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I created a software package that aids electrical engineers with common calculations used on site (substations to be specific). I created the package in my own time, without being asked and without guidance. The package is now widely used within my company and I intend to distribute it nationally.

Do I own the copyright? My contract does state that all work produced is theirs, but this was outside of work and outside of my 'scope of work'. My company is mainly a civil and construction company and had no influence in the creation of the program.

From comments: This is the paragraph "During the course of your service, you will disclose to the company all information, formulae, processes, inventions or improvements which you have learned, discovered or evolved during the course of your service or in connection with the business of the company and will sign any necessary documents to enable the company to obtain patent protection whether still in the company service or not. " They are taking it seriously and have got their lawyers.

UPDATE::::::::::::::: email just received

Dave,

As you know we've been pursuing the request you and your patent attorney raised earlier this year, paraphrased below:

... a patent attorney, who has advised me to seek official clarification from {redacted} over the IP and copyright ownerships before I launch the company. In effect, they will produce a legal contract which states all IP and copyrights are owned by my self in exchange for free copies of {redacted} for all MUS engineers. The free offer doesn’t extend to partner companies.

This review process has taken longer than hoped as we are obliged to review our contractual position with the {redacted} and also with our employer {redacted}.

However, {redacted} are willing to release all IP an copyrights on the condition that we continue to use {redacted} for our {redacted} engineers and receive a 15% royalty on the profits derived from the sale of {redacted} licences over a term to be agreed.

I am more than happy to discuss this proposal with you at a mutually convenient time, and we can use your legal advisors or ours to draft a IP transfer agreement.

Kind regards,

{redacted}

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Speak to the legal department in your company AND speak to your own lawyers. –  FrustratedWithFormsDesigner Jun 23 '11 at 18:23
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@Dave Mess: See answers.onstartups.com/questions/19422/… –  Ben Hocking Jun 23 '11 at 18:32
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@Shauna: Because it's not a direct answer, it's the lawyers (and maybe his boss/manager) that will be able to properly answer this. Also, I'm pretty sure this has come up here before... /me goes to search for duplicates –  FrustratedWithFormsDesigner Jun 23 '11 at 18:36
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@Frustrated: Not a dupe, that was about something written at the company on company time, while this is about spare time work. The fact that it's relevant to the company does complicate things. –  David Thornley Jun 23 '11 at 18:40
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The company may have an arguement that without the knowledge you gained on the job you would not have had the idea for the tool. It is not so much about your scope of work so much as their scope of business. You may be able to get compensation for the time you spent creating it if you can document the time spent off the clock. (I am not a lawyer though so I would get one unless you are willing to just roll over and take it... in the end. –  Chad Jun 23 '11 at 19:03
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closed as too localized by FrustratedWithFormsDesigner, Jonathan Khoo, Walter, LennyProgrammers, Anna Lear Jun 25 '11 at 3:05

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11 Answers

Don't rely on legal advice from random people on the Internet. You haven't even said where you are, and this particular question varies from state to state in the US. In California, the copyright would almost certainly be yours; in Texas, it would almost certainly be your employer's.

You need to talk to a lawyer in your jurisdiction that knows something about employment and IP issues. Bring your contract with you. It may not actually matter (the law may override the contract), but you don't know that right now.

Once you know what the legalities are, you need to decide what to do. You may decide it's not worth annoying your employer, or you might smooth things over. It's impossible to say from here.

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I'm in UK, but all your advice is helpful and informative, thanks –  Dave Mess Jun 23 '11 at 18:50
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+1 for "Don't rely on legal advice from random people on the Internet." –  FrustratedWithFormsDesigner Jun 23 '11 at 18:53
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Just because we are not lawyers does not mean we cant play one on the interwebtubes. –  Chad Jun 24 '11 at 12:25
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As @Frustrated said, only the lawyers can decide this, but given that the package is now widely used within the company, it may be the case that your employer will see this as an opportunity to keep a useful tool away from competitors and prevent it from being distributed. I know that sounds trivial and jerky, but that is often the way that business people think.

I would consider it to be probable that your employer will attempt to assert ownership of the software. The mere fact that it is widely used inside your company will given them ammunition and motivation to make that argument.

