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Intellectual Property

by jens (Pilgrim)
on Oct 31, 2002 at 00:46 UTC ( #209296=perlmeditation: print w/replies, xml ) Need Help??

I've been offered a contract that includes the clause:

"The Employee wishes to acknowledge that during the course of employment with (company) any discoveries and developments made by the Employee will be owned fully by (company)..."

Does this constitute an IP rights grab? Anyone know any suggested rewordings for this sort of thing?

Update: Well, I complained. The company has come back with this suggested revised text:

"The Employee wishes to acknowledge that during the course of employment with (company) any discoveries and developments made by the Employee related to (company)'s Technology or Products will be owned fully by (company)..."

Does this sound reasonable to you all?

Microsoft delendum est.

Replies are listed 'Best First'.
Re: Intellectual Property
by erikharrison (Deacon) on Oct 31, 2002 at 03:42 UTC

    The second sounds reasonable, but it's not. And, to be honest, your potential employer probably doesn't realize it. What will happen though, is if this get's contested, some fancy pants lawyer will have your hide.

    What your really want is the second, with a thorough and explicitly limited deliniation of what consitutes $company's technology and products.

    I exist under a similar contract, and it has allowed me to do more than a few things that under a more general contract would be owned by my employer.

    Good luck!

    Update: Fixed silly typo


    Light a man a fire, he's warm for a day. Catch a man on fire, and he's warm for the rest of his life. - Terry Pratchet

      What sort of things have you been able to do because of the more specific contract?

      In any event, I can't help but think version 2 is a vast improvement on version 1, and I'm pretty junior, so...
      Also, this is a startup (in Tasmania, of all places) and there's going to be a good bit of R & D going on, so it would be very difficult to actually specify any and all products that they could possibly be making over the course of the next several years. How would you deal with that sort of situation?
      Microsoft delendum est.

        I do tech support. There are a lot of websites out there, some free, some not, which provide services for tech support agents: screen shots, solutions, forums, modem documentation. However, none of them provide wuite what I want, and I'd like to give back to the tech support community(*) what I've learned. So, my goal was to develop a similar website, but more inclusive, and which didn't repeat already existing resources.

        Version 2 is a vast improvement. But it wouldn't let me make my tech support site, because a lawyer could grab any money I might have made from ad sales and the like. But I don't work for the company I do tech support for. I'm a contractor for a call center. At any point I could be transfered to handling credit card phone calls, or telemarketing (blech). If the company puts the work of their clients under the umbrella, I could get severly limited. But my contract specifies that the technology that my employer owns is that technology related to the efficient operation of a call center, limited to phone systems, ticket tracking, and some specific kinds of network software. That's it. So my support site is legit.

        Since you're going into R and D your in a somewhat more precarious boat. But I think a few well placed generalities will protect most home projects you might go into, while at the same time keeping you a good canidate for you employer.

        Also: dws is right on target. The company is being malicious (yet anyway :-). Get all your prior work grandfathered, and be sure that your company is assured that you can't use proprietory information. That should cover things nicely.

        * Yes, there really is such a thing.


        Light a man a fire, he's warm for a day. Catch a man on fire, and he's warm for the rest of his life. - Terry Pratchet

        In that case, join SAGE-AU and ask for advice. SAGE-AU is the Australian branch of SAGE, the System Administrators Guild. But they're not picky - they take programmers too :).

        Someone at SAGE should be able to guide you in the right direction. If you don't want to go down that route, slap down $100 for an initial consultation with a lawyer. We don't run under the same rules as the states - Australia is a more socialist country, with more protections for workers.

        If you are a contractor, you can contact the ACCC or other professional organisations (since you will be in a business transaction). If you are becoming an employee, then you can probably start at the industrial relations department in your state. If that's the wrong department, then they can tell you who to call.

        Check to see if there are any 'awards' or enterprise agreements covering the company you are working for. ____________________
        I didn't believe in evil until I dated it.

Re: Intellectual Property
by true (Pilgrim) on Oct 31, 2002 at 03:35 UTC
    I have this conversation a lot.
    I always pose the client another question.
    "Are you willing to pay every other client i have had a fee for the discoveries i have made while working with perl?"
    Perl is a hammer. If someone builds a house with a hammer, the hammer is not the house. Nails are functions of perl. The nails i sink into your project belong to you, but the swing of the hammer will always be mine. And the nails belong to everybody, thanks to Larry.
    It's like Newton claiming ownership for gravity because he wrote it down first.

    just my 2 cents,
Re: Intellectual Property
by seattlejohn (Deacon) on Oct 31, 2002 at 08:23 UTC
    Reasonable? It all depends how much they are paying you for those rights ;-)

    Joking aside, it's probably a good sign that they are willing to consider your concerns. Still, I'm not sure the proposed rewording goes far enough. What if you make a discovery related to a company technology or product that you have no knowledge about? At the very least, I'd be inclined to ask for clarification of that to read something like "company's technology or products which have been publicly disclosed or of which employee has been made aware". (Otherwise: "You didn't know about Project X, which the CEO dreamt up in his sleep two months ago but hasn't told anybody about? Well, your work is related to Project X, so now it belongs to us. Sorry.")

