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'[EE] Intellectual property rights'
2005\08\21@204505 by Jinx

face picon face
I have a situation. Pretty sure I know my position but want
to double-check with yous fellas. Some of this is directly
relevant, some is background. I'd appreciate any views on
the subject

I was approached to make a prototype. In fact, by agreement,
I made six, which were taken away for sale (they weren't in fact
sold, for a reason I don't think is pertinent here). There was no
dispute at that time about the bill presented, although it hasn't
been paid yet. As the bill was presented before the items were
offered for sale I consider this acceptance. The persons then said
to me "if you aren't going to be our bulk or ongoing manufacturer,
we don't want your prototypes, and now we'll have to pay
someone else to make a prototype". I disagree, because it was I
who said to them early on that, except in special circumstances,
I'm not a manufacturer, I do just prototypes. It's on my business
card, which I gave them at the very first meeting. Plus, I told them
to take this prototype, which is finished and so there's no need to
be making anything else, to a proper mftr for costing and production,
which I think is pretty clear. To me, it's irrelevant who eventually
makes them. The persons are not disadvantaged in any way at all
if I don't do them. Actually they would be better served by someone
already set up

So now comes the question of IP. My feeling is this -

I had no help developing the novel electronic process of executing
the function of the prototype. Neither did I have any help writing
the s/w in the prototype. They have not paid the undisputed bill
(I am still out of pocket for components, components I wouldn't
use in a month of Sundays). The application they want to use this
product for is hardly ground-breaking and many other types of
this product already exist

Therefore, as no account has been settled and no discussion is
forthcoming from them about settling it -

I own all the physical materials
I own the s/w copyright
I own the IP/copyright of the prototype and its novel process

===============================================
If you aren't part of the solution, you're part of the precipitate

2005\08\21@215956 by Kenneth Lumia

picon face

>I have a situation. Pretty sure I know my position but want
> to double-check with yous fellas. Some of this is directly
>

Ask a lawyer - this is the wrong place.

> I was approached to make a prototype. In fact, by agreement,
> I made six, which were taken away for sale (they weren't in fact
> sold, for a reason I don't think is pertinent here).

> The persons then said
> to me "if you aren't going to be our bulk or ongoing manufacturer,
> we don't want your prototypes, and now we'll have to pay
> someone else to make a prototype".

What does your written contract say?  Prototypes or proto and
production?  How much was the bill?  If small, you may want to just eat it,
if the bill is large, talk with a lawyer.

You said the protos didn't sell.  Is it possible that the product may be
a "no starter" for them and they are using the above as an excuse
to cut payments for a product that won't sell well or be cost effective?

{Quote hidden}

Probably true, ask a lawyer.  The real question however, is what
are you planning to do if they don't pay?  It appears you want to
keep the rights to everything, however unless you plan on selling
the design yourself there isn't much to be gained.  You did say
that there is nothing special about the product and that many
similar products exist.  Do you want to get into that game?

In any case, you may want to keep full documentation of the product,
including source code. It is possible that these guys may have
someone reverse engineer your design and do a re-layout and even
use your code.  Proof that they copied the unpaid for prototype is a
good lawsuit.

Ken


2005\08\21@223732 by Jinx

face picon face
> >I have a situation. Pretty sure I know my position but want
> > to double-check with yous fellas. Some of this is directly
> >
>
> Ask a lawyer

Hi Ken,

I am seeking a legal opinion as it applies in NZ. I thought the
topic worthy of at least a little discussion, if only to get people
thinking about their own dealings

> - this is the wrong place.

Not wishing to be argumentative....but I disagree ;-) There are
plenty of people here who have a vested interest in IP law

> What does your written contract say?  Prototypes or proto and
> production ?

Just prototypes, quite clearly. That's mostly what's annoying
me, that they've come back and said I agreed to make a
production run. I don't do production runs and simply wouldn't
say otherwise

> How much was the bill?  If small, you may want to just eat
> it, if the bill is large, talk with a lawyer

Well, it's worth going after, particularly if I don't have to employ
someone to get it

> You said the protos didn't sell.  Is it possible that the product
> may be a "no starter" for them and they are using the above as
> an excuse to cut payments for a product that won't sell well or
> be cost effective ?

