Seeking advice on IP transfer from a mechanical engineering perspective.

[behindpropellers]

Hello,

As my employer has ramped down since their product has lost sales. They asked to keep me on with a large cut in pay since my knowledge will help with the sale of the company.

Since learning of that I have been working on getting some consulting contracts doing mechanical design. I was very fortunate to get a nice contract and they needed me to start right way so I did - with only an email as "yes, please get started". I started on the premise of "yes you will own the IP".

The company I am working for has never developed anything mechanical in nature. They want to own all files related to the design. I gave them a document which granted them the IP of the design. It also said I own the files.

I have no problem giving them the files/documents that I design for them. However, there are lots of items that I have developed over the years to make the design go faster such as a library of standard off the shelf components and sheet metal gauge/bend tables.

I have no problem giving them what I paid for, but they want every design related document.

I'm lost at where to go with it, anybody have some advice or possibly their contracts they could share?

Thanks

Tim

 

[MintJulep]

If you use your copy of Roark's, or some other reference text in the course of design would they expect to then take ownership of your book?

Classify your stuff as "reference material" and say that it's the same as a reference book.

 

[IRstuff]

You could possibly give them only PDFs of the reference material

TTFN
faq731-376

 

[zdas04]

I ran into a similar situation. I don't ever provide modifiable copies of drawings that have my name on them--I'm not going to run the risk of a client changing the drawings and leaving my name and logo. One client demanded them and I said "NO". His attorney sent a a copy of our contract with his interpretation of the IP language and a not so veiled threat to sue. I pulled my logo and my name off every drawing and sent them. I also sent a shredded copy of the contract and will not work for them ever again. They've called a few times and I just let it go to voice mail.

I always feel that whoever is paying for IP owns it, and I have no problem with that. I've been the engineer of record for 5 patents that other people own and I'm fine with that. What I've never been fine with is someone else's work being presented with my name on it.

The IP and NDA contracts I see all the time have language that says something like "any knowledge or information that the Contractor possessed prior to the execution of this contract remains the sole property of contractor. Any knowledge or information gained through work done for [other party] is the sole property of [other party]" I take that to mean that if my client shows me a new way to frac a well then I can't share that with my other clients without permission, not that I have to have a lobotomy to exorcise the knowledge.

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.

 

[behindpropellers]

So...

Today I was fired from customer "A" in which I got the big job from customer "B". It will be interesting to see what customer "B" says because customer "A" has never done any development work before.

This is what is in my IP transfer agreement:

(A) Grant of Rights to Client.
Consultant grants and assigns to Client all rights to use any Work Product and to develop,
manufacture, market or otherwise commercialize any product based on Work Product or directly
related to or directly making use of the Services.
(B) Disclosure of Inventions.
Consultant agrees to promptly disclose to Client all ideas, designs, practices, processes,
apparatus, improvements, inventions and discoveries ("Inventions") by Consultant made or first
reduced to practice in the course of performing Services to Client for Client’s product. Provided
Client compensates Consultant for Time and Material associated with efforts associated with
said disclosure.
(C) Assignment to Client.
Consultant agrees to assign, and does hereby assign to Client, all right, title and interest in and
to all such Inventions. Consultant agrees to cooperate with Client and to execute all proper
documents, at the expense (including time at the then current compensation rate), of Client, to
enable Client to obtain intellectual property protection in the United States and foreign countries
in the Inventions.
Limitation.
This Paragraph C shall not apply to any Invention meeting the following conditions:
(1) Such Invention was developed entirely on Consultant's own time;
(2) Such Invention does not relate (i) directly to the business of Client, or (ii) to Client's
actual or demonstrably anticipated research or development; and
(3) Such Invention does not result from any work performed by Consultant for Client.
(D) Consultant's Right to Use Inventions.
Consultant retains the royalty-free right to use an Invention and incorporate it into any product in
a field unrelated and non-competitive with Client. Client retains the right to sell or otherwise
dispose of the rights, title and interests granted by this Agreement as Client sees fit; provided
that this Agreement does not limit the rights of Consultant authorized under the foregoing
provision. Client is obligated to notify Consultant, in writing (30) days prior to such transfer.
(E) Copyright Rights
All right, title and interest in all copyrightable material which Consultant shall conceive or
originate, either individually or jointly with others, and which arise out of the performance of
Services under this Agreement shall be the property of Client and are by this Agreement
assigned to Client. Consultant agrees to cooperate with Client and to execute all necessary
documents at the expense (including time at the then current compensation rate) of Client to
assist Client in obtaining and registering copyrights on such materials in any and all countries.
Where applicable, works of authorship created by Consultant for Client in performing Services
under this Agreement shall be considered "works made for hire" as defined in the U.S.
Copyright Act
(F) Consultant's Ownership of Material.
Consultant shall retain ownership and possession of all notebooks, notes, drawings and similar
materials, including computer generated documents generated by Consultant in the
performance of Services under this Agreement.

