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(Message started by: Pake on Nov 6th, 2004, 7:27am)

Title: Employer's IP - My Freedom
Post by Pake on Nov 6th, 2004, 7:27am
A coworker and I developed an ATE (automated test equipment) for my present employer. It uses another company's data acquisition boards, an interface circuit board we designed at my present employer but had made externally and software we designed at my present employer. The interface circuit board uses simple standard circuits designs available in many engineering and data books.

We have been told by our manager that if we try to work for another company building an ATE or try to start our own ATE company that my present employer would come after us with their lawyers. We feell that this is a very broad statement which limits our future prospects. The only IP we see here is the specific application which runs the system which of course we wouldn't use elsewhere.

It's doubtful that we would leave this company but you never know and ATEs are widely used by different companys. If is a very general concept.

Title: Re: Employer's IP - My Freedom
Post by JimIvey on Nov 6th, 2004, 7:27pm
It depends on the state you're in and what agreements you might have signed.  There are generally two kinds of agreements (or two kinds of clauses that can be in the same agreement or in separate agreements).  One is trade secret.  The other is non-compete.  Both are creatures of state law, not federal.

FWIW, California tends to favor the employee in these circumstances.

Now, you're right to assume that a trade secret has to be secret to be protectable.  You should be able to buy the same off-the-shelf parts at a new employer that you buy now.  However, one of the first things you learn in law school is that anyone can sue for just about anything.  The real question (for the attorney or law student) is whether they will prevail on the merit (or survive summary judgment).  

Of course, I'm very much aware that just being sued is very unpleasant.  So, the bottom line is that there's not much to prevent them from giving you a hard time.  There are penalties for filing frivolous law suits (despite the popular belief to the contrary), but there are things less than law suits that are annoying and unpleasant.  So being right isn't always enough to make your life pleasant and simple.

And, by posting here, I assume that you're not missing the following point.  You might consider re-evaluating your current situation when a "good job" might be appropriate but instead you hear "we'll sue you if you leave."  I'd rather not work at a place like that.  Just a thought.

If you can nail down a relevant state and whether non-compete clauses apply (I'm assuming an NDA of some sort is in force), someone here who knows more about that type of law might be able to give more pertinent thoughts.


Title: Re: Employer's IP - My Freedom
Post by Pake on Nov 7th, 2004, 9:20am
The paper I signed is as follows:

In consideration of my employment by ***** and of the salary or wages paid to me, I agree.

(a) to disclose and assign to the company as its exclusive property, all inventions and technical or business innovations developed or conveived by me solely or jointly with others during the period of my employment, (1) that are along the line of the businesses, work or investigations of the company or its affiliates to which my employment relates or as to which I may received information due to my employment, or (2) that result from or are suggested by any work which I may do for the company or (3) that are otherwise made through the use of company time, facilities or materials.

(b) to execute all necessary papers and otherwise provide proper assistance (at the company's expense), during and subsequent to my employment, to enable the company to obtain for itself or its nominees, patents, copyrights, or other legal protection for such inventions or innovations in any and all countries;

(c) to make and maintain for the company adequate and current written records of all such inventions or innovations;

(d)  upon any termination of my employment to deliver to the company promptly all items which belong to the company or which by their nature are for the use of company employees only, including, without limitation, all written and other materials which are of a secret or confidentual nature relating to the business of the company or its affiliates.

(e) not to use, publish or otherwise disclose (except as my company duties may require), either during or subsequent to my employment, any secret or confidential information or data of the company or any information or data of others which the company is obligated to maintain in confidence;and

(f) not to disclose or utilize in my work with the company any secret or confidential information of others (including any prior employers), or any inventions or innovations of my own which are not included within the scope of this agreement.

This agreement supersedes and replaces any existing agreement between the company and me relating generally to the same subject matter. It may not be modified or terminated, in whole or part, except in writing signed by an authorized representative of the company. Discharge of my undertakings in this agreement shall be ann obligation of my executors, adminstrators, or other legal representatives or assigns.

A few other points:

My coworker didn't sign any such document until after the system was developed. He was hired a few years before me. I believe some incident in the company prompted the manager to make sure all employees had such documents on file.