The original six aren't cost effective. They priced them at $10
less than they cost to make. If they doubled the price they still
wouldn't be anywhere near what other products sell for. But
that's their poor management, nothing to do with me. As I said,
they accepted my bill, and at this stage that's all I want settled.
It's just that someone else has raised the question of IP and it
seemed prudent to at least look into it

> > I own all the physical materials
> > I own the s/w copyright
> > I own the IP/copyright of the prototype and its novel process
>
> Probably true, ask a lawyer.  The real question however, is what
> are you planning to do if they don't pay ?  It appears you want to
> keep the rights to everything

Not necessarily. It's a product that doesn't particularly interest me
and I would have been prepared to sell off the rights

> In any case, you may want to keep full documentation of the
> product, including source code. It is possible that these guys
> may have someone reverse engineer your design and do a
> re-layout and even use your code.  Proof that they copied the
> unpaid-for prototype is a good lawsuit

I doubt it's going to go that far. They're strictly small potatoes
and I can honestly see this just fizzling out. I firmly believe they
know they've stuffed up and are just wriggling

2005\08\21@225328 by Russell McMahon

face
flavicon
face
>I have a situation. Pretty sure I know my position but want
> to double-check with yous fellas.

IANAL as you know.
But your case sounds sound to me.

> Therefore, as no account has been settled and no discussion is
> forthcoming from them about settling it -

> I own all the physical materials
> I own the s/w copyright
> I own the IP/copyright of the prototype and its novel process

Sounds good to me.
Bet you don't have this well documented and signed by them though :-(.
Which you should have had.
Something as clear cut as what you are and aren't doing re production
volume should be something they are happy to agree to up front. If
they're not then you may want to not start the process.

If I can be of more direct assistance in this particular instance
please advise offlist.



       RM


2005\08\22@035044 by Richard Prosser

picon face
Small Claims Court?

I don't knw too much about it but the Citizens Advice Bureau would be
a cheap way to find out (assuming they sill exist!)

RP

On 21/08/05, Russell McMahon <spam_OUTapptechTakeThisOuTspamparadise.net.nz> wrote:
{Quote hidden}

> -

2005\08\22@035235 by Vasile Surducan

face picon face
Joe, I don't know the NZ laws, however I'm not interested to know those.
>From my experience I could advise you the following:

1. if your customer is a big company, having a lot of money, forget it
2. if you can't agree with your customer, and you have no time to
loose money and several years from your life, forget it
3. if the lost money can be earned in one to three monts, even you
have right, forget it

It's your choose to do as you want to, I wish you success anyway.

Vasile

On 8/22/05, Jinx <.....joecolquittKILLspamspam@spam@clear.net.nz> wrote:
{Quote hidden}

> -

2005\08\22@043757 by Jinx

face picon face
Hey Vasile, how's tricks ?

> 1. if your customer is a big company, having a lot of money,
> forget it

They are barely a company. A rather disorganised bunch as
it turns out. It could happen that they'll wind themselves up
to thwart creditors. Although that would not be a positive
result for them. The business was supposed to be a success

> 2. if you can't agree with your customer, and you have no time to
> loose money and several years from your life, forget it

They are actually being very unresponsive, so I don't know what
disagreements there are. Sounds strange, but trust me

> 3. if the lost money can be earned in one to three monts, even you
> have right, forget it

It hasn't taken a huge effort to present my feelings to them, and
someone else is now looking into it. It's more of a principle thing
now. Why should I get stiffed for a week's work and be stuck
with a load of components I'll never use ?

> It's your choose to do as you want to, I wish you success anyway.

Oh, it'll work itself out. There are bigger players than me taking
an interest in this. But like I said at the beginning, I just thought
it worthwhile making people think about their interactions with
customers

2005\08\22@043924 by Jinx

face picon face

> Small Claims Court?

I've mentioned that to them. Disputes Tribunal it's called now

> I don't knw too much about it but the Citizens Advice Bureau
> would be a cheap way to find out (assuming they still exist!)

