Open Costing

Well, California is strange but in every state that I've lived in, UI benefits stop the instant you do one minute of work for the week. You don't get UI benefits that week. Zero.

I gather that you've never been a consultant, or that you've never been in a situation where there weren't a lot of people available who could do some highly valuable thing that you needed done.

The way it works is that the consultant brings to your job what he has learned elsewhere, and needs to be able to continue to do that with the stuff he learns on your job. This isn't the same as selling the exact same thing to others, but there is only a limited number of equivalently-good ways to do many things, e.g. a nanoamp photoreceiver or an SSB modulator. If I could only sell those once, I'd starve.

Contracts are all about grown-ups looking after their self-interest, with hopefully some strong guidance from what is fair and reasonable.

Cheers

Phil Hobbs

Well, California is strange but in every state that I've lived in, UI benefits stop the instant you do one minute of work for the week. You don't get UI benefits that week. Zero.

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In Maryland if you earn money during a week they subtract if from your UI payment and give you the difference, so if you earn more than the UI payment you don't get anything from the state that week. Don't know about any other state but that how it works here.

----- Regards, Carl Ijames

Does that make sense to you? I remember social security used to subtract each dollar you earned from your benefit. That was a huge disincentive to work. Now I think there is no penalty at all. You can work and still collect your full SS check.

I can't see why your unemployment benefit should go to zero for making a buck.

I *am* a consultant. I have never had a customer who didn't want ownership of the IP except one who was willing to let me own it so that I could sell the boards commercially and bring the production costs down. In the end that didn't pan out really.

If the design has already been done elsewhere then it can't be owned by someone new unless you sell it to them. All you need to do is to exclude all the things you have done previously. If you need to design something similar for another customer you just design is a bit differently. The other customer owns the design you sold them, not every design you come up with.

Yes, and I don't see why you expect someone who is paying you to design something should not feel like they own that work. Heck, you could turn around and sell the exact same design to their competitor. That is the specific concern of many of my customers.

Yes, at least on a certain level.

You're wrong. If you retire early, that tax is still in place. It goes away if you wait until your "normal" age of retirement. Nothing has changed.

I'm sure but that's the way it is. Not only does it go away if you make a dime but it's terminated and you have to reapply if you have no earnings next week.

allocated

sufficiently

But we'll

ludicrous

Oh wow. I just have to hear how this progresses.

?-)

I am told (but I don't know for sure) that this is a symptom of Six Sigma. I used to work at a Big Name that now calls it that, but when I was there, it didn't have a formal name... it was just "screw the vendors". A guy who had worked there for a long time told me the following story...

Big Name has been buying gears from Spacely Sprockets for 100 years.

Big Name institutes screw-the-vendor, and Spacely plays along for a few years with cost reductions.

Finally, Mr. Spacely says, "Look, we can't build it any cheaper and still meet your quality specs."

Big Name says "OK", and starts buying gears from Cogswell Cogs instead, at the price Big Name wanted to pay.

Field failure rate of new Cogswell gears goes up, causing lots of warranty costs for Big Name.

Big Name sighs and goes back to Spacely.

Spacely says, "We threw away the molds. If you buy us some new molds, we might think about making gears for you again. Maybe."

Matt Roberds

In California, it's called a 'work sharing' program where you encounter reduced work hours plus unemployment benefits to make up part of the loss.

Advantages of Work Sharing a.. Allows employers to retain trained employees until business conditions improve. b.. Enables employers to avoid the expense of recruiting, hiring, and training new employees. c.. Minimizes or eliminates the need for layoffs and accompanying hardships for employees. d.. Can be used to prevent layoffs in almost all types of business or industry. In short, it's a gravy train, just like other government jobs.

--- news://freenews.netfront.net/ - complaints: snipped-for-privacy@netfront.net ---

Can you explain? I don't follow the logic at all. This will simply discourage people from making any money they can. Letting them keep some of their wages would actually be a boost to everyone. They get more money in their pockets, we pay less in unemployment.. but then "we" aren't paying unemployment for the most part, it is an insurance system paid for by the employers.

That is what has changed. Now if you work after full retirement your benefit is not reduced. It was before even if you didn't retire early. "Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings."

I remember people talking about how they would like to work some, but there was no point since they just lost all that income from their SS benefits.

I guess in your state. Other places are more rational.

Why is it a gravy train? Unemployment is largely paid for by the employers. I know, I have had to pay all this.

Because the expertise behind it took 30 years to build, for one thing, and for another, it involves a bunch of IP that they didn't pay for. If you spent a couple of years doing research, would you feel that somebody who paid you to spend a day explaining it to them ought to own it outright?

Thought not.

