Electronics > PCB/EDA/CAD

Does the customer or design engineer own the designs? Schematics?

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BThompson:
The situation is a self-employed design engineer (1099 independent contractor - listed as "vendor" in company's ledger), who designed advanced/customized PCBs and their firmware and provided the schematics, manuals, firmware, and support to a company that acquired customers, manufactured the boards, sold the boards, and dealt with customers and also helped with technical support.

There is no contract. The engineer and business owner knew each other and the engineer was already designing on his own then they established a relationship decades ago where the design engineer could avoid customers, meetings, etc. and just work at home designing. The company provided nothing materially to the engineer to facilitate his work.

The engineer's invoices to the company were solely based on time invested.

So the engineer still has the design files in his possession. Any insight into the value, if any, of those files and who owns what regarding the schematics? Thanks for any help with this.

Added: Does the company have rights to those design files or are they the designer's property, on his computer, in his house, having never signed a contract granting rights to anyone else?

ataradov:
Only lawyers would be able to answer this. Doing anything IP related without consultation with a lawyer is just stupid and has potential to cause a lot of issues in the future. Not having a contract does not make it any easier.

Even if you don't want to spend the money, some law forum would probably give a more informed answer.

And the lawyers would need more information. It would probably vary by state and in the absence of any other formal documents, it all may hinge on how the invoices were worded.

jpanhalt:
There is no question that only a licensed attorney can give you an answer.  Since you are inthe US, this might be of interest:

Source: https://www.copyright.gov/circs/circ09.pdf

--- Quote ---If a work is made for hire, the employer or other person for whom the work was prepared is the initial owner of the copyright unless both parties involved have signed a written agreement to the contrary.
--- End quote ---

Your situation might be a little different in that you got a 1099 (independent contractor/vendor) rather than a W2; however, I don't think that will change what sounds more like a work for hire.  You also gave all of the design information to the buyer, which might be enough to swing any doubt to a work for hire.

It's redundant to tell you or your friend to get an attorney next time and have everything related to IP in writing.  As for the present matter, the friends should talk and agree how to move forward.  I suspect any lawsuit would be expensive and have a high risk of failure.

nctnico:

--- Quote from: BThompson on August 31, 2022, 01:01:36 am ---The situation is a self-employed design engineer (1099 independent contractor - listed as "vendor" in company's ledger), who designed advanced/customized PCBs and their firmware and provided the schematics, manuals, firmware, and support to a company that acquired customers, manufactured the boards, sold the boards, and dealt with customers and also helped with technical support.

There is no contract. The engineer and business owner knew each other and the engineer was already designing on his own then they established a relationship decades ago where the design engineer could avoid customers, meetings, etc. and just work at home designing. The company provided nothing materially to the engineer to facilitate his work.

The engineer's invoices to the company were solely based on time invested.

So the engineer still has the design files in his possession. Any insight into the value, if any, of those files and who owns what regarding the schematics? Thanks for any help with this.

Added: Does the company have rights to those design files or are they the designer's property, on his computer, in his house, having never signed a contract granting rights to anyone else?

--- End quote ---
When I became full-time self employed I dug deep into this issue to avoid problems. This is how I understand copyright works where it comes to doing contract work:

Who (contractor or customer) owns the copyright depends on the situation. If the contractor works at the customer and receives strict guidance on how to do a job (having a supervisor, being handed detailed specifications, etc), then the copyright is owned by the customer. On the other side, if the contractor works at his own premises, creates the specification and does the job without any further support from the customer, then the copyright belongs to the contractor.

I have found a few lawsuits where a customer has sued a contractor to handover source files for software that the contractor has written especially for the customer. Turns out the contractor owns the copyright.

In my terms & conditions I have added a clause that says the copyright transfers to the customer after I have been paid in full. This has proven to be a very good idea.

From here: consult a lawyer to discuss your specific case. From your text I assume the contractor has fallen ill or died?

SiliconWizard:
While consulting a lawyer was a good tip, I think ntnico gave the two typical cases.

Of course... best tip is: never work without a contract. IP details should be put clearly in the contract.

When contracting work, it's usual to grant all IP rights to the client upon completion. *They* will usually require it. If they don't, they are just stupid.

Now IP stuff can get tricky. In particular, you may want to state clearly (again in a contract) what it is that you'd be allowed to do with the contracted work or parts thereof in future contracts.
For instance, say you wrote an interesting library for this job, and you'd like to be able to reuse it in the future without infringing on your current client's IP. Yeah, tricky. Or maybe you are even using some libraries or blocks that you already had in store *before starting this job* - if you're not careful about what you grant exactly, this client may get the full rights and you may not be able to ever reuse those blocks that you had in store. That may even backfire (if the client was really annoying and things went sour) if you used those blocks with previous clients and suddenly it becomes really unclear who owns what.

Make - things - clear. That will avoid having to pay lawyers ridiculous amounts when it's too late.

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