They do, and I talked to a knowledgeable chap called Brian
at the New Lynn branch


2005\08\22@051820 by William Chops Westfield

face picon face
On Aug 21, 2005, at 5:44 PM, Jinx wrote:
>
> I was approached to make a prototype. In fact, by agreement,
> I made six, which were taken away for sale...

> The persons then said to me "if you aren't going to be our bulk
> or ongoing manufacturer, we don't want your prototypes, and now
> we'll have to pay someone else to make a prototype".

> So now comes the question of IP. My feeling is this -
>
> I had no help developing the novel electronic process of executing
> the function of the prototype. Neither did I have any help writing
> the s/w in the prototype. They have not paid the undisputed bill
>
> I own all the physical materials
> I own the s/w copyright
> I own the IP/copyright of the prototype and its novel process

Yes, I suppose.  Does it do you any good?

I see two basic possibilities.

1) Your customer intends to rip you off.  Who owns what is a
   bit irrelevant in this case.  They have your prototypes,
   perhaps they can copy out and/or reverse-engineer the software
   and "novel process", and you're screwed unless you're prepared
   to pursue legal recourse (which is time consuming and expensive,
   as other people have pointed out.)

But:  "never blame on malice those things that are adequately
explained by incompetence."  (somebody's law, perhaps paraphrased.)

2) Your customer honestly misunderstood what you were able to
   deliver (more likely, someone thought they understood, but now
   their manufacturing person is yelling at them about the
   uselessness of prototypes that aren't from the manufacturer...)
   In this case, you may have room to negotiate on the intellectual
   property involved, and come to an arrangement that gives you at
   least some payment, and the customer some results, making everyone
   (if not happy) somewhat less dissatisfied.  You might have to eat
   the cost of actually building the prototypes, but on the other
   hand you might be able to pick up equivalent $$ by agreeing to
   assist a 'real' manufacturer in coming up to speed on your design.

It need not be an either/or proposition; perhaps your customer has
discovered that your prototypes are useless to them, and they're
using that as an excuse (having seen the novel bits) to try to get
out of the deal...

And what can we learn from this?  It can be useful for a contract
to spell out specific non-deliverables and non-goals as well as
deliverables.   Intellectual property (such as software, in particular)
ought to be a separate "line item" from physical devices.  Completion
of the IP phase ought to be a good time to collect a good portion of
the payment (ie when you demo a working model, but before you deliver
all of the working prototypes.) (isn't that what people suggested in
an earlier "when should I get paid" discussion?  Was that you too?
If so, you should have taken their advice!)

You should act, IMO, as if you believe that a satisfactory compromise
that is acceptable to both sides is actually possible, up until the
LAST possible moment...

BillW

2005\08\22@061011 by Jinx

face picon face
> Yes, I suppose.  Does it do you any good ?

Yes. If nothing else it means I haven't been totally ripped off.
Trust me, they are suffering more from this than I am.

> I see two basic possibilities.
>
> 1) Your customer intends to rip you off

I don't think that's the case

> But:  "never blame on malice those things that are adequately
> explained by incompetence."  (somebody's law, perhaps
> paraphrased.)

I think there's a fair mix of both on their side. I think I played
it pretty straight. As an individual. As a team they've not got
themselves organised properly to act in concert

> It need not be an either/or proposition; perhaps your customer
> has discovered that your prototypes are useless to them, and
> they're using that as an excuse (having seen the novel bits) to
> try to get out of the deal...

The prototypes definitely aren't useless to them. They are
functionally what they asked for and work well, and at a
reasonable price too

The mess hinges around the team leader's decision, which I
consider highly irrational and can offer no explanation for, to
dispense with what I made for them just because I wasn't
going to be their manufacturer. The fact that the prototypes
are perfectly presentable to any manufacturer seems to make
no difference. Friends of mine who know the whole situation
think it's absolutely bizarre what this person has done

> And what can we learn from this?  It can be useful for a
> contract to spell out specific non-deliverables and non-goals
> as well as deliverables

Well, everything was spelled out. Unfortunately there's no
accounting or planning for odd behaviour. Although eventually
I might (or should) win out, I'll probably have to wade through
this garbage first

> Intellectual property (such as software, in particular) ought to
> be a separate "line item" from physical devices.

