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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.
They even seem to be legally required to state that such is the case, or at least every contract i've signed has a footnote after the clause describing the state law.
This Space Intentionally Left Blank
The court also held that, pursuant to the contract, the company owned full legal right, title and interest to what Henderson called Brown's "solution," which he defined as the process and method developed by Brown for converting machine-executable binary code into high-level source code; reverse-engineering the intelligence from existing programs and recoding it into high-level language; and converting certain machine code into C language source.
Excellent! Alcatel won the right to violate the DMCA!
"Mod, mod, mod...and another troll bites the dust."
Now that CAN'T be enforcable. Once you leave a companies employ, they have no rights to what you do.
Additionally, considering your next employer will probably have rights to everything you create then, your previous employers contract would be in direct conflict.
Now it could also hurt the company too. The when I became afflicted with tendinitis, the WC insurance company tried to avoid responsiblity by claiming it is from my computing at home. Since the company had the same type of inventions agreement, I argued that since they owned all I worked on, then they had liability for all injuries from what I worked on. MSI took possesion of what I worked on at home, then claimed, in the WC hearing, claimed that program they took was not related to my employment which means they took my work by fraud.
The knife cuts both ways.
Fight Spammers!
And if you work for NASA... they will help you file a patent under your own name. Even if it was something you developed as part of your job. Of course, NASA gets a royalty-free licence to use the patented technology. But the inventor gets to exploit the patent if it has commercial application.
One nice little perk to being a NASA engineer (assuming you're not a contractor hired by Boing, Lockheed/Martin, Northrup/Grumman, etc).
First off I've never worked for IBM but at the time this discussion was going on I lived in Poughkeepsie and knew a lot of IBMers, so YMMV.
In any case around the time OS/2 was coming out a lot of the guys started writing OS/2 software in their free time who worked in other divisions of the company. They wanted to release it as freeware (for example a powerful text editor with REXX built in scripting sort of like an IBMified EMACS for OS/2, or a toolkit for designing the 3D icons that OS/2 supported). IBM employees were of the opinion that they were under a "we own you brain" contract so any software they wrote, even on their own time, even unrelated to their job was the property of IBM and thus it had to be distributed as freeware only after IBM had approved its distribution as freeware. As a result there was an internal and an external BBS for these freeware OS/2 applications.
IBM never went to court with any of these guys, they were all of the "a deals a deal" opinion, and that the contract did mean that IBM owned any creative work of their's. But there was discussion the OS/2 community when some of these programs leaked as to whether this was piracy or not. These programs had never been copyrighted, their authors had intended to release them as freeware, the copyright holder had not asserted rights among the general community (the employees were waiting for a "go ahead" from IBM, IBM hadn't given a go or a stop signal)....
Assignment of Inventions and Original Works.
(a) Inventions and Original Works Retained by Me. I have attached hereto as Exhibit A a complete list of all inventions, original works of authorship, developments, improvements, and trade secrets that I have, alone or jointly with others, conceived, developed or reduced to practice before the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement. If disclosure of an item on Exhibit A would cause me to violate any prior confidentiality agreement, I understand that I am not to list such in Exhibit A but am to inform the Company that all items have not been listed for that reason. A space is provided on Exhibit A for such purpose. If no list is attached, I represent that there are no such items.
(b) Inventions and Original Works Assigned to the Company. I agree that I will make prompt written disclosure to the Company of and will assign to the Company without further payment or consideration all my right, title and interest in and to any ideas, inventions, original works of authorship, developments, improvements or trade secrets which I may solely or jointly conceive or reduce to practice, or cause to be conceived or reduced to practice during the period of my employment with the Company. I understand that only ideas, inventions, original works of authorship, developments, improvements and trade secrets which
(i) were not developed or produced using equipment, supplies, facilities or trade secrets that belong to the Company, and
(ii) do not relate to (A) the business of the Company as it is currently conducted or contemplated to be conducted or as it may be conducted during the term of my employment by the Company or (B) actual or contemplated research or development conducted by the Company, and
(iii) were not developed or produced during ordinary business hours
are not covered by my obligations to report and assign under the first sentence of this paragraph (b).
Some observations:
1. If he had the idea before he was hired, he should have listed it. If he did not list it then, he cannot credibly assert that he had it then. "If no list is attached, I represent that there are no such items."
2. The fact that he did not write down the idea, does not work in his favor. The agreement obligates him to disclose ideas in writing to the Company during his employment. ". . . I will make prompt written disclosure to the Company of . . . any ideas. . . which I may . . . conceive . . . during the period of my employment with the Company." This is what he was hired to do.
3. If you want to make sure that it is yours cybermace5 had it right your own time, your own stuff and journals, journals, journals.
