Screwed Over IP Rights By Your Employer?

VirtualUK asks: "Prior to joining my company, that I've been working with for over a year now, I signed an 'Inventions & IP Rights' contract. That contract stated that the work that I had been carrying out off (and was planning to continue with) of my own back, and in my own time and was my own. At the time the work I was carrying out for the new company and my projects at home were completely separate, however I could see that the company was heading in the area I was working on. Wanting to ensure that everything was kept honest, I reminded them of the work that I am doing and wanted to ensure them that I was not stealing anything from them. What was the response? Basically, that the 'Inventions & IP Rights' contract that I signed didn't count for squat, that they owned anything that had vaguely anything to do with the problem space they were concerned with, and that if I were to use my code in a public domain I could face retribution from the company in the future." When in a situation like this, go to your nearest IP Lawyer for a consultation. Companies that exhibit this behavior are not worth your time or your expertise. With that aside, how many of you have faced this situation? What did you do and how did things turn out?

"I feel sickened, I felt like I had been kicked in the guts, 18 months work for nothing? Not wanting to say the area I'm in, they pretty much said that if they wrote word processors and I made fonts in my spare time that they owned those fonts! I don't think so. So far my options I have considered are:

1. Carry on working for the company, keep quiet about anything like this in the future and hope they don't try any funny business, but lose my vested stock options
2. Leave the company, work for another company in a different problem space and carry on my work in my own time, hoping that my old company doesn't try to do any funny business, and lose my vested stock options.
3. Try and get VC to go on this on my own, but in today's climate, that's hardly likely.

What's the killer is that I have a young family and so I have to ensure that I have an income at all times, but my gut tells me that this is the kick that I've needed to go it alone.

What are your opinions? Anyone know of any good IP Rights Lawyers?"

Comments

My employer/developer opinion...

[dstone]

Here's the opinion of an employer and a passionate software developer...

You're giving really lousy advice to a software person. When I interview developers, one of the best filtering criteria I've found for getting hard-working, passionate, motivated developers is to ask them what kind of projects they've got going in their spare time. I'm not looking for conflicts. I want to hear about something. I'd rather not hire the person that says "software is my 9-5 job; I don't dabble at home". I enjoy seeing someone's eyes light up and get all excited telling me details of some mad-scientist project they're brewing up (that will probably never be completed), etc. Hell, tell me about side projects that failed. What did you learn? That's the kind of employee I want. He's into tech. He loves it. He lives it. He'd be doing it anyways, even if it wasn't his profession. If the work I give him is boring from time to time, he doesn't feel like his job is the only outlet he's allowed for tech challenges or expression.

The most significant risk I've come across: People will work on their own projects on my time. Very possible. And yes, I've received legal and management advice that I complicate the employment relationship by hiring this type of person. That advice should be respected. In the end, it's a calculated risk. What's my upside as an employer? I get a hard-core developer that (hopefully) respects his employer for not stifling him. I've increased the chance that he's happy on the job. He may go so far as to refer his colleagues and friends. Gimme.

In the end, software development has a lot to do with growing, changing, techniques, lateral thinking, staying sharp. I can't offer challenges to everyone I hire on all those fronts. So I'm not going to stand in their way if they do it on the side. Issues can and have come up. But it's a net positive, so far.

Double-edged sword.

[FTL]

IP agreements can go both ways. When I was working for a rather evil and unprofessional company, I wrote my own IP agreement. It stated that all code belonged to the company except code that was [insert heaps of technical jargon]. Neither the company director nor his lawyer knew what I was talking about, but the exception sounded pretty obscure.

When I (and all the other employees) resigned from the company simultaneously, I took absolutely everything. Seems I'd burried something about files that were o+r deep in my technobabble. This code came in handy when we immediately setup a company in direct competition to his.

Still laughing...
--

From now on.

[www.sorehands.com]

The issue would not be of what you did before you were employed, but only from the point of when you signed the contract.

The real issue, is not the rights, but how much are you willing to spend to enforce those rights.

You can wait for the employer to file suit, and then defend on the basis of prior disclosed work.

Talk with an IP lawyer now. Also, keep version control, or some sort of logs of when you did what.

You might want to license some of what you have done to them, if what you did would help your work. Put it in memos, "I did this X years ago on my own Y, do you me to go and find that code?"

Also, I used that attitude of theirs against MSI when the WC insurer claimed that my tendinitis was from my computing at home, not from my computing at work.

California and such agreements

[dkusters]

California is a beautiful place to work sometimes. According to the California Labor Code section 2870:

(a) Any provision in an employment agreement which provides that an employee shall assign or offer to assign any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

1. Relate at the time of conception or reduction to practice of the invention to the employer's business or actual or demonstrably anticipated research or development of employer.
   
2. Result from any work performed by the employee for the employer.
   

(b)To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and unenforcable."

So, if you work in California, you have additional rights. As long as your work is not in direct competition with your employeer or your work began before you knew your company was moving in that direction, you are probably safe.

Dave

P.S. IANAL, but I play one on the net...

Wait a minute ...?

[Alien54]

Granted, it is a good topic for discussion, but didn't we have this same debate in a weekend story? ...

Let's see, here it is:

it is an Ask Slashdot article: "When Personal Projects Start To Conflict w/ Work?"

Not an exact repeat, but it seems pretty similar.

Okay, well I said my bit there, so I'll pass on this round.

Have signed copies?

[Enry]

Documentation is key here. Make sure you have everything in writing, including the fact that they think they own your work. This doesn't sound like an IP issue, but more of a contract issue, since you both signed a legal document saying your privately-done work is owned by you.

