March 6, 2024 at 3:51 am

Company Tried To Get A Worker To Turn Over His Patents. After He Was Fired For Refusing, He Sold Them to a Competitor And Crushed Their Business

by Matthew Gilligan

Patent holders have the whole world in their hands…

So it’s in your best interest not to mess with them!

But some folks need to learn the hard way.

Take a look at this story from Reddit, we think you’ll be very satisfied!

Don’t fire the guy who holds the patents.

“This is my father’s story.

My father had a degree in mechanical engineering. Either a masters, or doctorate. It had taken him years to get, and he was very proud of that.

Thanks to his training, he had found his way working for many well known companies; working primarily with the procedures used to make various things.

This guy was SMART.

Over time, he’d privately began working on an idea that would revolutionize how school and gym lockers worked. See, my father realized that there was a problem with those type of metal lockers. Namely, it was very easy for a person to break into them.

What’s more, as the lockers were designed, there were multiple moving exposed moving parts, which meant that if a student put too many books in one, or really anything got against the door, the locker could be jammed shut, making it near on impossible to open.

So, for several years, dad toyed with a number of ideas, before hitting on a new design which would solve all those problems. The inner workings of the locker’s locking mechanism would be contained within the door in such a way that one, it was impossible for someone to “shim” or break into, two, the entire mechanism would be enclosed, and three, it was relatively maintenance free.

Now, at this point, my father was the Vice President of manufacturing, and apparently there wasn’t a clause in his contract that said that if he designed anything while working for the company; then he had to turn that over to them for profit.

Dad still approached the company, offering them the design, but they weren’t interested. Dad sat on the design for a while before eventually just taking out several patents on them, and then forgetting about them.

About six months after his first attempt at getting the company interested, the parent company’s owner/chairman of the board passed away, and the board opted to sell off some of the holdings. The company my dad worked for was part of that.

Some new guys came on the scene…

The new owners were young guys who seemed to think they knew everything (as young business owners always seem to think), and they set about changing 99% of the way things were being done. At some point, they stumbled across the plans my father had designed.

Now that’s where things turned curious. They really wanted to start producing this new design, but as they didn’t have all the plans and processes laid out for them, they had to turn to my father for answers. Rather than asking him how to do it, or licensing the patents (as any reputable company would have done) they ordered him to turn over all his work; or else they would fire him.

Dad stood his ground and refused. The new owners and my father went back and forth, arguing over details for several weeks, before finally the new owners fired my father for insubordination.

So, on to the revenge.

So, after cleaning out his office, and packing things in the trunk of his car; my father headed home and made a few phone calls. He must have gone through eight or nine different calls before he got in touch with someone who was interested in what he had to say.

Their dad had a plan.

See, my dad was under no illusions that the company that had fired him wasn’t going to just make those patented lockers on their own. He also knew that though the company itself was relatively small, the owners had money and there was no way he could fight them.

However, a larger company could. So he contacted the major competitors and made them an offer. He eventually set up a meeting with some people, wheeled out the prototype he’d made, explained how everything worked and noted that with this system the company could revolutionize the way lockers were both designed, and improve both safety and security.

What’s more, as he was the only patent holder, for the next seven years or so, that company could be the only company to produce them.

Sold!

The competitor jumped at the chance and bought all patents both for the design, and the process. They even paid my dad a substantial consultancy fee to go out to their manufacturing site and teach their crews how to make the needed tool and die sets to produce them.

Less than six months after the first company had fired him, their number one competitor was completely destroying them in the market with this new design… and there wasn’t a thing the first company could do about it.

They did try suing my father, claiming he had stolen their intellectual property, but that case quickly evaporated when they had to admit under oath that they’d never actually signed a contract with him; and there was no requirement that he turn over anything he created to the company.

In the seven years from when the second company bought the locker design and process patents, they pretty handily moved into markets that previously they’d been unable to.

Well, that worked out…for some people…

The first company soldiered on, but by the time the patent had finally expired, they were a shadow of their former selves.

The “new” owners had sold the company at a loss, with the competitor buying it, only to shut that production facility down due to redundancy.

Put maybe 200 people out of work, though given how they’d lost so much business, I wager that it was far less than that.

So yeah, the new guys don’t want to play ball, threaten the guy that holds the patents on something they want to do, and then fire him, only to have him take everything to their competitor and effectively put them out of business.”

Check out what folks said about this on Reddit.

This person wanted to be fair…