Intellectual Property Forums (
Other >> Copyright Forum >> Intellectual Property: Employer/Employee
(Message started by: F.Obermeier on Aug 7th, 2005, 10:21pm)

Title: Intellectual Property: Employer/Employee
Post by F.Obermeier on Aug 7th, 2005, 10:21pm
Over the last few years I have developed a LMS (Learning Management System) for our company.
The LMS is not a a product that our company sells. The company is in the software testing business, and the LMS is only used for our internal use in the Education Services department.

It's a great system, and I came to the conclusion to develop a new LMS from ground up in my private time, and start a company once I'm finished (in 1 - 2 years).

My private system is developed complete new from ground up, multi client-capabilities, more customizable, and no source code was shared. I assume in this case I'm on the save side regarding intellectual property.

Now we plan to go global with my company system, and for many of the added requirements I already have solutions in my private system that I could use for company purposes.
I'm worried once I would start using some of my private algorithms or schemas, it may be harder to proof that my home system is completely independent of what I do at work.

I would really appreciate if you have any insight, experience or references in that area of intellectual property.
To make sure I would have to check with a lawyer, but it would be helpfull if you could get me started.


Title: Re: Intellectual Property: Employer/Employee
Post by JSonnabend on Aug 8th, 2005, 7:44am
If you developed (i.e., designed and/or coded) both systems you describe, and the former system was done in your capacity as an employee, you may be facing some intellectual  property issues in the nature of copyright infringement for the latter product, even if you have not "reused" nor "shared" any code between the two products.  At the very least, your (former) employer is likely to make trouble for you.

- Jeff

Title: Re: Intellectual Property: Employer/Employee
Post by Isaac Clark on Aug 8th, 2005, 2:57pm
I agree with Jeff.  This particular issue (writing software for profit while employed or after leaving a job) comes up very often here.  

In addition to the work for hire related issues, you also have to consider any employment agreements you may have signed.  In some instances the agreements suggest that the employer owns a bit more of the employees "off duty" work than you might expect from work for hire.  

There is also the possibility that some aspect of the software you wrote for your employer is a patentable invention.   Reimplementing that aspect even using completely new code could set you up for a can of whoop if your employment agreement gives your employer the right to that patentable invention.  The funky part about that scenario is that the fact that you did your private version on your own time would be completely irrelevant.

And as Jeff concluded, the employer does not have to be right to make trouble.  Most of the issues would require a bunch of discovery etc. to sort out meaning a count probably would not quickly dismiss even a losing claim by your employer as long as it raised some factual issues.

Maybe some trade secret issues could arise too, but I won't try to flush those out.

A brief consultation with a lawyer should allow sorting through the ifs and maybes and let you know where you stand.  I don't personally practice in this area but others here do.

Title: Re: Intellectual Property: Employer/Employee
Post by F.Obermeier on Aug 9th, 2005, 3:52am
Thanks very much for the response.

I was actually not hired as a developer. I was working as a training and consultant for that company, and moved into Education Services as a subject matter expert for software testing. There I started developing the system because we needed one.
My contract doesn't say software development, and I don't think software development is mentioned anywhere in my MBOs, altough it became a main area of my responsibilities over the years (aknowledged by management).
And since 3 years every few month somebody thinks we should not do software development in Education Services.
Another department actually bought a new LMS for $500,000.00 to replace the system that I have built, but we have kicked it out again and now use it for internal training only not for customer facing training.

So I think I could claim something like this:
The ownership of works made for hire vests automatically in the employer at creation. The difficulty often arises in determining whether the work was created within the scope of employment. Clearly, if the employer has an MIS department, and those employees write some computer code, the employer owns the copyright in that code. But if the employer's bookkeeper creates an accounting package that is better suited to the employer's industry, it may be decided that the employee owns the copyright in the new accounting package, and can market it freely, even to the employer's competitors.
If the new accounting package were created with the employer's equipment, or during business hours, the employer in most cases would have a royalty-free right to use the software, but would not be able to prevent the bookkeeper from marketing the software to other entities, or to demand a royalty from any resulting sales.
(found at:

A very messy situation, I know.


Title: Re: Intellectual Property: Employer/Employee
Post by Isaac Clark on Aug 9th, 2005, 4:35am
If you were my client, I might make that argument, but for salaried employees
the scope of employment thing is not so clear cut. Often the job
descriptions for such employees are extremely broad when HR bothers
to write them.

If you write a tool to use at work to get your job done, then perhaps you
are just being efficient at doing your job, and thus still working within the
scope of employment. Other people may choose non programming ways to
be good at their job because that's where their strengths lie.
I would expect an employer to respond that way to an accountant
claiming his work as a programmer was outside the scope of his

If you did the work on company time and using company equipment,
you are providing classic signs that the programming was "work for hire"
and thus belongs wholly to the employer.

You indicate that you were a consultant. If you were actually
a contractor rather than an employee, a work for hire would require
a written agreement stating such. But determining whether you
were an employee or a contractor is another factual inquiry.

Unless you were an contractor versus a employee, I am very skeptical
about the chances of your argument working.

Title: Re: Intellectual Property: Employer/Employee
Post by George on Aug 9th, 2005, 7:43pm
I'm wondering whether the IP dispute really matters.

You say your plan is to go global. For example, you can set up an office in Canada and sell your software all over the world except US. Can your former employer can sue you in Canada?


Powered by YaBB 1 Gold - SP 1.3.2!
Forum software copyright 2000-2004 Yet another Bulletin Board