    Also, the words "related to" are somewhat vague. Does that mean "competitive with", "interoperable with", "based on similar technology", or what?

    Honestly, if you are at all uncomfortable with this, it might be worth your time and money (it won't be that expensive) to ask for advice from an attorney. That doesn't have to become an adversarial thing; you are just trying to make sure that you're understanding and agree with what you sign, and that the company is not doing something that will unreasonably hinder your activities. A lawyer will be in a much better position to tell you whether the contract language is appropriate for your situation and in your jurisdiction and to suggest revisions that will meet the objectives of both you and your employer.

            $perlmonks{seattlejohn} = 'John Clyman';

      It is an adversarial thing. But that doesn't mean the parties can't be civilized about it.

      See an attorney.

      "Wishing to do something" is not "Doing something", that language may be junk. This contract usually would be interpreted in your favor as much as possible. Most US jurisdictions.

      See an attorney.

      I agree with seattlejohn, the contract does not go far enough (in your favor). If this is contract work, I would want the specific technologies you were working on specified in the contract and say that the company would only get discoveries you make based in those technologies.

      You also have to be careful about future developments. It is not unknown for people to find themselves unable to do technical work for years after they do a certain job because of restrictions in the kind of work they can do after working with "private technology". Ensure that if you cannot find a job because you are not allowed to go and work for a competitor after you leave your employment with company X that they will continue to pay you your salary or release you from the terms of the contract.

      Good luck and please don't get your career ruined by signing an overgeneral contract.
Re: Intellectual Property
by gryphon (Abbot) on Oct 31, 2002 at 18:00 UTC

    Greetings jens,

    First of all, such IP contracts are extremely common; too common, if you ask me. What you've got in your post (including the update) are two different contracts. So I'll treat them differently.

    Contract #1 is illegal in some states. It's unenforceable in many more. Here's why: When two parties sign a contract, they are (from the point of view of the law) both agreeing to give up something in exchange for something. If I go buy a car, I give up money and the dealer gives up the car, but I gain the car and the dealer gains the money. In your situation, the company is claiming that part of what they pay you is payment for all your IP you develop while employed with them. Since they pay you a flat rate regardless of hours, you are in the eyes of the law in some states always working for them.

    There's a problem here, though. You're not actually getting paid anything extra (in reality) for giving all your IP to the company. Some states have had cases on this and some judges are getting really smart about it. I live in Washington State where the law has tended to favor the contractor/consultant in the past few years. In Washington State, it's technically legal for companies to give you contracts like contract #1 (just because the legislature hasn't gotten around to making it illegal yet), but case law sides with the employee over the company in suits regarding such contracts. Most companies are either just not aware that they can't enforce such annoying contracts, or they know it and continue the practice in the hopes that they can sucker employees who don't talk to lawyers.

    My advice to anyone presented with a contract like contract #1 is to politely request a revision while reminding the company about your particular state's laws and recent case history. Often, most companies will back down. If they don't, then you have to evaluate the chances of the company taking you to court. Even if you win, going through proceedings is expensive and time consuming.

    Now on to contract #2: This seems much more reasonable to me. In this contract, both parties are realistically giving up something in exchange for something else. The employee will be given access to the company's technology, knowledge base, and trade secrets. The employee is promising not to use that technology or knowledge to develop a discovery or development related to that technology or knowledge and use it outside of the company. Seems fair.

    In fact, it's a little too fair. It favors the employee quite a bit. What happens if you develop a discovery or development while employed, sit on it, then use it outside the company after you leave the company? The way the statement is worded, you'd be legally in the clear. Ethically, I think you'd have some problems, though.

    Honestly, I think you should accept contract #2. The company is willing to back down from an obviously lame original contract. That gives the company some ++ votes in my book.

    code('Perl') || die;

Re: Intellectual Property
by lachoy (Parson) on Oct 31, 2002 at 01:16 UTC

    I had something similar to that -- not quite so far reaching, but close -- on a contract I was about to sign. I asked if they had any problem restricting it to the domain I'd be working on and they said no, so we amended it right there and signed away.

    M-x auto-bs-mode

Re: Intellectual Property
by thraxil (Prior) on Oct 31, 2002 at 01:20 UTC
      Tilly's case is a classic, I guess everybody who's been here for more than a few weeks knows about it. However, I once stumbled across another, very similar case, with one Apple employer, Jens Alfke. Read about it here. Apple scripters know him as the guy who wrote AEGizmos.

