Verbal Agreement - Ownership of Business Files

[MisterCorpMan]

Jurisdiction

Florida

Hello everyone and thank you for reviewing my situation. It is a bit complicated but I will try to be concise.

Background Info:
I have a verbal agreement with a family member where I receive 50% of sales from a product line from his company. My responsibility to the agreement involves me running production for the entire company, and working to grow the product line I receive a share of. When we started it, the owner instructed me to set up my own company and he pays my company the profit share. Additionally, I get paid on a W-2 from his company an hourly wage on anything I work on that isn't related to said product line.

The Issue:
The product line I am in charge of and receive share of has grown to be bigger than the rest of the company. The other product lines have fallen and I have put in overtime for over 5 years growing mine. The owner wants to add my product line on other platforms where I would not get a share. I would be cut out of this portion of the sales, and my department would still have to do the production for the products. So far I have been able to prevent this from happening, but it seems like it is only a matter of time before the owner changes the deal or pushes me out of the business entirely.

My Question:
I have thousands of artwork files that could allow me to start my own company. This is artwork I drew myself, at home on my personal computer, off the clock, using measurements and pictures that I took myself. I got the measurements and pictures by traveling to over 20 different cities, where I paid for all the expenses myself. I have records of the travel, notebooks full of measurements, and tens of thousands of pictures. There is no patent or copyright on the artwork. However, the company has copies of most of this artwork as well. The product line I am in charge of is based on this artwork I made, but my files are the original files.

So the big question, if I were to make a company using these artwork files, could I be sued by the company? If I were sued, would I be able to fight the case?

I would much rather things go well with the company. I hope it doesn't come to any of this. Just trying to figure out my options.

 

[justblue]

Did you post about this company on another site?

 

[MisterCorpMan]

Did you post about this company on another site?

Hey there justblue. No I did not post anywhere else.

 

[justblue]

Hey there justblue. No I did not post anywhere else.

I was just curious...there is a member on another site with a very similar user name, who is also in Florida.

 

[adjusterjack]

I have thousands of artwork files that could allow me to start my own company. This is artwork I drew myself, at home on my personal computer, off the clock, using measurements and pictures that I took myself. I got the measurements and pictures by traveling to over 20 different cities, where I paid for all the expenses myself. I have records of the travel, notebooks full of measurements, and tens of thousands of pictures.

And you did all that for your relative's product.

There is no patent or copyright on the artwork.

Sure there is. The creator of the artwork has copyright protection to a certain level just not copyright registration.

The problem I see here is that you did the work for your relative's product. That could be construed as a work for hire which means that your relative owns the work and you don't.

I emphasize could be, because there is a question of whether you created the work as an employee of the relative's company. You say you didn't, he says you did, and two lawyers happily redistribute your money into their bank accounts.

could I be sued by the company?

Yes.

If I were sued, would I be able to fight the case?

Yes.

You left out the most important question. Could you win? That, MisterCorpMan is impossible to predict. What I can predict is that, if sued, you could spend tens of thousands on lawyer fees and there is no guarantee of winning.

I suggest that, before you strike out on your own, you consult an intellectual property attorney. The $$ you pay now could save you lots of $$$$$$$$ later.

Your problem illustrates why one should never go into business with anybody without a comprehensive written contract. And that goes double for friends and triple for relatives.

 

[zddoodah]

The first part of your post raises LOTS of questions, but they're not relevant to the questions you asked.

There is no patent or copyright on the artwork.

There's no such thing as a patent on artwork, and I assume you mean that the copyrights on the artwork have not been registered (a copyright exists from the moment a work of authorship is fixed in a tangible medium of expression). It's not possible to determine from your post who owns the copyrights (primarily because of your apparent dual status as employee and contractor).

So the big question, if I were to make a company using these artwork files, could I be sued by the company? If I were sued, would I be able to fight the case?

I'm not sure what "make a company using these artwork files" might mean, but anyone can sue anyone for anything. And yes, if you and/or your company get sued, yes, you can fight. Of course, the ability to sue and ability to defend/fight have no bearing on the chances of success. If you want to split off and compete with your current employer, you would be extremely foolish not to consult with a local attorney first.