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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 89335
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Dear Expert, I developed and managed what could be, arguably,

Customer Question

Dear Expert,

I developed and managed what could be, arguably, considered one of the most successful products of company "X"(I'll call it product “A1” for the purpose of this consultation). Product A1 is a software application that integrated several components of a measurement system and allowed such system to perform necessary functions that it could not perform without said application.

I am fully aware that, when I developed said product, it was for company X and that company X owns all of the rights for said product. It was brought to my attention that, at present time, product A1 does not have the same degree of support as it had when I was managing the project; meanwhile, product A1 is stagnating and becoming obsolete. I have suggested to company X that I can work with them as a consultant/contractor to support project A1. At the time of said suggestion, company X had contracted other, less experienced engineers, to “pick-up where I left off”; however, said engineers are no longer with company X.

I have moved-on with my engineering career and I don't need or depend on company X for subsistence; however, project A1 was (and still is) close to my heart, and I believe that the customers that use it (which I also consider as friends) are not getting the technical support that they deserve. My close friends and loved ones tell me to “let it go” and to “move-on”, and “that it is not worth the aggravations and complications of legal battles”; however, I feel that, it would be for the common good of all involved parties if I take another shot at working with this project.

I am planning on negotiating with company X to acquire the rights of product A1 in order to continue its support and further development. Nevertheless, I believe that I don't have the capital that they could demand for such rights. Another alternative is working for sales royalties, for company X, as a Consultant/Project Developer, but this alternative doesn't guarantee a steady income. From the explained situation, what would you recommend? Thank you for your help and please, don't hesitate to ask if you need more information.

Regards,

Rafael A. Cabrera, EE
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

From what you explained above, you really have few options here as of course Company X clearly owns the rights. You are at the mercy of company X regarding what they allow you to do or not do with the product.

Your first step needs to be negotiating for the rights to A1. Until you engage in such negotiation, you really have no idea what their attitude is towards this product. They may be looking to get out of the product or may want to stop dealing with it and they may make you a better deal. If they do, you can always seek a loan and use the IP rights, which are property rights, as collateral for the loan.

If you cannot make such a deal, the only other alternative is open up as an independent servicer of the product. While you could not sell the product as you do not have the rights to the product, there is no law preventing you from servicing it as you do not need the IP rights to do that. Many independent contractors service protected property, such as MicroSoft products, and that is not illegal unless you have some form of non-compete agreement in force.



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Customer: replied 1 year ago.

Paul,


 


Thank you for your prompt reply and your enlightening information. I particularly appreciate the part where you talk about me becoming an "independent servicer of the product". As a matter of fact, company X allowed me to keep the laptop that I used to develop product A1 for the purpose of supporting product A1 as a Consultant and as an Instructor/Trainer to in-house personnel. However, that agreement only produced one 8hr-consultation (for which I never collected any payments). Also, the laptop that we agreed for me to keep, was loaded with the source code of product A1 and all of the necessary tools to perform service and support of product A1.


 


I very much prefer to service product A1 under company X's sanction. I signed a document that stated that I would not divulge IP information from company X to competing companies for a period of two years, but I did not sign anything that implied that I should not provide technical services for customers of product A1.


 


In a situation where a customer of company X contacts me to perform a service for product A1 that company X could not or would not perform for said customer, and I perform said service and get paid by said customer; could company X sue me or take any form of legal action against me for servicing product A1? Thank you again for your help.



Regards,



Rafael

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response.

As long as you do not divulge the information, as per your agreement, this does not state you cannot work on servicing the product, so you could still be an independent servicer.

You said your agreement does not prohibit you from doing work for customers servicing the product of company X so they could not sue you for doing so as you have no written contract prohibiting that.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 89335
Experience: All corporate law, including non-profits and charitable fraternal organizations.
Law Educator, Esq. and 9 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.

Thanks Paul. I gave you a well deserved expert rating for you help. If you can think of any other reasons of why I should not pursue servicing the IP product that I designed and developed, please let me know. Again, thank you.


 


Regards,


 


Rafael

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you very much.

If company X is not pursuing any real service, I really cannot think of any reason why you should not do so.

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