Intellectual property and marriage

June 30, 2008 8:04 PM

Intellectual property question. A married couple are both coders who have the same software skills (let's say in coding OCR software). One spouse runs Company A (sole proprietorship, OCR software). The other works for Company B which is now contracting with Company C to work on their OCR code, so that spouse is being required by Company B to sign an NDA (no noncompete) which protects Company C's intellectual property.

Is there a legal basis for there to be a conflict of interest just by merit of a marriage? Or is this kind of thing relatively common? Location is in the US, and this is not in a community property state.

posted by tinkertown to law & government (6 comments total)

So if this is just an idle speculation kind of question, I can give you a pretty straightforward answer: no. This is not an IP question but a contract question and it's possible in almost every jurisdiction to sign an NDA that trumps whatever marital privileges you might think exist (mostly against testifying, etc). In short and in general, you can sign an NDA that prohibits you from talking to your spouse about your work.

If this is something that you need a real legal opinion on, IANYL and this will be jurisdiction specific. There may be odd case history or weird statutes on this point that conflicts with general principles, etc. In short, this is not legal advice, etc.
posted by allen.spaulding at 8:17 PM on June 30, 2008

A) I'm pretty sure the marriage is definitely basis for a conflict of interest.
B) I'm not a lawyer.
C) If this answer actually *matters* - as in, beyond curiosity - get someone who is, instead of random internet people.
posted by Tomorrowful at 8:18 PM on June 30, 2008

An NDA is just a promise not to disclose something. It's not really the sort of thing that's susceptible to conflict of interest concerns. You worry about a conflict of interest when a person X stands in a position of trust with respect to a person Y, but X has reason not to act in Y's best interests.

In your scenario, the spouse who works for Company B isn't in a position of trust with respect to Company C (e.g., a fiduciary or something like it). They're just parties to a contract. Parties to a contract very frequently (always?) have competing interests--hence the contract.

If this doesn't make sense, I might not be understanding the question.
posted by Mr. President Dr. Steve Elvis America at 8:58 PM on June 30, 2008

Just as a datapoint, there are all kinds of military, intelligence, and government workers who cannot discuss their work with their spouses or families.
posted by rhizome at 9:22 PM on June 30, 2008

As another data point, it's possible for me to sign an NDA and work at Company D; then later in my career to move to their competitor Company E, as long as I don't disclose D's trade secrets to E. If one person can work at both D and E without problems, I'm sure two married people could work at D and E as being married is a less conflictish relationship than being the same person.

One of my friends works at a major drug company. People move between compteing drug companies quite often, but are bound by NDAs. This can create strange results. For example, if you spent a million dollars researching a solution to problem X while at company D, then you work at company E and they also want to solve problem X, you can be put in the position where you know the solution but you are not legally/ethically allowed to disclose it. How do you go about discovering something you already know without disclosing your existing knowledge?

However, if you can handle these weird NDA-related situations, I can't see any problem with a husband and wife working for competing companies with NDAs, as long as they can manage not to disclose any proprietary information to one another.
posted by Mike1024 at 1:06 AM on July 1, 2008

[You] can be put in the position where you know the solution but you are not legally/ethically allowed to disclose it. How do you go about discovering something you already know without disclosing your existing knowledge?

IANAL, but I've read up on this area of law as it applies to the Commonwealth. It may be different in the USA. The answer is that you can't, because the test of commercial confidentiality is whether your knowledge served as a "springboard" that accelerated your new employer's discovery. Your former employer will have good commercial reasons to sue your new employer and delay any such discovery, so it's important to keep far away from the new research and avoid giving them any reason to suspect that you may have provided such a springboard.

The problem is, of course, is that it is your fiduciary duty to respect the commercial secrets of both your current and your former employers. This means that you can't tell your new employer that you have conflicting duties, because that will imply that your former employer had a similar project. You can't ask your former employer for permission to tell your new employer about the conflict, because making the request will imply that your new employer has started a similar project. If you have a conflict like this I think it would be your duty to get fired for some unrelated reason, like theft or alcoholism.
posted by Joe in Australia at 2:13 AM on July 1, 2008 [1 favorite]