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It gets more complicated... the program was put before the board of directors with an investment paper to commercialize. They turned it down and I was told I could distribute it as I pleased (although only verbally which I regret not getting in writing now). I then proceeded to develop it further and put it online. Now they have had a second look and want in. –  Dave Mess Jun 23 '11 at 18:38
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D'oh! Sorry to hear about that, @Dave. Everyone needs to be burned really badly once before they learn the rule It Ain't Real 'Til It's Written Down. –  Adam Crossland Jun 23 '11 at 18:41
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@Dave - That complicates things even more but I'm not sure how the verbal contact laws work in the UK. In the state of Texas that would have been enough to override any signed contracts that where in place or at least give you a strong leg to stand on it court. –  rob Jun 23 '11 at 20:20
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David - the difficulty you are in is considerable, after reading the various comments here.

Firstly, in the UK, as far as I know the common law (so going back a damn long time) pretty much gives the employer the fruits of your labour - irrespective of the hours of the day when you spent your time. This (so I am told) goes back to the old days of master/servant, where the servants output was the property of the master. Employment is effectively a master/servant relationship.

Notwithstanding this, there are a bunch of other factors:

Firstly, you have a clear statement in an employment contract, this clarifies the position of the employer, and they will own pretty much anything you do related to their business. (This is normal.... for example, if your employer makes cricket bats, and you decide to go home and make bats that look different then tough luck to you, but if you build model trains then its clearly unrelated.)

Next, you took it through the right channels and the company didn't want to do anything with it, and gave you permission to do what you wanted. (Your failing: not getting that in writing). HOWEVER, there are such things as verbal contracts and you stand a good chance of being found in the right, especially because there should have been witnesses, and secondly because you did it all through the right channels.

Next, the company has PUBLISHED in a newsletter that you did this in your own time. That does not mean they implicitly assigned rights or anything, but it does make for an acknowledgement of the relationship, which a good lawyer should be able to exploit to your benefit.

Consequently, you desperately need legal advice to match the lawyers that the company is already throwing around. This will cost you, but you have 2 choices only:

  • take 'em on
  • hand it all over to them and walk away

I suspect if you were to do either option, the employment relationship you have has been soured and staying with them will be difficult.

This will cost you money. If you take them on and it goes to court, you might win. Just make sure you go for costs as well.

IANAL. You need one.

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Add to that: Once you get into a legal battle, you had best be sure the software is worth it (£100,000s?), or only the lawyers will win. I have had enough dealings with the UK legal system to know that the best/most expensive lawyers generally win (unless you annoy the judge). –  TrueBlueAussie Jun 24 '11 at 7:22
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Irrespective, the lawyers ALWAYS win. We're in the wrong profession. –  quickly_now Jun 24 '11 at 8:35
    
IANAL but IIRC from 'Ethics in computing' course it depends also on job description. In any case my 'common sense' states that the contract covers the tools. –  Maciej Piechotka Jun 24 '11 at 16:22
    
The law overrides ethics. –  quickly_now Jun 25 '11 at 4:36
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My favorite company legal taunting is to email then and say that you create <some bizarre fetish> video in your spare time - and since the company owns all the work you do, could they send you a company logo image to use with it? It's best to only do this if you are indispensable or in the union –  Martin Beckett Jun 25 '11 at 19:43
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If you signed a document containing that paragraph, I think you're screwed. The program you wrote is "connected to the business of the company" and therefore by allowing the company to use it you have "informed" them (as was your requirement) and they have the clear patent right. You can fight it, but you agreed by your signature to this paragraph, which makes no exception for work performed outside course and scope of employment.

You have one shot: first, you must be able to prove that you created this software with absolutely no resources provided to you by the company. That means you developed it at home, on a computer you bought, with an IDE you paid for. Even if you were "clocked out" or working after normal hours, if you wrote any part of it on your work computer they own it, plain and simple, because you produced it using materials they gave you which belong to the company, and thus the argument is very strong, especially if you're salaried and exempt, that you were simply working extra hours for them. You may even be in trouble if you took home a book from their technical library containing the calculations you integrated into the program; it's weak as most academic knowledge such as electrical physics equations is public domain, and thus you could have gotten it from anywhere.

Then, you have to argue that the agreement is infringing on your ownership rights by laying claim to property you own which is separate from your course and scope of employment. It would be equivalent to them saying they own your car because you bought it with the money they paid you and you drive it to their workplace every morning; absurd. Now, they will try the counter-argument that if you had not been working for them, you would not have developed this program. It's a weak argument by itself but it establishes a link to the program and your employment, allowing them to go back to your employment agreement. You will have to refute that, probably by stating that you did it because your work in this field is part of who you are as an individual, which is seperate from your work. That will require some evidence that you were an EE, or worked closely with them, before you took your current job, and that you will continue to be so or do so after you leave.

