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    Hi, its been a while since I posted or even checked out the forums, forgot how much good info was floating around.

    My issue is this. My business manufactures a product for one particular client, they came to us with their idea and we developed it for them, not charging for the design time as we were verbally in agreement that we would be the sole manufacturers. In 2014 the product went Australia wide, we were pumping out orders every month, put on more staff to cover the demand. However February 2015 was the last order we received. Recently I made contact with the client, which they only communicated by text message and said that they wanted to send us orders again, but got the distinct impression that we didn’t want to make their product anymore.

    I’ve been approached by other potential clients to make the same or similar item in the past and always said no, due to my verbal agreement with the first client. Now it seems my loyalty has meant nothing, it looks very likely they’ve gone to a new manufacturer, as its been 6 months since they last ordered from me.

    Sorry to be so long winded, but I’m wondering where I stand as the manufacturer who designed it? They have no Patent, only a Trademark. Can I start making this same product for other customers? Do they have any legal standing to sue me?

    Thanks in advance.


    Jason Ramage
    • Total posts: 3,161

    Verbal should = gospel…

    Let me clarify something, you have already moved by the moral aspect of this equation and purely only want to know your legal standing?

    Personally, even though it was verbal, maybe this will encourage you in the future to always have something signed.. Even if you are not charging, maybe have something in writing that whatever you ‘design’ it remains your intellectual property to do with you decide.

    Does the design incorporate the trademark? namesake, awareness etc.. To me it sounds like you know the answer already although are seeking a round about way to continue producing item for other people..

    Also, if you are merely doing a ‘similar’ design… maybe the variation in the product is enough to be treated as a different item.. Although without specifics its near impossible to get an answer from a forum like this.. Maybe seek independent legal advice?

    Good luck

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    • Total posts: 318

    As well as your thoughts on ethics and integrity, a verbal agreement is still a legal contract in the UK. It’s not easy to prove but it is. Unfortunately, I’m not sure here. I would seek legal advice.

    Before going to that expense, you could tell the other customer openly and assertively about your plans. See how they react. Another possible legality is that when you make your wishes known to someone, they are supposed to reply. A none reply in some countries, within a reasonable amount of time and where reasonable steps have been taken to communicate, is taken to be an agreement to your proposal.

    This way, they might start buying again to keep you sweet or threaten action. At least you’ve forced their hand, because sooner or later, they would presumably find out anyway. You would have this hanging over you, which some people find stressful.

    Another option is to produce something similar if you can afford retooling. People do this around patents and these people haven’t even got a patent. Make something better.

    Think also about what you promised. Maybe you only promised to produce them? If you never promised them exclusivity or confidentiality, are you breaking any promises? And what did they promise? Did they promise to buy from you for so many years and then broke their promise? Or did they informally ask for you to produce it?

    • Total posts: 2,344

    Hi Te,

    Without specifics it can be tricky to advise. If you’d like to send me a PM (in confidence) with some further information, am happy to review and see whether it’s something I can assist with.

    I understand from your original post that there was a verbal agreement that you would be the exclusive manufacturer. As Paul has questioned – what else was verbally discussed/promised between you?

    An “idea” itself is not generally a protectable piece of IP; it’s more the ways in which an idea is communicated that become protectable (or may have once been protectable) – such as Copyright, Designs, Patents, Trademarks etc.

    If they (or you) have not protected the product already in terms of design or function via designs/patents route, then that may not be the issue at hand, and I would suspect then it will come back to the ‘agreement’ between you.

    When they approached you originally with the idea, and you developed the product – did you provide them with any agreement or terms & conditions (in writing) for you to take on their product? I know the exclusive manufacturing was verbal, but was anything else in writing that may discuss who owns what?

    The above is food for thought and not legal advice. Each case is different, and certainly more detailed information about past discussions/agreements/written communication would be necessary in order to obtain legal advice on your position.

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