My coworker and I are not actually classified by the company as engineers. We are classified as electronic technicians (hourly). I don't know that this matters.

Title: Re: Employer's IP - My Freedom
Post by JimIvey on Nov 7th, 2004, 1:04pm
I don't any clauses re agreeing not to compete (i.e., not to work for a competitor or to create a competitor of your employer.  I also don't see any attempt to get you to promise not to disclose/use publicly available information used by you within the company.

All in all, it looks like you can go forth and prosper, using any publicly available information at your disposal.  Your original post suggested the whole system was made from publicly available information and information you wouldn't use anyway.  Looks okay to me.  

However, that doesn't mean they won't try to harrass you or even sue you.  Like I said, being right doesn't guarantee you a peaceful and trouble-free life.  There are penalties for filing frivolous law suits, but you'd have to show up to court, and allege and prove frivolity in court.  In other words, there's really no way to avoid participating in litigation of some sort, even in frivolous law suits, without simply giving in to the other guy.

Good luck.

Title: Re: Employer's IP - My Freedom
Post by Isaac Clark on Nov 7th, 2004, 2:11pm
As I see it, the main things to worry about here are whether you
employees have come up with anything patentable and whether
there is anything protectable as a trade secret.

Even though the interface board is made up of off the shelf
components there is still some chance that a patentable invention
is embodied in the ATE somewhere.  If there is a patentable
invention in there, then your agreement with your employer might
prevent you from practicing that invention elsewhere.

On the issue of trade secrets, the issue of whether something is
a protectable secret is going to be state specific, and even if
you name a state, I don't know enough specific law to make a
definitive comment.  But generally a trade secret is something that
gives an advantage because it is kept secret.  The ideas constituting
a trade secret don't have to be copyrightable or patentable they just
have to be something the competition is not doing, but might
if they knew about it.

That said, the comments made by your employer would go
beyond those concerns if they prevented you from working at
another facility.  It does matter (IMO) that you are technicians
rather than engineers or executives, because it affects whether
restrictions on future employment are reasonable or not.  Of
course that is a state specific question too.

The more murky are the issues, the better chance your employers
have of discouraging you (and potential new employers) with
litigation.  A good employer would specifically point out the
technology at issue in this kind of situation rather than
making general threats covering an entire field of endeavor.

It was not clear from you comment whether or not you wrote the
software involved.  That issue could be the source of yet another screed, so
I'll leave it for another time.

Title: Re: Employer's IP - My Freedom
Post by Pake on Nov 7th, 2004, 7:30pm
" It was not clear from you comment whether or not you wrote the
software involved."

Yes we did write the software and understand that to be their IP.

Another point I forgot to explain is this company doesn't actually sell these ATEs. We use it internally for the services the company provides. A competitor would be one who provides the same services.

I'm curious what anyone thinks about the fact that this system was built before my coworker signed an IP agreement. Would the agreement apply retroactively?

Title: Re: Employer's IP - My Freedom
Post by Isaac Clark on Nov 7th, 2004, 8:01pm
Your coworker's agreement does present an interesting issue.
There is no problem with agreeing to assign past inventions for
consideration.  The question is whether getting to keep a job
constitutes consideration for an invention created before the agreement.
The company's position with respect to your coworker is weaker
than their position with respect to you.  But perhaps not fatally weak.

The problem involved with writing software revolves around
work for hire.  Even without a written agreement, the employer owns
the copyright in software written by employees within the scope
of employment.  Employees who leave their companies sometimes
encounter accusations of copyright infringement when they attempt
to write similar programs for themselves or for new employers.
It's more difficult than it might appear to avoid infringement
in such a situation, and what's worse, it's sometimes difficult
to get losing claims dismissed in such a situation.

Title: Re: Employer's IP - My Freedom
Post by JSonnabend on Nov 8th, 2004, 8:40am
I think Isaac is pretty dead-on in his assessment of the copyright issues.  The solution is often to create a "clean room" version of the software; that is, hire software designers/programmers who have not had access to the original code, explain to them what the software needs to do (not how to do it), and let them write the code for you from scratch.  Even if the code is identical to the original code, it is not infringing.

- Jeff

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