It's a sticky situation, and IMO you should be prepared to lose. If you do lose, understand that you can't just re-write the program, first because that will create a "workalike" that infringes on their IP, and second because you will be violating your non-competition clause.

Good luck.

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thanks for the response, I assume you have some knowledge in this area. My next question would have been if I left the company could I re-create it but with sufficient differences –  Dave Mess Jun 23 '11 at 19:35
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I only know the basics of case and contract law in the US, which is related but can be very different to that of the UK. The key point is "sufficient differences". OpenOffice doesn't infringe on MS Office's IP because the codebases were independently developed and share no common codebase; only open standards (I believe they weren't even written in the same language). The problem here is that both programs will share a common source - you - and so you have to take extra steps to ensure the new codebase differs substantially. This isn't a re-skin or even a re-write; it's a re-think. –  KeithS Jun 23 '11 at 19:41
    
cheers for the advice –  Dave Mess Jun 23 '11 at 19:45
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First off, I am not a laywer, but I think the following might be a big problem for you:

I created the package in my own time, without being asked and without guidance. The package is now widely used within my company and I intend to distribute it nationally.

Regardless of if you wrote the problem on company time or not, which is it's own legal quagmire, as soon as you brought the program into the office and allowed others at the company to use it and to provide you with feedback on it, you blurred the line between "your time" and "company time". This is pretty much where you really need to get a good lawyer if you want to try and fight and distribute things on your own.

However, you might also want to see if the company is willing to cut you a deal and just pay you some sort of significant bonus or other form of compensation for the program and be done with it. Unless you are certain that the software is worth enough to justify the time, effort, stress, and likely money out of your own pocket, that might be a very agreeable route to take that would smooth things over with everyone involved.

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There are several companies who have engineers using it and have contributed feedback, so I don't think that particular point would be used in court of law. In terms of worthwhile, very very possibly worth the hassle. I only have research from free trials to go on, but 200 downloads worldwide in 1st month with no promotion or advertising, along with good reviews –  Dave Mess Jun 23 '11 at 20:48
    
@Dave - Employee's of other companies doesn't really add too much to your case if employee's of your current employer where the first one to see the program. That said though, I'm curious to see how things end up, do you have a blog or the like that you are going to be updating as you go through the process? –  rob Jun 24 '11 at 13:07
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This is hard to answer without access to the contract you signed with your company (the one with all the non-disclosure, non-competing stuff in it). From what you have said, it sounds like you're in the clear. But you wont' get a definite answer from stackexchange; you should ask your employer or revisit the contract if you have a copy of it (or ask for one).

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@Dave Err... are you saying your company already got lawyers involved? In this case you should definitely find legal representation of your own instead of consulting with the Internet. –  Anna Lear Jun 23 '11 at 18:39
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What @Anna said, and to elaborate, DON'T SIGN ANYTHING -- ANYTHING -- until your lawyer looks at it first. –  Adam Crossland Jun 23 '11 at 18:43
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@Anna, &everyone. This is so whack it should be a legal case study. I have had 30 minutes of legal advice from patent attorney but I will have to pay for any more. Their advice was to offer the company free copies in exchange for forfeiting rights, which I have done. My Company is part of an Alliance with the major electricity company in UK and the lawyers have been going through the company-company contracts as well as my own contract to determine who does own the copyrights. I am awaiting their views before I seek further legal advice –  Dave Mess Jun 23 '11 at 18:47
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@Dave I wouldn't wait. Getting your own lawyer may cost you some money, but showing that you're serious about protecting your asset will make them less likely to try anything 'tricky'. –  corsiKa Jun 23 '11 at 20:04
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Agreed - you need legal advice urgently. If you have an accountant, it may pay to ask them who they recommend. If not, find somebody who knows about employment contracts as well as software IP. This won't be a high street solicitor, it will be a firm that charges the bucks. –  quickly_now Jun 24 '11 at 5:14
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IANAL, but it would be really hard to prove in court that you did something on your own time, and it would be even harder to prove that things you learned on the job in no way contributed to creation of this software package.

With that being said I have heard about people who claimed IP and were financially ruined by legal action brought against them from the company they worked for.

In most cases though the company will either not know about it or not care about what you are doing until you actually are ALREADY SUCCESSFUL and made a boat load of money. At that point they usually sue and you have enough money to afford good lawyers who can probably get them to settle for a piece of the pie.

