Sheila Mason and Craig Shepherd Essays

Sheila Mason and Craig Shepherd Essays Sheila Mason and Craig Shepherd Paper Sheila Mason and Craig Shepherd Paper 1. What are the most important issues confronting Sheila Mason? Explain you priority of important issues. The most important issue confronting Sheila is that her previous company, ATS, is claiming she may be in violation of her Employee Noncompetition, Nonsolicitation, Nondisclosure and Development Agreement that she signed when she was hired by the company. The day after she quit she began officially working for her own company, which ATS indicates is in direct competition with its own business. Her agreement with her former employer indicates that she cannot be involved directly or indirectly with another company for a period of one year after leaving ATS that is in competition with ATS. Mason also has another issue with the agreement she signed which states that she cannot, for one year from her termination date of her ATS employment, solicit or do business with any customer of the Company or any potential customer of the Company. So, her first hurdle is going to be to prove that her new business is in no way in competition with ATS. If she succeeds at this, she will then have to ensure that does not speak with any customers that ATS currently holds. This will significantly limit her market for initial sales of the product. Another issue confronting Mason is that she frequently uses her personal laptop for business travel and as such, she syncs her work data with her personal data. ATS, her former company, is now claiming ownership of this data and requesting that she turn it back over to the company. Within this collection of data there is likely revealing information relating to her new venture. This could give ATS all the proof they need in order to charge her with the violation of the agreement she signed with the company. This issue should be her least priority at the moment because if she is careful, she can ensure that no information relating to her new venture is ever transferred to ATS. 2. What are the most important issues confronting Craig Shepherd? Explain your priority of important issues. The most important issue confronting Shepherd is that his current employer, Nova, is claiming all rights to his invention. This was a direct result of Shepherd disclosing information to his boss that revealed his invention. This is by far the most pressing issue for Shepherd because if he is unable to fully protect his invention from his employer, none of the remaining issues even matter. Nova does not develop any type of translation engine themselves, however they are in the business of rewriting applications to run on new systems. This demonstrates to Nova that Shepherd could have used knowledge gained while working at Nova to develop the translation engine. This also brings up the issue of the translation engine he developed being in direct competition with Novas current business. Another issue confronting Shepherd is that the software he created, even though it was development during his own personal time using his own personal machine, it was created while he was currently an employee at Nova. Disclosing this information to his employer gives them enough justification to claim ownership of that software. As agreed by Shepherd when joining Nova, they claim all ownership of any ideas or software that Shepherd generates while he is an employee of the company. 3. What is your evaluation of the non-disclosure agreement (NDA)? Would you sign this as a venture capitalist? Why or why not? The non-disclosure agreement presented by Mason and Shepherd seeks to safe guard their idea, such that the venture capital firm is legally unable to implement Mason and Shepherds idea themselves or disclose the idea to any other parties. The problem with the NDA is that it cannot prevent the idea from being implement by another party. However, if the idea is implemented it by another party after receiving the information, it gives Mason and Shepherd legal precedence to claim that they acted in violation of the NDA itself which will strongly support their case if they must take the other parties to court. As a VC, I would not consider signing the NDA. This would only create unnecessary costs and complexity for the venture capital firm along with the associated potential legal issues that could arise. The VC would need to hire a team of lawyers solely to ensure they are not violating the terms of the NDA. This would also require them to review their entire investment portfolio to ensure that none of the products they current have a stake in are in no way similar to the product that Mason and Shepherd are presenting to the firm. Simply put, this would create undue problems for the VC that would otherwise be nonexistent. Also, from another perspective, presenting the NDA to a VC would cast Mason and Shepherd in a negative light as it would indicate they dont necessarily understand the VC process. This would deter the VCs from investing in the product even without having to sign the nondisclosure agreement due to the friction it created. 4. What actions do you recommend that Mason and Shepherd take to guard against the appropriation of their ideas in the absence of an NDA? Mason and Shepherd should seek to secure a patent that would protect the intellectual property that they have developed so far. Shepherd has already development a working proof of concept, which can be used for filing the patent. While their idea is not patentable itself, the technology they have already created may be patentable. The technology they have already created provides a fairly simple solution to the complex problem of creating the translation engine. If this technology is patented, they will have a significant head start on any competitors that may try to create their own translation engine. The competitors would be deterred from initiating this venture due to the increased complexity of development of the translation engine since they would not be able to used the easier approach that Mason and Shepherd lay claim to. If Mason and Shepherd are unable to secure patent protection for their IP, they should simply proceed as aggressively as possible. Instead of defending themselves upfront, they must take an offensive strategy and bring the product to market as quickly as possible. This aggressive strategy will help ensure they always remain ahead of any competition that may exist. Once they control the initial market, it will be much more difficult for any competitors to try to break into that market. 5. What actions do you recommend that employees take to terminate their employment relationship with current employers? Relating to Mason and Shepherd: Mason and Shepherd should immediately terminate their relationship with their employers. However, at this point in the process, I dont believe that they are equipped with the knowledge and expertise to sever this relationship appropriately while also putting them in the best possible position for protection. They should immediately acquire an attorney experienced in this area of practice to draft their resignation letters and handle all further communication between the parties. Relating to employees in general: Employees should never disclose any knowledge of ideas, intellectual property, or any information relating to something they have developed or will develop to any employee of their company. Any information provided only serves as ammunition to the employer with which they can use to build a case against you and attempt to claim any such property. Employees should also seek to terminate their relationship with their employer as soon as possible. If there is any such suspicion that the employer may attempt to seek claim to property or seek some violation of non-compete by the employee, an attorney should always be involved as mentioned above. This presents complex situations which the employees are unprepared to handle on their own without legal advice.