On Aug 21, 2005, at 5:44 PM, Jinx wrote:
>
> I was approached to make a prototype. In fact, by agreement,
> I made six, which were taken away for sale...

> The persons then said to me "if you aren't going to be our bulk
> or ongoing manufacturer, we don't want your prototypes, and now
> we'll have to pay someone else to make a prototype".

> So now comes the question of IP. My feeling is this -
>
> I had no help developing the novel electronic process of executing
> the function of the prototype. Neither did I have any help writing
> the s/w in the prototype. They have not paid the undisputed bill
>
> I own all the physical materials
> I own the s/w copyright
> I own the IP/copyright of the prototype and its novel process

Yes, I suppose.  Does it do you any good?

I see two basic possibilities.

1) Your customer intends to rip you off.  Who owns what is a
    bit irrelevant in this case.  They have your prototypes,
    perhaps they can copy out and/or reverse-engineer the software
    and "novel process", and you're screwed unless you're prepared
    to pursue legal recourse (which is time consuming and expensive,
    as other people have pointed out.)

But:  "never blame on malice those things that are adequately
explained by incompetence."  (somebody's law, perhaps paraphrased.)

2) Your customer honestly misunderstood what you were able to
    deliver (more likely, someone thought they understood, but now
    their manufacturing person is yelling at them about the
    uselessness of prototypes that aren't from the manufacturer...)
    In this case, you may have room to negotiate on the intellectual
    property involved, and come to an arrangement that gives you at
    least some payment, and the customer some results, making everyone
    (if not happy) somewhat less dissatisfied.  You might have to eat
    the cost of actually building the prototypes, but on the other
    hand you might be able to pick up equivalent $$ by agreeing to
    assist a 'real' manufacturer in coming up to speed on your design.

It need not be an either/or proposition; perhaps your customer has
discovered that your prototypes are useless to them, and they're
using that as an excuse (having seen the novel bits) to try to get
out of the deal...

And what can we learn from this?  It can be useful for a contract
to spell out specific non-deliverables and non-goals as well as
deliverables.   Intellectual property (such as software, in particular)
ought to be a separate "line item" from physical devices.  Completion
of the IP phase ought to be a good time to collect a good portion of
the payment (ie when you demo a working model, but before you deliver
all of the working prototypes.) (isn't that what people suggested in
an earlier "when should I get paid" discussion?  Was that you too?
If so, you should have taken their advice!)

You should act, IMO, as if you believe that a satisfactory compromise
that is acceptable to both sides is actually possible, up until the
LAST possible moment...

BillW
-- 
http://www.piclist.com PIC/SX FAQ & list archive
View/change your membership options at
http://mailman.mit.edu/mailman/listinfo/piclist