It's a roll of the dice but the stakes are high. I might do it if I were single and didn't have a family.

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in terms of my own time, they published a feature in the company newsletter where it clearly states it was produced in my own time. –  Dave Mess Jun 23 '11 at 19:14
    
@Dave, Wow... this is actually not so cut and dry anymore, plus you are in the UK which I read in a comment, and I couldn't even guess what IP laws are like over there. Do the judges still wear powdered wigs :) ? I think you need a lawyer and BADLY! The company could ruin you even if you don't want to monetize it. –  maple_shaft Jun 23 '11 at 19:18
    
you know I think some still do ;) UK law basically states if it was made in work time its theirs, it doesn't clarify further. –  Dave Mess Jun 23 '11 at 19:27
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In the US, a lot of this would typically depend on something you haven't told us: whether you used company resources in writing the program. For example, if you stayed after work, and wrote the program on their computer, using a toolchain they licensed, etc., then chances are pretty good that it would be considered theirs, even though it wasn't a required part of your job.

If, however, you wrote it on your own computer using tools licensed to you, then chances are pretty good it would be considered your property.

Since you're in the UK, it appears that other questions are probably more relevant. According to the relevant law, it seems to depend upon whether the work can reasonably be claimed to have been done "in the course of his [i.e., your] employment". It looks like that, in turn, depends primarily on whether your terms of employment say you needed, or at least could be expected, to produce that software or something similar as part of your job.

My immediate guess based on the language you have quoted is that the rest of the terms of employment will be sufficiently vague that it will be difficult to exclude the software from your scope of employment, so your chances of prevailing in court would not be particularly good.

Don't take that as legal advice though -- I'm not an attorney, and even I was I probably wouldn't be accredited in the UK. In the end, it boils down to one rather simple bit of advice: when you do talk to a solicitor, you'll really need to take along a copy of the contract or terms of employment, or whatever paperwork you got that specified the scope of work you were being hired to do. That will be the key element in deciding who owns the software.

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All my own resources used. My company have no dealings with software in any shape or form and would not have expected me to do this. It's a minefield. T4P –  Dave Mess Jun 23 '11 at 20:05
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The clause you have provided refers specifically to patent protection, not copyright. Do you have any other clauses that specifically mention copyright, or which limit competition? (patent and copyright are quite different)

The invention cannot be patented now, as it's in use, so the clause can have no effect.

You have not clearly stated why you are asking the question. Do you want to sell you software to someone (a competitor or you company), retain control or something else. Your motivation will significantly determine your coarse of action. I would suggest that in the first instance informally talking to you boss about what you want to achieve is a great first step. If you are trying to screw him, maybe not... It is impossible to tell who owns the copyright to the work (very likely to be the company), and determining that will almost certainly cost more than it is worth in legal fees, the more it's worth, the more legal bills, the fees will stack up accordingly.

You really need to come to an agreement before you see a lawyer to formalize it.

Disclaimer : I am not a lawyer.

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the paragraph quoted is the only mention of IP in the contract. I am trying to sell the program via a website. I intend to approach companies directly and offer them the program. I have been fully open and honest with my company and they were supportive until I asked them to agree to signing the rights over to me –  Dave Mess Jun 23 '11 at 22:25
    
You probably have 2 courses of action if you really want to go ahead and sell it. One is spend (potentially) thousands in a legal bun fight, and make the lawyers rich and maybe not get the rights. The other is to sell it anyway, and take the risk you don't end up in a legal bun fight that costs thousands and makes the lawyers rich. You could always retrain ans a lawyer and get rich that way...... –  mattnz Jun 29 '11 at 2:29
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Finding a lawyer that will tell you that the code is yours is as easy as finding a lawyer that wants your money. Truthfully, your rights to the code are only what your company allows your rights to be. If they are lawyer-ed up already, they are telling you in their own way that you can't afford to fight them on this. As an EE I can see your program being useful, but don't see it being worth legal fees as well as income to fight the company on this.

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They may be lawyered up, but that doesn't mean they'll necessarily fight it in court. They may be watching to see if the OP backs down. I think the UK has some sort of loser-pays law, which means that the employer might be on the hook for the OP's legal fees and lawyers. –  David Thornley Jun 24 '11 at 16:32
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You should own the copyright since you wrote it on your own time. However, consult a lawyer as this is a very messy area and one where, sadly, corporations tend to win because they have more money to throw around.

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