Intellectual Property Forums (http://www.intelproplaw.com/Forum/Forum.cgi)

(Message started by: rickh on Oct 5th, 2007, 1:49pm)

Title: Ownership of invention (hire to invent)
Post by rickh on Oct 5th, 2007, 1:49pm
Hello everyone,

I need some advice regarding the rights of our company for the design and development work which we paid Company B to perform.  The issue at hand is the "master file" to the design.  Apparently Company B is statinig that the work is proprietary to them even though the invention was our idea.  



What we have in writing:
Company B produces a proposal for the design and development of our product, which is extremely vague and general.  Becuase of this, we requested Company B to insert expected "deliverables" so that we're clear on what is expected at the end of the R&D life cycle.  Company B inserted our deliverable statements into their proposal after what I believe is their acceptance of the deliverable statements.  One of the deliverable is "The complete specifications for all of the parts which will require manufacturing."  

With the final phase in progress, during a telephone discussion w/ Company B, Company B states that the deliverable will be Adobe .pdf and IGES files, but not the master file.  When questioned, Company B provided some really poor examples (ex: when purchasing a vehicle, the purchaser does not receive the specifications for all parts within the vehicle / his customers usually do not request the master file) as to why the master file does not belong to us.

As I stated in this post, one of the deliverables (in writing since Company B inserted it into the proposal) is the "complete specifications" for x parts which will require manufacturing.  Who has the right to argue if the "complete specification" include or does not include the master file?  To us, it seem like Company B is selectively handing us what they feel is necessary, but not all "work" that we paid for.

Our relationship w/ Company B:
We "hired" Company B to invent a product which resulted from our idea becuase we don't have expertise in CAD.  We established a relationship with them to produce the CAD drawings.  Our company checksare issued on their request for work that they claim they're doing.  Company B works on various projects outside of what we paid them to do.  What is my relation ship w/ Company B?  Employer-employee? Not exactly since they're not on an official state payroll as an employee for our company.  We simply cut company checks to them for phases within the R&D life cycle.    


From our perspective, we feel that this relationship w/ Company b is a "hired-to-invent" situation.  And if so, shouldn't we have rights to the master file? Or better yet, shouldn't we legally "own" the master file and all work performed on our behalf (after payment was made)?  Does our relationship with Company B qualify as "hired-to-invent"?

I've done alot of reading into Work for Hire and hire to invent, but cannot positively conclude that the "master file" belongs to us due to the relationship we have w/ Company B.  Can I safely assume that this relationship falls under the hired-to-invent doctrine and that all work for our invention legally belong to us?  

Thank you for your time.

Title: Re: Ownership of invention (hire to invent)
Post by Bill Richards on Oct 5th, 2007, 8:11pm
Although I've never seen the "hired-to-invent" concept applied to a company, I suppose it's possible, but I have my doubts. I've never seen any cases like it. In the US, it's individuals who are inventors, not corporations. Unfortunately, these cases are very fact-specific and more information would be required that would be proper in a public forum. There have been many, many cases like this and it swings on who conceived the invention and what were their obligations. I have an entire presentation with a couple of dozen cases that coverinventorship. It's not something that can be answered in the abstract.
Short answer to your question, "No".

Title: Re: Ownership of invention (hire to invent)
Post by Richard W on Oct 6th, 2007, 12:33pm
Thank you for your reply.  It's just difficult to fathom that the inventor (Company B) reserve the rights to the "master file" even though this file is a product of what we paid for (R&D).  If we did not engage him with our idea, he would of never conceived it.  With that file in his possession, he is able to monopolize (on certain changes to the product) our idea (if we want those certain changes, done, we cannot go to anyone else but him).  Furthermore, this monopolization makes it very inconvenient for our company if Company B moves to a location no longer convenient for us to do business with or closes doors.

Title: Re: Ownership of invention (hire to invent)
Post by biopico on Oct 6th, 2007, 3:34pm
OP meant to mean an individual(s) who is a representative of the company B?

Legal action is a way to discover the details.

Title: Re: Ownership of invention (hire to invent)
Post by Bill Richards on Oct 7th, 2007, 1:35am

on 10/06/07 at 12:33:46, Richard W wrote:
Thank you for your reply. It's just difficult to fathom that the inventor (Company B) reserve the rights to the "master file" even though this file is a product of what we paid for (R&D). If we did not engage him with our idea, he would of never conceived it. With that file in his possession, he is able to monopolize (on certain changes to the product) our idea (if we want those certain changes, done, we cannot go to anyone else but him). Furthermore, this monopolization makes it very inconvenient for our company if Company B moves to a location no longer convenient for us to do business with or closes doors.

Thanks for the clarification.  What you may have is more of a contract issue rather than an inventorship issue.  Again, it's the details of the development agreement that will dictate the outcome.  As a contract issue, it will be determined by state law so you'll need to discuss this issue with an attorney licensed to practice law in the state in which the contract was made.  (Unless the laws of another state are invoked in the agreement.)  As I understand your posts, you have an independent contractor case.  Again, state law will determine the outcome.

Title: Re: Ownership of invention (hire to invent)
Post by rick hoang on Oct 8th, 2007, 1:59pm
I guess the only question now is, what is Company B's relationship with our company in CA?  Unless that is answered then we won't be able to identify what state laws can be legally enforced.  

In summary:
Our company issues payment (via company checks) to Company B (made payable to company B or the owner).  
Payment is made PRIOR to starting of any work.  Have emails from owner requesting payment prior to starting any work.


Is he a contractor?  We hired him to design and develop our idea into a product.  

Where can I find something in writing which is valid and can be used in court?

Title: Re: Ownership of invention (hire to invent)
Post by Isaac on Oct 8th, 2007, 3:41pm

on 10/08/07 at 13:59:32, rick hoang wrote:
I guess the only question now is, what is Company B's relationship with our company in CA? Unless that is answered then we won't be able to identify what state laws can be legally enforced.


While I think the law of the jurisdiction is important, I agree with Bill that the issue is primarily unrelated to intellectual property law, but is resolvable by construing the meaning of the terms of your agreement. Even if you did own a copyright or patent covering the contents master file, you probably couldn't use an infringement theory to pry the particular physical copy out of the hands of the contractor unless the contractor made an infringing use of the material. Trying to extract more money out of you to turn over the master file would not constitute copyright or patent infringement.

So the real issue is whether the files you wanted are reasonably construed as something your agreement covers. I suspect that the answer would be fairly consistent in most jurisdictions, but obviously I don't know all of the facts.

From your description it seems highly unlikely that company B were employees of your company in any sense that would help resolve the issue in your favor.




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