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socrateaser
socrateaser, Lawyer
Category: Intellectual Property Law
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If someone did some sub-contract design work for a company

Customer Question

If someone did some sub-contract design work for a company without an agreement in place, and the company took that design work and used it without coming to an agreement with the sub, is there a statute of limitations governing recovery by the sub for taking his work? This is not a contract case as there was no contract. If you could point me towards the right issues to consider that would be great. Thanks!
Submitted: 1 year ago.
Category: Intellectual Property Law
Expert:  socrateaser replied 1 year ago.
Hello,

How did the company come into possession of this design work?

Describe the work (architectural drawings, a device, software, etc.)?

Customer: replied 1 year ago.

I can't go into too much detail due to different confidentiality concerns, but hopefully I can provide enough relevant facts for analysis. Please don't hesitate to let me know if you need additional info or clarifications.


 


Basically in this situation the worker was hoping to get hired with the company, so he did some design work straight out of college in hopes of impressing the company. The company and the worker tossed around several ideas as far as compensation, but nothing was agreed on and no compensation was paid. The worker performed the work and provided it to the company, communication broke down shortly after, and no contract was ever agreed on. The company proceeded to use the design work.


 


The design work consisted of computer models, design prints, and manufacturing specifications for the production of certain types of equipment. For example, the design of a hydraulic shaft for use in farming equipment.


 


Hope that helps.

Expert:  socrateaser replied 1 year ago.
Under the U.S. Copyright Act, the worker could sue for copyright infringement to the extent that any of the drawings, models or manufacturing specs are copied. Unfortunately, proving that copies were made could be difficult or impossible until such time as the product is manufactured and distributed -- at which point the marketing, data sheets, installation instructions, etc., may demonstrate that copies were made, and then a copyright infringement action could be possible.

Alternatively, the worker could sue immediately and ask for a preliminary injunction to prohibit any copies from being made.

If the device is unique and nonobvious (i.e., patentable), and not yet being marketed for sale, then the worker could immediately apply for a patent, and thereby prevent the company from selling the product without paying all profits to the worker. If the device is already being marketed, and thus published, then no patent is possible, which would prevent the use of the patent to protect the worker.

The worker could sue for "quantum meruit," which is the reasonable value of services rendered. This is an arguable point, because the company willa rgue that the worker's time is work at most a few hundred dollars an hour, while the worker will argue that the creation of an entirely new design is worth a small fortune. It would be for a jury to decide. I like the worker's chances here, because a jury would be highly disposed to use an award to send a message to the company. However, the court might "remit" the award, as unreasonable, and only permit hourly fees to the worker.

Those are the basic claims. The patent would be the strongest -- but each has merit.

Hope this helps.
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Experience: Retired (mostly)
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Customer: replied 1 year ago.
Thanks so much. Quick follow up if it's not too much trouble. What is the company took the workers designs and applied for a patent, received a patent, and began manufacturing the product? Also, what if it has been 3 to 5 years since the worker became aware that they were using his work? Thanks.
Expert:  socrateaser replied 1 year ago.
What if the company took the workers designs and applied for a patent, received a patent, and began manufacturing the product?

A: Then, while the worker could challenge the company's patent as invalid, and sue for patent fraud.

Also, what if it has been 3 to 5 years since the worker became aware that they were using his work?

A: A claim of fraud begins to run when the plaintiff knows of or reasonably should have known that the fraud occurred. This is called the "discovery rule." In Oklahoma the statute of limitations expires two years after discovery.

Hope this helps.

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