Yes, it has to be. I had planned to raise the matter of IP in more
depth but unfortunately the whole thing went t*** up before
I had a chance

> Completion of the IP phase ought to be a good time to collect
> a good portion of the payment (ie when you demo a working
> model, but before you deliver all of the working prototypes.)

My mistake was that I uttered the words "now you need to take
this to a manufacturer to get more made" before asking for the
previously-presented bill to be settled. I really didn't expect the
reaction I got, mostly because it was such an illogical one and
made no business sense to their team as a whole. The people I'm
negotiating with now are those behind the team, people with
some reputation to protect. I expect them to offer a satisfactory
deal

2005\08\22@065557 by Alan B. Pearce

face picon face
>> I own all the physical materials
>> I own the s/w copyright
>> I own the IP/copyright of the prototype and its novel process
>
>In any case, you may want to keep full documentation of the product,
>including source code. It is possible that these guys may have
>someone reverse engineer your design and do a re-layout and even
>use your code.  Proof that they copied the unpaid for prototype is a
>good lawsuit.

More to the point, get around there quick, and insist on picking up all the
units, along with all documentation, so they cannot reverse engineer them. I
hope you had a Romalpa (sp?) clause in your agreement. (least I think that
is the correct name - where until the bill is paid in its entirety none of
the units supplied belong to the customer).

2005\08\22@101735 by Bob Axtell

face picon face
Exactly correct.

--Bob

Jinx wrote:

{Quote hidden}

--
Note: To protect our network,
attachments must be sent to
attachspamKILLspamengineer.cotse.net .
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2005\08\22@160702 by sdryga

face picon face

First off, check with a lawyer.
My thinking is that you have a contract, which ,ight say in it that IP
belongs to them.  But since they breached the contract by not paying
after delivery of the prototype, you have no obligation to them.  
Sergey

{Original Message removed}

2005\08\23@025229 by Ling SM

picon face
Start your invoicing and informing them nicely the last time and prior
delegating this to professional debt collectors.  They have people 24/7
to make life hard for the other party.  If that is what you want,
spending a bit more should be justifiable.  But if they are already
broke, then....

Don't neglect those interesting things waiting for you to make it happen.

Ling SM

2005\08\23@045000 by Jinx

face picon face

> Start your invoicing and informing them nicely the last time
> and prior delegating this to professional debt collectors

As there's someone on their side "looking into it" (with
pressure for a resolution from yet another party - what a
complicated little web it is) I'll give them a few days, but
as it's all been documented thus far it shouldn't take even
that long. A final demand certainly would liven things up,
and sometimes you get your jollies where you can ;-)

Thanks for all's opinions on the IP, which is what I really
wanted to get clear at the moment

2005\08\23@080549 by olin piclist

face picon face
Jinx wrote:
> As there's someone on their side "looking into it" (with
> pressure for a resolution from yet another party - what a
> complicated little web it is) I'll give them a few days, but
> as it's all been documented thus far it shouldn't take even
> that long. A final demand certainly would liven things up,
> and sometimes you get your jollies where you can ;-)

Sounds like they need a visit from Guido, Vinny, and "lead pipe" Luigi.

*****************************************************************
Embed Inc, embedded system specialists in Littleton Massachusetts
(978) 742-9014, http://www.embedinc.com

2005\08\23@174754 by Jinx

face picon face
> Sounds like they need a visit from Guido, Vinny, and
> "lead pipe" Luigi.

This lot could be sorted out by Mrs Guido. Snr

2005\08\24@084841 by Gerhard Fiedler

picon face
Jinx wrote:

>> Sounds like they need a visit from Guido, Vinny, and "lead pipe" Luigi.
>
> This lot could be sorted out by Mrs Guido. Snr

Sometimes it shows that you're from down under... This would be the 3rd
degree, and you don't want to put that on just a bunch of small time crooks
:)

Gerhard

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