 

[patprimmer]

Sorry, but I am confused about your exact relation with company A. Are (or where) you an employee or a consultant/contractor.

I am guessing that you where strictly a consultant to B, but as an employee of A or on an independent basis.

What is the relationship between A and B.

Who is the contract you posted with as it certainly seems very clear that you retain a lot.

Is this a confusion over terminology. ie B really only wants copies? B does not want to deprive you of retaining a second copy?

If B truly wants you to turn over all your previous work that was used for reference in this and your contract above is with B, Just send him a copy of the contract with the rights to retain certain IP highlighted with a simple note "did you actually read this. If so why do you think it no longer applies"

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

http://eng-tips.com/market.cfm

for site rules

 

[dvd]

...free legal advice from non-lawyers, over the internet. What could go wrong?

 

[dik]

The logical 'and' in paragraph (2) is a bit of a problem. It means that items 1, 2, and 3 all must all be true for Paragraph C to not apply.

A logical 'or' may be more appropriate...

You may want to check this with a lawyer.

Dik

 

[behindpropellers]

DVD,

I usually ask questions and get a good understanding before heading for legal advise.

DIK,

Thanks for your reply. I will take a closer look at it.

Tim

 

[behindpropellers]

Pat Primer-

I met company A, did some work for them (next to free). They sent me to company B. Not sure if they have money between each other.

Tim

 

[dik]

Was this issue resolved?

Dik

 

[patprimmer]

So, apart from the reference it could be assumed that A and B be treated as unrelated entities.

As I see it you own any previous work or work you referred to, especially if it was already in the public domain or previously published under copyright and purchased by you. Company B owns the work they paid you to do specifically for them. Obviously this does not include previous work you used as reference material.

But then again I am not a properly qualified lawyer practising in your jurisdiction.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

http://eng-tips.com/market.cfm

for site rules

 

[dik]

...but that's not quite what the agreement says... it goes beyond that. Can you reasonably 'guess' what anticipated research or development a client may have?

I think the agreement is a 'catch all'... and, may go beyond his period of employment.

Dik

 

[IRstuff]

The latter clause is limited by Clause B. The timeframe is clearly intended to be bounded by "in the course of performing Services to Client for Client’s product"

TTFN
faq731-376

 

[dik]

I would suggest that 'Assignment to the Client'... is pretty significant...

Dik

 

[IRstuff]

In what sense? If the Client paid for the development of the invention, why shouldn't he get the assignment?

TTFN
faq731-376

 

[dik]

It's too encompassing...

Dik

 

[jmw]

I started on the premise of ....

And it went down hill from there.
Well it would, wouldn't it.
Never trust anyone in business these days.
Never assume or presume.

IP is a tricky issue and depends on the country.
In the US the employer thinks he owns everything and can make it stick.
In the UK the inventor owns the intellectual rights which extends to be named on the patents, for example, but unless his job is specifically in R&D to create such things, in which case case law suggests a £100 bonus or thereabouts, any other employee has absolute rights over their invention. The most the employer can insist on in employment contracts is disclosure.
These are "inalienable" rights.
You can't sign them away or be made to sign them away. You can sell them to some one else for a couple of pennies if you like, that's your lookout, but the relationship with the employer is very clearly defined because employers can exert undue influence.


JMW

http://www.ViscoAnalyser.com

 

[pierdesign]

What some aren't aware of is that these client-consultant contracts and the terms and conditions are very often standard templates developed by corporate or bought as part of a package. They should always be read thoroughly, acknowledged, discussed, negotiated and amended as required. Always.

The clause claiming intellectual property is standard as are the modifiers claiming prior work used or amended in execution of services. In my 13 years of consulting I have never accepted this: always clarify terms, amend to exclude your prior work, be specific and list prior work items if it helps in negotiation.

As a corporate lawyer from the Coca-Cola company said to me during such prior-work ownership negotiations "We put it in there just to see if we can get it."

Client ownership of "the design" and its intellectual property should always be amended to include "when paid in full".