Company Ownership of Employee Ideas

Anonymous Coward writes "Alcatel USA Inc. filed a lawsuit, and won, in a bid to claim proprietary rights for a software idea of one of its former employees, Evan Brown. Evan signed a invention disclosure agreement with his former employers but what makes this case unusual is that Evan never wrote anything down with regards to his idea, meaning that Alcatel seems to be claiming rights to an idea in his head. Does this mean your thoughts may belong to your company? Maybe...." This story has been kicking around for a few days but this is the first legal analysis I've seen of it. Watch what you sign! J adds: see also recent TR story and our 1999 story.

Comments

you really think so?

[Anonymous Coward]

You honestly think the contract he signed said "we own the rights to all inventions and THOUGHTS you may create during your employment here, even if you have created no inventions during your employment and only THOUGHT about creating said invention and actually did so only AFTER leaving the company"...?

I really doubt that occurred.

If he CREATED something, that's one thing. By your logic, any business I created after leaving employment somewhere would actually belong to my former employer. Say, I work for Intel... and I decide to start a coffee shop that specializes in cookies and donuts too... I started dreaming about doing that since about two years into my employment with intel... but now that I've left the company and started my business, all of my products and business belong to them becuase I dreamt/thought/planned it during my employment?

What about industry? Certainly you shouldn't be excepted to adhere to the contract if you work for Advance Micro Devices making motherboards and your invention has to do with a way to improve lipstick - your employer should have NO claim to your invention since it in no way had anything whatsoever to do with your employment or even your employers industry.

Further, what if you wrote a book and published it? Say a mystery novel...

Guard yourself, but don't quit tinkering!

[cybermace5]

First of all, if you signed that agreement, everything you do at work is theirs.

If you want to do something on your own time, you have to take precautions. It might not be convenient, but you'll thank yourself when your old company can't come after the business you just started.

1) Keep a detailed journal. In fact, keep two journals, one for the things you do at work and another for the things you do at home. There shouldn't be much common between them.

2) Buy your own equipment and development tools. You can't use their computer, their copy of Visual Studio, their ciruit fab machine, whatever. Anything you make, that you want to be totally yours, must be done on your own dollar. Don't even use their workspace, or their email system, or their internet pipe.

3) Make sure you fully understand the intellectual property agreements, and have a copy of the one you signed. If you break any part of the contract, you don't have a leg to stand on.

I know everyone wants to be friends with their old company, happy memories etc., but this is business. If they think you are taking a chunk out of their dollar, they will come after you. Play it safe, or be sorry.

This is a good ruling

[HEbGb]

The courts rightly recognized that employees should not be able to withhold potentially valuable ideas from their employer, specifically against their employee agreement. Whether the ideas are committed to practice, or written on paper, is irrelevant. He had an idea valuable to his employer, tried to get extra money from it, and when he didn't get an offer good enough, he refused to disclose the idea. What a horrible precedent it would set if Brown had won.

Pinker was absolutely right when he said:

Technology companies are in the business of inventing, and if people are doing it on their own behalf and take it for themselves from the company, the company is not going to stay in business long.

Also vital is this passage:

Lewis believes Brown could have helped his case had he kept an idea log, as inventors do in the patent arena. Establishing that Brown had the idea years before coming to DSC would have contradicted the signed agreement and gone a long way toward establishing Brown's credibility.

Heed his warning. Brown has a tough case to fight, but kudos to him for 'sticking to his guns'. I predict, however, he will lose.

Re:This is a good ruling

[Salamander]

Not only was the idea developed on his own time, it was developed before his employment there began. That's the part that's so noxious about this. Basically they're claiming rights to an idea that had nothing to do with them or their business, just because someone happened to work for them somewhere along the way, and that's nothing but the rawest kind of opportunism. How, one must ask, does that fit into the supposed theory behind intellectual-property law, which is to foster innovation and creativity for the public good?

Re:Selling more than your soul...

[the eric conspiracy]

At my last three jobs, I have conveniently "forgotten" to submit a signed copy of the document that lets them own everything I create. For years now I've hated the idea that anything I do while employed (even if it's not work related) could be taken away from me.

If your idea is work related, it proabably doesn't matter if you signed the contract or not. If the idea isn't work related, many states prohibit the company from claiming rights to it,

So the effect of your not signing the contract is probably zero.

Welcome to the new feudalism.

[g4dget]

If you work for a company, the company basically owns everything you invent. If you work for a university, the university claims ownership of your ideas. You might be able to work for yourself, independently, but that's getting harder and harder, too. Software companies are putting out a minefield of patents, getting your own patents is enormously expensive (basically, it's affordable only if you become your own patent attorney), commercial software and services you use may come with requirements to transfer intellectual property, etc.

One lesson from this is: if you do something "on your own time", don't talk about it to your company; you can always publish it after quitting and nobody can prove anything. Furthermore, in certain special circumstances, if you do need an exception from a company's IP policy, get it in writing before you sign the employment contract.

Why companies get away with forcing these contracts on workers is hard to understand. They hire consultants that do not fall under such restrictions and pay them more to boot. Furthermore, in many states and countries, there are limitations on such claims by employers, but this is in Texas.

From my reading of it, it seems it was his fault.

[Xoron]

Read this paragraph again:

"In April 1996, Brown sought a release from DSC to pursue his idea. Brown alleges that he asked several managers at DSC whether the company would be interested in helping him develop the idea. According to Brown, DSC and Brown began negotiating an agreement whereby DSC would pay Brown a percentage of savings realized by the company if the idea was successful and a percentage of income from third-party sales, but the company later halted negotiations. Brown says when he refused to reveal his idea, DSC fired him and sued him."

It seems to me, that while still employed he tried to negotiate an agreement with them, for them to pay him for this idea he had (Which he had not stated in his inventions). They started negotiating, and then a lawyer of theirs realized that "Wait, we own this, don't we?" So they asked him to turn it over. I'd say if he was negotiating to sell it, it was damn well concieved already. Only when he then refused to disclose, they fired him (under breach of contract) and sued his sorry butt.

This is not a precedent to them owning ideas in your head. It's a precedent saying, don't try to sell inventions to your employer, who was employing you when you came up with it. (Which really is rather fair).

Re:From my reading of it, it seems it was his faul

[gamorck]

I would like to thank you for pointing this out. Like everybody else on here I was getting ready to make a mess in my pants - but after reading your statement it suddenly dawned on me:

If this idea really had nothing to do with the company's business and couldn't be applied to anything they were doing - why in the heck did this guy try to sell his idea back to them?

I've had discussions along these lines before - but I have to admit my sympathy for the guy disappeared when I realized that he was trying to sell an idea back to a company that he admittedly finalized while working for them. While he may be innocent of any intentional "wrongdoing" he's still guilty of being an idiot.

Personally I still think this story is interesting based on the fact that the court ordered him to pay the companies legal fees. I believe this is practiced in Europe (at least as far as civil court is concerned) and I've long supported its use here. This says to me the court/judge seemed to feel that went beyond a mere misunderstanding into the "gross negligence" category of dispute.

And considering the circumstances in a fair and rational manner - I would have to say I agree with them.

J