      Don't be too trusting.

Re: Intellectual Property
by dws (Chancellor) on Oct 31, 2002 at 18:34 UTC
    The company has come back with this suggested revised text:

    "The Employee wishes to acknowledge that during the course of employment with (company) any discoveries and developments made by the Employee related to (company)'s Technology or Products will be owned fully by (company)..."

    The revised language sounds reasonable, though if there's something you're working on now that relates to the company's technology or products, you should identify it in an attachment to the agreement. This can prevent misunderstandings downstream. And if you plan to continue work on one of these side projects, you'll need an explicit agreement to that effect.

    Looking at this situation from the companies point of view, and assuming for a moment that they're trying to be reasonable, what they're looking to avoid are situations where they reveal proprietary information to an employee, only to have the employee invent something with or related to that technology, and then run off with it to some other company.

Re: Intellectual Property
by grantm (Parson) on Oct 31, 2002 at 07:22 UTC

    Who owns discoveries/developments made in your own time in your own home during the course of your employment? That might be something you'd want to get spelled out.

Re: Intellectual Property
by kshay (Beadle) on Oct 31, 2002 at 22:37 UTC
    Actually, the way those sentences are structured, they could be interpreted to mean that the company will only own the discoveries during the course of employment. So if you want to get your IP back, all you have to do is quit!

    Of course, I don't know whether a misplaced modifier would stand up in court...

Re: Intellectual Property
by Limbic~Region (Chancellor) on Nov 02, 2002 at 06:46 UTC
    Personally, I have never tried to make money off my ideas or my code. Of course it is nice to be recognized, get bonuses, etc (hubris). I have also signed many contracts in the past that similar to the one you describe. I have always ensured that the contract is restrictive to ideas relating to the job at hand, or on company time/money/equipment, or that I will not use ideas in competition with company X. I work in government contracting, and amazingly my most recent employer didn't have such a clause. I believe it is a "big business" way of saving their hide. Make sure you are protected and let the company worry about themselves. Your mind isn't a caged animal - set it free. Limbic~Region
Re: Intellectual Property
by digiryde (Pilgrim) on Nov 03, 2002 at 21:01 UTC

    IP is a sticky issue with most contracts involving creation of a product (especially R&D). My uncle gave me some valuable lessons that I have mostly followed since then(enough money can be an exception ;-)

    First of all, spell out in concrete what is claimable IP. When he was working for RCA he created some very valuable "items". They are quite commonly used today. The items were completely unrelated to his work, but because of his IP contract at the time, he had no rights to them. He renegotiated his contract, and got it spelled out where any value added IP beyond the scope of his current employment was still the company's, but now he was compensated with bonuses (some of them quite nice).

    His next position, he got the contract to read that all IP not directly related to his work was his. The company had to purchase it to own it. Now, he contracts all around the world, using the same type of language in his contracts. He has an office in downtown Boston and travels to 6 to 8 countries per year to consult. All paid for.

    He has told me that he does not think he could have ever achieved the level of independence (and choice) that he has if he had not negotiated the IP clauses the way he did. He got payment for his extra work, but more importantly, he got his name on those pieces of IP, and everyone in that industry now knows him for those pieces of work. They hold international conferences up for him if his plane is late. He says the money was good, but the recognition for what he actually did is what really was important.

    Moral of his story. Get the IP spelled out well. Then work your arse off developing tangential solutions in your spare time. Gain the recognition by getting your name on the solutions you create and insuring that your name will always be there. It is your future that companies steal from you when they "appropriate" your IP. The income is inconsequential in most cases compared to the doors that open when your name is on the ticket.

Re: Intellectual Property
by Anonymous Monk on Nov 02, 2002 at 07:02 UTC
    I sometimes have this conversation...but when i think more i come to the conclusion that i am a programmer not a scientist (i do not invent anything new :-)) ...come to think of it perl is open source ...think what would have been the scenario if larry wall or linus trovalds stuck on to their programs thinking it was their property ;-)) ...again this is my opinion just telling out what i think not saying that what is right and what is wrong ;-))))

      The point is not necessarily whether someone wants to own the rights to his own ideas, but rather that he doesn't want others to own those same rights.

      Larry would probably have been none too happy if $his_employer_at_the_time could have said something like: "Oh well, Larry, that Perl thingy of yours is really cute, we're going to turn it into a product and charge a lot of dollars for it."

      It is rather frustrating when you solve a problem and can't make it public since you might get your company's lawyers after you.

      Just my 2 cents, -gjb-

        Which is pretty much the reason RMS turned into the evangelist he is - he was cut off repeatedly from projects he had contributed to when they permeated from their academic to a commercial environment.

        Makeshifts last the longest.

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