Your choices

[xyzzy]

First of all, in choice (a), why would you lose your vested stock options? In all the options agreements I've ever read, you will only lose them if you're terminated for cause. They can't take them from you otherwise.

Next, think of things this way: If you can't go with option (c) you're probably not going to get very far. You've pretty much said that you are not in a position to capitalize on what you've been developing, due to the risk involved (family, etc). So what are you losing? If the company starts working in your area, as long as they aren't STEALING what you did, you can certainly influence what they do and probably contribute to it. And, be happy that you're working on something you're interested in. It's not the end of the world! They are just in a better position to capitalize on it than you are.

*Where* do you live?

[n7lyg]

Your options depend heavily on exactly *where* you live and work. If this is a US company, which state is it in? If it is CA, WA, or a few others, IP agreements are NULL AND VOID. Search the old Slashdot files for the last time this question was asked and follow the links in that discussion for a list of states which have laws preventing IP agreements from being enforceable. If you live in a country other than US or in a state with enforceable IP agreements, good luck! You will need it!

You may want to talk to a lawyer.

[TechLawyer]

Your Inventions & IP Rights agreement is a contract, and any competent contract lawyer can give you advice about it. Beforehand, though, I'd ask if he knew about "shop rights", and if he can't answer, find another lawyer. ("Shop rights" are rights your employer has in inventions you make on the employer's dime in the absence of a specific contract to assign those rights, and are unlikely to be involved here, but your employer may assert them anyway.)

Who at the company told you the contract was worthless? Managers often talk tough, particularly if they don't know the law. HR deals with legal issues in more depth, and if you talk to them, they may be more rational with regard to your contract.

With regard to just not saying anything, you may find yourself in a situation where you may be competing with your employer. I don't know if you signed a noncompete agreement, but that may become an issue.

If you are serious about continuing with your work, I would seek out a reputable lawyer (not the one on the corner in the mini-mall) in your area. One key to finding a reputable lawyer: don't go with one who wants to charge you just for finding out what you want him or her to di.

Your IP rights (not legal advice).

[JimCYL]

Well, it sounds to me like you have a couple of good contract based defenses. While IANAL just yet, and I haven't actually taken a look at your employment contract or the IP rights contract, you are probably alright, regardless of whether or not your company tries to bully you. Generally speaking, when a company tries to crush an employee on some ground like "he's stealing our trade secrets" (which often happens in cases like yours) courts are very employee-friendly. Based on what the contracts say, a court may severely curtail the scope of any provisions you signed regarding the company's ability to prevent you from practicing your particular profession, or it may simply find such a provision completely unenforceable. Here's a good quote from the New York Court of Appeals: "Therefore, no restrictions should fetter an employee's right to apply to his own best advantage the skills and knowledge acquired by the overall experience of his previous employment. This includes those techniques which are but skillful variations of the general processes known to the particular trade." (Reed Roberts Assoc. v. Strauman) This case dealt mainly with a company's attempt to stop an ex-employee from practicing in his field of expertise on some kind of "misappropriation of trade secrets" ground, which the court pretty much rejected. However, courts do sometimes enforce noncompetition agreements (i.e. I, employee, agree not to compete with employer for 12 months after I leave my job) if the terms are reasonable an don't unduly burden your ability to make a living in your chosen field. Basically, this really is less of an IP dispute than a labor law dispute. I suggest talking to an attorney and showing him exactly what you have signed and so on. Doesn't have to be an IP lawyer, though. This has less to do with patents, copyrights, and trademarks than with the terms and enforceability of the contracts you signed.

Talk to your lawyer

[lar3ry]

Make sure that the lawyer you talk to is well versed in IP rights in your state.

Whether or not you signed a contract stating that your exiting IP is your property, it makes a difference whether or not your company ALSO signed the contract. Otherwise, it's just a document that states what your views were, and isn't an agreement since nobody representing your company signed it.

I have heard of a number of horror stories about IP being "stolen" by companies (and also by less than honest workers). However, neither of these types of cases are in the majority.

Most times, having your lawyer talk to theirs will get some agreement or settlement between the parties. It is is BOTH of your best interests. After all, a company that is seen by its employees as looking to screw its employees will eventually have zero employees working for it.

I wish you the best of luck.
--

A contract is a contract.

[TermAnnex]

I'm not a lawyer, and I don't have any experience in this, so bear with me. The agreement you signed as part of your contract with company, and now they are telling you they will break that contract, so it's you who could sue them for breaking the contract. If you release your project as open source, It would be fairly easy to prove that you have not stolen code or ideas from them in any way. Also, if the contract doesn't have any ifs or buts about your home projects being your home projects, such as, if your projects are in the same area as the companies projects then the company gets your work, it's pretty clear to me that no matter what your boss says, your contract with them is valid as ever.

How about option D?

[infinite9]

I quickly became jaded working as an employee. I found that companies always viewed me as a source of income for them, nothing more. I've never worked for a company that was loyal to me. So I'm loyal to only my family and friends. That's all. I switched to contracting as a way to make more money while getting some freedom. In my opinion, stock options, while they may get someone a fair amount of money once vested, are a risky way to go, especially in today's climate. Let's think about the math. In the five years it takes you to become vested, you could be making $50-$100 an hour as a contractor. If you live well below your means, you could put away $50,000 to $100,000 a year. In a good mutual fund over the same five years, you could do very well. And, you have control. You can leave when an environment goes bad without losing your investment in the vesting period. And you can incorporate. I have a young family also (4 kids and I'm 30), and I've missed less work as a contractor than as an employee. This is because I know when the end of the contract is and I can plan for it. As an employee, I would show up to work one day to find the company closed. It's not for everyone, but it's for me.