4. RTFC. If you do not understand it find someone to explain it to you. If the Company is hiring you for a technical position it is because they want your thoughts and are willing to pay for them. They are entitled to what you do on their time or with their stuff. If that makes you unhappy, you need to find a different way to make a living. Can you say consultant?
I am 100 percent in agreement with the above points. Let me also add that these are guidelines that everyone who is involved in open source should observe religiously.
You can endanger an entire open-source project if you don't enforce an absolutely rigid separation between the open-source work and your real work. If you are subject to an idiot contract like what frequently obtains in the US, please, don't work on open source at all, not even at home - you're dangerous.
Don't work on your open source stuff on your work machine, even if it's on your own time and even if what your employer does is not even remotely related. Don't even engage in email discussions about it, not using a work account and/or from a company computer. This is point 2 above.
This sounds nuts but the post above is bang on the money. Many companies really do think they own you lock, stock and barrel, 24/7.
Somewhere a dark and sinister virus is lurking in the head of a smart programmer, not to do harm, just to test a theroy. I wonder, would a company want IP to that? What if it accidentally got into the wild - while being researched, it where too slip out a internet gateway. What company wants to put up a hand and claim ownership of this kind of property? Can a company "cherry pick" what ideas they own? Or would it seem reasonable to assume they would own "all" your ideas. Heck, the pro-contract crowd here - what do you think? This was concieved under contract, and it escaped, who owns the liability?
I work at Alcatel in Plano, and most people here agree that while Evan is a nice guy, he pretty much slit his own throat from day one.
:-)
This is really not as simple as "Alcatel (DSC, really) owning soandso's idea", although it makes great headlines.
What happened was:
1. He signed an agreement (which most of us do not have to, BTW) giving DSC rights to anything he invented - gee whiz, Cisco, Sun, Nortel, Oracle - pretty much eveyone does this with the few choosen employees who get to sit around and dream up these things.
2. He made the big mistake of telling his supervisors about this great idea of his when there was no written documentation (duh.)
3. DSC offered to give him a big $$$ check for his idea, but, he decided to "fight the man" (read: gamble) for his idea and he lost.
4. Even Evan himself admits that he could have excluded this idea (that he has always said he starting working on in 1975) from the legal agreement (doh!). Maybe he would have stood a better chance in court if he had some prior documentation or at least a mention of it.
Whats the real lesson here? Common sense always applies. If you've got a million dollar idea - dont sign an intellectual prop agreement! Or how about, Dont listen to lawyers who want you to go to court so they can get rich from you (my personal favorite).
I truly like Evan Brown, and i hate to see him get slammed by our legal guys (i've watched this case since 1999), but for the most part we all believe he just made bad decisions as opposed to being victimized.
BTW, we have running joke at Alcatel that our legal department is a profit center - we've sued many more people and corps...
Moderators need an additional choice: "Karma Whore" for people who cut-and-paste articles as their comments!
obvisouly we aren't privvy to all the details surrounding the case; but I can only assume he discussed reasonably high-level concepts with his colleagues.
so, lets say, i go to my bosses and say i'm resigning because i've come up with a really good idea to make money from software (in this fairy tale, assume my idea is unrelated to our core business). i tell them the high-level angel on it, but retain the details. now that a precident has been set, they say "hahaha, sorry pal; all your ideas are belong to us". and they sue me. um, ok, so i just go, "oh right well my idea is based on the precognescent polarity of perpetual motion and you just go click click click and it all happens."
my point is, if the details haven't been revealed to anyone else, do they have the right to supena my brain? and how will they ever know that my disclosures were exactly the way it should be?
I interviewed with a technology development company and was asked to sign one of these forms right there at the interview. It was made clear to me that if I didn't sign it right then and there, the interview could not continue. Most of it involved non-disclosure. But some of it did sign over all my invention rights to them.
There was one clause that specified that if I was not hired, then the contract only applied to information made available to me during the interview. It was not entirely clear how well that applied to the parts about me handing over all my rights to my own intellectual property.
The really stupid part of this wasn't that they wanted me to sign such a contract, but that they barely gave me enough time to read the whole thing (I actually did). Due to it being in the circumstance of an interview, it wasn't possible to go consult an attorney, much less find one that practiced in both employment law and intellectual property law (we're probably talking a week or two at least). When I asked the HR guy about it, he indicated they had interviewed 3 other candidates for the position and were looking to make the hiring decision within the week, and that such a delay would probably mean the position would no longer be open.
What made me decide to walk out wasn't so much the fact that the situation existed (though I might well have because of it), but rather, the fact that the HR guy was so perfectly prepared in his answer to me. Whether he was telling me the truth or not wasn't even relevant. Later, I found the same job was posted again. Who knows how many walkouts they had.