I'm in business to help my customers succeed, not to screw them, whatever the contract may say. If a customer paid for the development of some gizmo, I'd never sell the same thing to their competitor. There's an art to writing contracts with people who have much more money than you, though--stuff like the ownership of general design approaches and component choices has to be crystal clear, or you can get sued down to your socks.

Cheers

Phil Hobbs

I think I already said that the parts you have designed previously can be documented and excluded from the contract. Do you not understand that?

I have no idea why you feel the need to be rude.

Yep, I think that is what I had already said. Maybe you should calm down a bit.

More-or-less exactly this principle was recognised by an Australian High Court ruling a decade or so back, so is now (unbeknownst to most writers and signers of employment contract IP clauses) our common law. That means that in some cases, the entire IP clause can be struck out as invalid.

Sorry I can't point to the exact case, it was a software thing though, relevant to me at one time. Wasn't just consultants either.

Back in the days when Dave and Bill were at HP, circa '79; we were told three things on how to work with HP's vendors:

1. NEVER, EVER 'chinese bid' a cost for parts. Which meant get a bid, go to other vendor and say we can get it for ??, then getting a lower bid go back to the original vendor and tell them so-and-so can make if for less, don't you want rethink your bid, when they do and give you a lower price, go back to the second vendor and so on, back and forth. We were told: give a vendor the specs, tell them what quality you want, let them bid, one shot only. then select vendor based upon samples testing, prices, etc,
2. ALWAYS, ALWAYS give your vendor enough margin to pay for their growth, too. I actually saw an Engineer tell the vendor that the bid was too low, rethink it because. In other words, told the vendor to not make the price so low just because you want our business, the Engineer said he NEEDED the part and wanted the vendor to be there next week and they wouldn't be if they lost money on selling to HP. The concept was that as HP grows and needs more, you want your vendors there for you growing along side you.
3. Split your purchase contracts. Spread your purhases out among vendors, NEVER put all you eggs in one basket. You never know if one of these vendors will dissappear, plus, there's a more natural competition between them keeping the prices down without killing them. Thus, I bought from one vendor an item for today's dollars at ,000 and from another vendor, ,000 - a wide disparity, but kept both vendors alive until they learned how to make it and the performance/quality skyrocketed and the price was down to around 00...from both. and the cotract was still split.

I'd say - learn to be a passive beneficiary. Sure, thy want conrol, but make them pay for it. The 10% profit has been a staple of DOD/DOE contracts for 80 years.

Your comment on cost-plus relevant. Just make sure you are working on a "best efforts" basis, in writing. No result g'teed.

And of course, your salary. What is it? What is the OH including benefits? You can query them on their accepted numbers. For example, 130 K$/yr. and 200% OH. That's $390 K$ for you and you can magnanimously peg your profit at 8%.

Present this with a straight face. Don't forget: They have accepted numbers up their sleeve. I imagine their OH is at least 200% on direct labor.

Jeeze - I got my car fixed, and the direct was 160 K$ for the mechanic. The OH is hidden in there, along with a big markup on parts.

Just play their game and float the numbers above.

Oh, and you can present the "great value of the IP you are losing." In reality, the IP is not worth shit.

That depends. It's not at all uncommon to invent some pretty general technique while engaged on a specific problem. When that happens, if the client owns all the IP, your alternatives are to get screwed, make an inferior product that doesn't embody the invention, or lie. All of which are Not OK.

I much prefer to write contracts that don't put me in that spot. In general the customer is fine with a promise not to sell the exact same design elsewhere (which I wouldn't do anyway) and an irrevocable nonexclusive license to any of my IP embodied in the design. Generally there's lots of daylight between strict work-for-hire and any bad thing the customer actually cares about, so when mutual understanding is achieved, writing a good contract is fairly simple. (Except when some legal or business development droid is expecting a big bonus for making water in the soup.)

Cheers

Phil Hobbs

yes, some IP might be valuable, but 99% of the time it's not. The reality is that making money from inventions ("IP") takes a lot more than sitting back and receiving a check in the mail, as I'm sure you know.

And - sure, write it into your contract, but in an ego contest, I would take the cash and give ground on the IP. Is Poker lying?

And to make things confusing, it's even complex to know exactly what the "IP" is. Has an exhaustive patent search been done? Has the current state-of-the-art been searched?

And regarding the nature of the IP itself, is it really a unique break-through without any "wiggle room" for other patents?

To be frank, I was reacting to the OP's approach to the potential customer. I suppose he could argue for 1% of the sales earnings in the future, but I assume the reason they are funding it is they see some promise in it. But you have ask yourself, are you going to get VC $$, assemble a management and engineering team, put the 12 hour days into being a success, spend the 5 years taking a risk, etc? VC's usually have an "exit strategy."

And yet another dimension is the overall business deal, eg, "Can the funding company really make a profit on this IP?" Is the market really ready for it?