Excel Spreadsheet IP

[pdavison57]

I acted as a consultant for a company, where I was creating excel spreadsheet solutions for retail users. I signed a two year contract that at the end of it I would get 50% of the net profit from the sales the company achieved from my solutions over the two year contract period and at the end of the contract they would own the IP for the solutions. Due to personal circumstances I ended the contract at the end of year 1 (this was allowed in the contract), however I received no money for the solutions. The company stated that after their internal expenses against the products they were in a loss position. Whilst I fought this in emails, the end result was still no money. Eventually I reluctantly accepted that. What I want to know now is where I stand regarding the solutions I created and how much of the content/look of them is in the IP. I have a copy of the contract and an NDA both signed by me plus email communications. In a nutshell they are saying I cannot work with or poach their clients, which is fine. I cannot use any of the three solutions I created with the company with any other third party. I am in agreement with both of these statements. However, since the termination of the contract I have created brand new solutions for all three areas (because they are used universally in retail), these new solutions use slightly different formulas and algorithms, although some formulas which could be judged as mathematical formulas are the same. These new solutions are now designed to be used only as a consultancy with future clients and at present will only be used by me, they do a combination of additional/different functions although some of the functions are the same because they could be termed as functions a number of companies would create and use. What I really am struggling to understand is - If the new excel solutions I have created, can be judged as not breaking any agreements even though selected parts of the functions may both look the same and create a similar result, albeit the results will always be different due to the imported data used by the clients. I'm hoping this website is the right place for the detail above and how I move forward without breaking any IP agreements. I look forward to hearing from you.

[AndyJ]

Hi pdavison and welcome to the forum.

First of all I'm pleased that your original contract included a clause or clauses about what should happen to the intellectual property you created. Without such a clause, it is quite likely the company might been able to claim the IP outright under section 11(2) of the Copyright Designs and Patents Act 1988, due the length and nature of your consultancy being synonymous with full time employment.

Anyway, turning to the main point you raise in your posting, the key issue here is what is known as the idea/expression dichotomy. If your new solutions do not infringe the copyright in the solutions which you provided for the company then the company probably cannot invoke the non-compete part of the agreement, as that would amount to restraint of trade. The hard part is deciding whether your new solutions do or do not infringe. If the matter went to court, both sides would appoint experts to evaluate the two products and advise the court, and the lawyers would take something of a back seat, other than to quote copious previous cases on the issue, which I will refrain from doing here.

If you feel sure that your new solutions tackle a particular client requirement in a substantially different way to the solutions created under the contract then I don't think you have anything to worry about. Although software is treated as if it is literature for copyright purposes, the analogy soon breaks down. In literature there are usually countless ways of rephrasing a particular concept, but with software, and especially a routine that has to operate with other software through APIs or other standards, there is much less opportunity to vary the structure of the software. The IP courts are well aware of this contraint and take it into account when reaching their decision. In the real world it often comes down to the look and feel of the user interface the coder or programmer provides (take for example Microsoft Word and LibreOffice, or Visicalc and Excel).

While saying that you probably don't have anything to worry about, we do need to bear in mind that the initial reaction to your new solutions will come from the company's own staff, who are probably not legally trained. They may jump to the conclusion that since your new product does much the same as the product you created for them, it 'has to be a copy'. They may then fire up their lawyers who are likely to issue a cease and desist letter or worse, with no understanding of the actual structure of the two underlying software solutions. They will do this because that is in the best interests of their client, not because it is a legally sound claim. In that scenario the whole matter could head towards the courts before common sense prevails. If you feel that the company are sufficiently IT savvy to understand that your new solutions are radically different to the way the old solutions worked, then you may be able to nip things in the bud before things get serious and expensive. However at the first sign of trouble you should consult your own lawyer with IP experience. You can find such a person via the Law Socirety's website and selecting Media, IT and Intellectual Property from the 'your issue' dropdown box.

Good luck with your venture.