Tools of the trade, software implications
<p>My understanding of the general legal principle of "tools of the trade" is that tools which are necessary for the exercise of a profession are the inviolate property of the tradesman and cannot be taken away from him either by bankruptcy or by employer or by the state or by anyone else. A tradesman has absolute ownership over tools necessary to conduct his trade.</p>

<p>For example, imagine a machinist makes a clamp at his workplace. Even if he uses company materials and time to make the clamp, the machinist still owns the clamp, because it is a generic tool, not a workpiece. If he leaves and goes to work for a different company he can take the clamp with him and he owns it forever. That is my interpretation of the "tools of the trade" principle. This would not apply to a special tool only usable at a particular employer. For example, if the tool would only work on one employers specific machine, then it is not a "tool of the trade", because it is not generic.</p>

<p>My question is whether this principle applies to software as well. For example, lets imagine a programmer writes a sorting algorithm. Such an algorithm is generic and can be used at any employer. Does the programmer have the right to retain and use that sorting algorithm while working for other employers because it is a "tool of the trade"?</p>

<p>Your framing of the issue is basically wrong. There is an exemption, which varies from state to state, from unsecured creditors (but not creditors that take the goods as collateral) in bankruptcy and in debt collection outside of bankruptcy (not always the same exemption), for tangible personal property owned by the debtor which constitutes the debtor's tools of the trade, but that varies from state to state, is a creature of state statute (and the bankruptcy code), is not universal, and is usually limited in dollar amount.</p>

<p>Moreover, the exemption only applies when the tradesman actually owns the tools of his trade which is customary in some professions, but not automatic. It is only the case when the tradesman buys his own tools. There is no generic v. non-generic distinction.</p>

<p>In the software field, education and the public domain can always be accessed. But, intellectual property, that can be protected, that is developed for the employer, is usually work for hire and belong to the employer. This default rule is subject to the terms of the agreements between the parties entered into contractually.</p>

<p>AFAIK, If you are under contract (NDA &amp; Non-Compete) and the non-compete usually includes verbiage that says anything you built while on company time, belongs to the company. Some contracts even go as far as saying that anything of IP that you build while employed by the company would belong to them as well, whether company time or not. </p>

<p>So that "sorting algorithm" example you gave would belong to the company. </p>

intellectual-property employment