lawyer to design a vessel for you etc etc.

Matt