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TexLaw, Other
Category: California Employment Law
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Experience:  Experienced in divorce litigation and property division settlements
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My question is, how does the law apply to an employee in California

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My question is, how does the law apply to an employee in California for their use of knowledge and creativity from one company to a competitor? I have changed companies within the same industry in the last year or so and held the position of VP Sales and Marketing at both. I had created proposal templates and marketing materials at the first company and have begun creating new pieces at my new company. My previous company recently contacted me letting me know that they wanted me to cease using a format of a proposal that was theirs. It was created by me at the previous company and while the new format is not exact, being that it is still me creating it, my thought pattern for the format is going to be similar. What would the law instruct?

Thank you for your question. I'd like to first commend you on the fact that you are consulting an attorney regarding this matter and not simply ignoring it.

The law provides that a business has an intellectual property claim for creative material created by its employees as a work for hire. This means that while you were working for your previous employee, the creative work you were performing was for hire by the company and thus the creation belongs to the company under US copyright laws.

If an employee creates a work within the scope of his or her employment, then the work is considered to be a “work for hire” and is owned by the employer, by operation of law. Still, the more cautious business owners will have their employees sign employment agreements that transfer ownership of works, ideas, inventions, and other items conceived in connection with their employment with the employer. Copyright law only protects the expression of an idea or concept, in a tangible form, and does not protect the idea itself. Because many employees often work from home or off-site, and at odd hours, it can be unclear if a concept or idea conceived by an employee was in the course of his or her employment.

The toymaker Mattel, Inc., maker of the Barbie dolls, faced this situation recently in a highly publicized case involving the competing Bratz dolls made by MGA Entertainment. A former employee of Mattel had conceived the idea of the Bratz dolls while still employed by Mattel, and claimed to have conceived this idea outside of work hours. When that employee move to MGA and the Bratz dolls became a hit, Mattel sued for infringement, among other claims. Although the employee had signed an employment agreement with Mattel in 1999 in which he agreed to assign all “inventions” he conceived during his employment to Mattel, and “inventions” included “discoveries, improvements, processes, developments, designs, know how, and data computer programs,” an appellate court found that he had not agreed to assign “ideas” to Mattel, even if work-related, and denied Mattel’s claim of ownership.

The new format you are using which is similar in pattern to the old one you used at your old employer would be considered a derivative work. A derivative work is also owned by the copyright owner, in this case the old employer.

As that is the case, your proposal templates and marketing material needs to be sufficiently different from the old work so that one can reasonable determine that it is a separate and new creative work.

Please let me know if you need further explanation.

Best Regards,
Customer: replied 4 years ago.

So in the future, am I not allowed to create marketing within our industry that might be similar to things I had done in the past? There just are only so many ways to create templates and formats? At one point, are my new ideas unique to the current time frame?

The copyright claim can only extend so far, and it turns entirely on reasonability. In other words, the old employer can only own the portions of your work that are copyrightable. There may be certain aspects of your templates which are not in fact copyrightable and thus your old employer would not have a claim to that.

If there are portions of the old template which are not copyrightable (i.e., works of such originality that have never existed before). So if there are items on your old template which are similar to aspects of other templates from other companies, this portion of the template is probably not copyrightable. You can use these portions and put your new ideas on them.

Of course, there is no bright line rule on this issue. If it became an issue which was litigated, it would become a question of fact that goes to a jury as to whether your new work is a copy or derivative of the old work.
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