Contingent Engineers and
Intellectual Property Protection
How engineering managers today can leverage contract
engineers to promote innovation, while still protecting their
confidential product or process information
kellyservices.us/engineering
What’s driving your
need for contingent
engineering talent?
In a survey featuring insight
from 13,000+ engineering
professionals about their
workforce attitudes and
motivators, Kelly® found that:
70% of engineering professionals
feel engaged or committed to their
current employer
Regardless, 69% plan to look
for a new job in the next year,
with considerable turnover
expected in the Americas
region (73%) and in the global
management ranks (72%)
26% of senior executives and
25% of middle managers say
“poor management” is the top
factor that will cause them to
leave their organizations
“Many of the largest and most
famous manufacturers in the
world use contingent engineers in
a variety of roles, including many
that involve the engineers in
highly sensitive and confidential
research and development work.”
IP considerations and contingent engineers
Engineering managers are sometimes reluctant to bring in contingent engineers or contractors,
due to concerns about intellectual property or confidentiality of proprietary information. However,
if a sensitive project or program requires supplementing your full-time engineering staff with
contractors due to workload, scheduling, or a number of other factors—what can be done?
“Concerns about intellectual
property and trade secrets
when utilizing supplemental
engineering workers are valid,
but manageable, and can yield
highly successful and protected
technical work for companies.”
Of course, intellectual property considerations are really a two-way street. On one hand, as an
engineering manager, you have a fiduciary responsibility to protect confidential product and process
information, which you do not want walking out the door with a contractor (or, for that matter, any
employee who leaves). On the other hand, bringing in new engineering contractors with the right
kind of talent and experience can greatly contribute to the intellectual property of your company.
One case in point
Consider the case of an engineering manager at a commercial bakery that produces a variety of
breads, rolls, and other baked goods on an industrial scale. They were in the process of adding a
new line, and working on a project to revise the layout of their existing processing equipment to
accommodate the installation of the new machinery. To assist in the project, they had augmented
their staff with a manufacturing engineer contractor. This manufacturing engineer applied a
process design concept to speed the cooling of their baked products that he had first used in
a composite lamination curing process, for a completely unrelated industry. The result was an
innovation in the bakery that had the potential to dramatically improve the productivity of the line,
while also improving space utilization within the plant.
• Training staff and contingent workers in the protection of confidential information
• Keeping hard copy files and reports in locked, controlled access cabinets
• R
estricting the use of mobile phones with cameras or the use of physical means (such as
drapes, walls, and fences) to prevent visual observation of confidential processes
For electronic files, many organizations protect sensitive data with variable access passwords,
access logs, by prohibiting or restricting the use of flash drives, and eliminating or controlling
remote access.
Of course, these are good ideas whether or not contingent engineers or contractors are used. It
can prove challenging to recover client-owned mobile devices issued to contingent workers, so
restricting the provision of these devices to contractors in certain roles and locations (as well as not
allowing them to possess their own devices on-site) can provide additional means of protecting IP.
Information compartmentalization is often used to protect trade secrets. For example, The
Coca-Cola Company and Kentucky Fried Chicken® are two famous examples of companies
that keep their recipes and formulas compartmentalized. Purportedly, there are only a few
senior managers at each company who know the entire formula for Coca-Cola®, or the entire
“11 herbs and spices” recipe for Kentucky Fried Chicken. This compartmentalization applies
to employees and contingent workers alike.
Consider all available security resources
Confidentiality and non-disclosure agreements are typically used by companies when
assigning staff employees to research and development or process engineering work involving
access to trade secret information. These agreements can be signed with contingent workers
as well, of course, and they are just as valid and enforceable with contractors as they are with
staff employees. When the contractor is supplied by an agency or outside company, as the
employer of record, they may also need to be added as third parties to these agreements.
Steps toward protecting your intellectual property
It’s not uncommon for contingent engineers and contractors to play key roles in the invention
and development of new products or processes. In fact, one of the benefits of using contract
engineers is that they can provide a fresh look from the outside at a technical problem. Just
remember, if patent protection will be sought, the actual inventors must be named on the U.S.
patent application—including contingent engineers, if they play a significant or principal role in
the invention of a patented product or technology. In fact, an issued patent may be voided if their
names are not among those listed on the application.
When using an engineering staffing vendor or project services firm, it is also prudent to
consider their internal security resources. While small firms and self-employed consultants
may offer no capabilities in this area, large firms may have substantial security resources that
can assist in efforts to protect or recover sensitive information, data files, and documents. For
example, Kelly has a professional security department led by former federal law enforcement
agents and investigators. Establishing a partnership up-front between client and vendor
security teams can be critical, so that these security specialists are not brought in after the
fact—when recovery of data is more challenging.
One way to ensure your intellectual property is retained when using contingent engineers is
to designate their work product as “work made for hire” in the related service agreement. In
addition, agreement to assign patent rights can be documented at the start of engagements by
including appropriate language in the service agreement with the vendor, as well as directly with
the contingent engineers.
Having a robust policy and attitude toward enforcing a suspected violation of a protective
covenant is also important. This involves a proactive partnership between the business,
security, and legal departments of the client and vendor alike. Having a process in place and
preventing ad hoc attempts at data and hardware retrieval is important, and affords the best
opportunity to be successful in protecting IP.
Trade secrets
Conclusion
Engineering managers are right to be mindful of intellectual property and trade secrets when
utilizing supplemental engineering workers. However, these concerns are manageable and
can yield highly successful and protected technical work for companies. Many of the largest
and most famous manufacturers in the world use contingent engineers in a variety of roles,
including many that involve the engineers in highly sensitive and confidential research and
development work. The experience of these companies has shown that concerns can be
effectively managed to ensure that intellectual property is properly protected.
In order to protect a trade secret and have it be considered a trade secret, companies need to: (1)
identify trade secrets as such and let workers (employees as well as contingent workers alike) know
what information is to be kept confidential, and (2) take measures to protect the confidentiality of
the trade secret. This can mean, for example:
• L abeling reports and other documents containing sensitive information as “CONFIDENTIAL:
FOR COMPANY USE ONLY”
2 2
3
For more information, please contact:
Joe Lampinen
Director, Engineering Center of Excellence
Kelly Services, Inc.
847.255.0243
[email protected]
TBD
Business Development Director
Engineering
123.456.7890
[email protected]
TBD
Business Development Representative
Engineering
123.456.7890
[email protected]
About Kelly Services
®
Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a leader in providing workforce solutions. Kelly offers a comprehensive array of outsourcing
and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. Serving clients around the
globe, Kelly provided employment to approximately 540,000 employees in 2013. Revenue in 2013 was $5.4 billion. Visit kellyservices.com
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Since employing its first engineer in 1965, the Kelly engineering specialty has grown to be recognized as a leading provider of engineering
resources to customers in such industries as automotive, chemical, defense, electronics, energy, medical device, and pharmaceutical. Want
more information?
Visit kellyservices.us/engineering today.
DISCLAIMER: The information discussed in this article is not intended to constitute or replace
professional legal advice. The reader is advised to consult with a qualified intellectual property
attorney to obtain legal advice related to the topic.
Kelly Engineering Resources® is a registered trademark of Kelly Services
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