Could I get in trouble with my former employer if I develop similar software for their competitor(s)?

December 26, 2008 6:34 PM

Could I get in trouble with my former employer if I develop similar software for their competitor(s)?

Several years ago I was employed (full-time) by an industrial manufacturing company as a computer programmer. During the 10+ years I worked there, I became something of an expert in writing software that was used by the company's customers (via software distributed on diskettes, then cd-roms, then eventually the internet), to configure the company's products. A few of the company's larger competitors had similar software, but lots of smaller ones didn't. I was the primary designer and developer of the company's software, but upon leaving, I documented everything thoroughly, and gave a full month's notice so that I could train my replacements. I even occasionally answered questions (for free) after I left. I left on good terms.

Flash-forward several years, and after a stint in a completely different field, I'm interested in getting back into software development. I don't want to go back to my former employer - and I hear they are sending most of the development work offshore anyway - but I believe there IS an opportunity to do contract work for some of my former employer's smaller competitors. What I have in mind is writing software similar to that which I did for my old company. I believe that, due to my experience in the field, I could do it much more efficiently than any other random contractor/consultant these other company(s) could find.

My question is this: Could I get into trouble with my former employer if I do this? I wouldn't be reusing ANY source code from my days with them - but of course, I WOULD be using a lot of my own ideas that I had when I worked for them. I remember signing something 18+ years ago, when I first started there, that stated that any "inventions" I created there would be the company's property. (This was, as I recall, supposedly applicable to product engineers who would sometimes get their names on patents for the company's industrial products).

Is that agreement (which I don't have a copy of, and don't want to ask for), enforceable anyway? I'm 100% sure they do not have a patent on the techniques used in the software that I wrote for them. All of the formulas, calculations, etc. that any new software would depend on is in the public domain (i.e., in textbooks). What was unique (or almost unique) was some of the clever techniques in the software to make it efficient.

Thanks!

posted by anonymous to law & government (11 answers total)

Seriously, how could anyone online answer this question accurately? You have an agreement, which you don't have a copy of and won't get one, and you have no idea of what it said other than something about the company owning your work product (while there, after leaving, who knows?).

Ask a lawyer. Seriously.
posted by qwip at 6:47 PM on December 26, 2008 [2 favorites]

I'm reasonably sure that you can't patent an idea, only the expression of it. Of course, what you have knowledge of might be a trade secret, and I have absolutely no idea if this can be enforced etc. My thought is that you'd be fine, provided everything you did was new, but IANAL, and I'm just some dude on the internet.

In short, an hour with a good IP lawyer might be worth the money.
posted by djgh at 6:55 PM on December 26, 2008

You need to talk to the IP lawyer at your current employer right now. If you think you're violating an agreement with a previous employer, your current employer is liable just like you are. This can't be answered here.
posted by saeculorum at 7:00 PM on December 26, 2008

Here's why you should talk to an IP lawyer in more specific terms. There are two possible issues here. Are you possibly violate a non-compete agreement with your previous employer and are you bringing an invention from your previous employer to your prospective employer?

The first is probably easy - I've never seen a non-compete agreement that covers 8 years. However, I don't think there's anything that stops one from existing. This is why you should read what you sign - it most likely is enforceable unless you have de facto evidence otherwise.

The second is harder due to the legal definition of an "invention." Ideas are not necessarily inventions - as djgh notes. However, it's very easy for a idea to become one under patent law - all you have to do is provide one possible "instantiation" of the idea. For instance, I have a patent application for a idea that has a definite physical implementation that has never been constructed or completed. Efficiency techniques can be construed as inventions with a good patent lawyer. Then again, how you provide them to the prospective employer might merely be a "common technique", which is not an invention. Then again again, "novel techniques" are patentable - I'm trying right now for one of those.
posted by saeculorum at 7:07 PM on December 26, 2008

I worked for a law firm that had issues like these passing thru their hands all the time. You have the classic, basic, average question about intellectual property rights here. As others have stated, YOU NEED TO TALK TO A LAWYER.

NOW!

The key issue is dealing w/former employer's COMPETITORS. They don't care about the specifics. They will want to squelch their competitors, period.

The sooner you talk to a lawyer, the better.

Good luck!
posted by Waldo Jeffers at 7:56 PM on December 26, 2008

Woah, this thread is bizarre. Most companies have IP agreements for developers and they don't prevent people from working for other companies with similar products. Those IP agreements only apply to actual IP, which would be either patents or copyrighted code. If they filed patents on some of your work. If then neither you or anyone else could use those ideas in any future software without licensing them (depending on the patentability of software, which isn't all that clear). Software patent lawsuits are huge endeavors and are very rare.

On the other hand, you have copyrights. The literal code that you typed out at your job. That's what most IP agreements are meant to cover. No one wants people typing up code on the job and then selling it.

As far as the ideas and concepts you developed at your job, obviously you can still use those!

The other issue is an actual non-compete. I've never heard of one that lasted 8 years. And if you had signed one, you would probably be aware of it and it's terms.

I'm sure you're fine.
posted by delmoi at 8:34 PM on December 26, 2008

More information would be needed anyway (e.g. what state are you in?). This is another reason why a lawyer is a good idea. If you're that valuable and a competitor wants you, they may fork over the costs for the lawyer consultation (when I hear "lawyer," I think $$).

I live in Ohio, and although every company has you sign a non-compete, it is my understanding that such is not enforceable within my state.

After your absence from the field, I would presume you are safe. Furthermore, I would also believe that the burden of proof would be on your initial employer with respect to your code. Finally, I would also think they would come after the new employer and not you personally - IMHO.
posted by nmabry at 8:44 PM on December 26, 2008

IANAL, but in the US and Canada the onus is on them to enforce any such agreements in so far as they are enforceable - and in your case I would not expect them to be enforceable. As long as you aren't directly reusing any code, you are pretty much in the clear. I have worked with several developers who have essentially re-written the same tools at different companies over the years. IANAL and if you want real legal advice, consult a lawyer.
posted by GuyZero at 8:59 PM on December 26, 2008

I have a mini-career as an expert witness in cases on this exact subject. I think I've testified in seven trials with essentially this fact pattern and honestly can not detect a clear pattern on when the ex-employer prevails and when the ex-employee prevails. The side I testify on has won 6 of 7, which suggests that the better prepared attorneys win. Central questions typically include when there were specific methods and techniques that were trade secrets or what ideas you thought of on company time (this seems to get complex and outside my expertise, but then it seemed to matter if you disclosed it to your employer). I would say that in general, the ex-employees have the upper hand in these cases, but it seems to me that judges and juries have a tenuous grasp on the technical issues (at best).
posted by Lame_username at 9:53 PM on December 26, 2008

I am curious Lame_username - does the length of time between the gigs not affect the outcome? My lay understanding is that jumping directly to a competitor is a good way to get sued but several years after the fact is a pretty long time to enforce a non-compete clause.
posted by GuyZero at 10:56 PM on December 26, 2008

Did you sign a non-compete clause with the first company? If not, then you are probably fine. If you did, you may still be fine as non-competes are not always enforceable (typically they only apply to executives) and most have expiration times of a few years. All this aside, you can always be sued at any time for any reason.
posted by chairface at 11:48 AM on December 27, 2008