Later, a recruiter was trying to get me in to interview for a position at an entirely different company. On Monday he was saying they had people from their New York headquarters in for the week to do the interviewing and they were booked up very tight. By Wednesday, he had an appointment for me for a Friday interview. Then the surprise. He wanted to send me the non-disclosure and non-compete contract. His explanation was because the schedule was so tight, they wanted people to be coming in with the contract already signed. At first we had an issue with the fact that he was sending it to me in Microsoft Word format (whee, I get to see all the revisions they ever made to it). I pointed out to him that I was a Unix person, this was a Unix job, and he was a recruiter doing more than half his work with Unix positions, and he wanted me to run Microsoft crap? So I ended up having him pull up a copy and asked him about some clauses in it (he was patient enough to do this, surprisingly). I focused on the non-compete and asked him if there were any clauses that made it only apply if I got the job. There were none. So I explained to the recruiter that "If I interview there having signed this, find out what this secret area of business is that they are doing, them I'm no longer allowed to work for anyone else in the same line of business, or even related, even if I don't get this job?" He paused for a minute and then said "I guess not". now I wished I had gone ahead and let him send me a copy of that.
The immoral of the stories here are that companies will try to take advantage of you one way or another. And it's probably even worse during this current economic downturn (equivalent to a full blown depression if you look just at the high-tech businesses by themselves). Watch out for what you sign.
now we need to go OSS in diesel cars
... so, you're using their services, paying them for an education. and during that time ... inventions of yours become theirs? yes, i'd like to walk into my local fast-food chain, order a meal, and be told that if i come up with any ideas and scribble them down on -their- napkins while sitting at -their- tables (and especially if the energy to do so comes from -their- food) then my ideas are theirs ... wonderful.
... of course, we're still not sure how to split up the ownership between team members =)
btw, at my university, we discussed at length the status of our code written during senior projects -- most of the projects were for university-related functions, such as support for prof's, the dorms, some of the departments (especially websites) etc. and we were told that, as far as the prof's knew, there was absolutely nothing transferring ownership of such code to the university
Same thing goes for university graduate students. Be careful, your university owns your work.
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.
If the Alcatel agreement has been anything like the ones that I've signed in the past, then the way this works is that the IP of your lipstick improvement is owned by AMD without question. You may negotiate with your employer to license the invention from them, or even request an outright release of the invention to you. If you developed a lipstick process and you work for AMD, the chances are quite good that they will release it to you with no strings other than perhaps some compensation for the cost of reviewing by their legal department. With that release, you can continue to design motherboards all day and mix lipstick all night and see which one makes you rich first.
The key thing that can earn you the opportunity to regain ownership of the idea is that your invention didn't come about through a path directly related to what the company pays you for. In particular, the company will be protective of any ideas that spring from your direct work and could pose a competitive threat to their own products. Of course, there are many companies that have sprung from just these circumstances - the classic one here is Intel, started by a bunch of guys that thought Fairchild was too stodgy. The existence of so many of these examples is exactly the reason that your company asks you to sign a ridiculously overreaching agreement in exchange for an offer of employment.
If you're familiar with the gestation of Apple Computer, it's almost exactly like the cited case. Steve Wozniak was a red-hot who wanted to build a personal computer. That was a little different than his job at Hewlett-Packard, but not very. The protos were built in an HP lab, using HP parts. After he proved it was do-able, he offered it to H-P as a product opportunity. They didn't see how anybody would ever want a personal computer and released the IP to Woz. The rest is history.
I haven't read the thread fully, but people who write technical documentation often run into this wall as well. They may be approached to write a doc for a product unrelated to their "day job" or may choose to write a book on what they do work on but for the publisher rather than their employer. In both these cases, they typically must submit their drafts to the company for clearance and release.
Finally, this choice of motherboards and lipstick is an interesting one. One of the big, hip lipstick companies is called Urban Decay. They made their name with weird colors that had names like "Toxic" and "Pallor". I think she's left now, but the founder of that company, Sandy Lerner was one of the founders of Cisco Systems...
DF
yeah, i think it probably says something very similar to that. I was offered a job by a company with HQ in Texas, and as part of the package along with health and medical and drug test (don't even get me started on THAT) info, is the standard IP and confidentiality agreemnet. It reads, in part:
Obviously I can't sign that. But that doesn't change the fact that several people have asked me to do so, with a straight face even. I live in CA, so "the maximum extent permitted by law" is apparently less than what passes for employment in Texas. One more reason we should bulldoze the state and give it back to the Mexicans.
So what did I do? I said, "This isn't enforcable in CA." They said, "You're right." I said, "So, how about we just strike it out?" They said, "Uhhh..." but they watched me do it, and I signed and dated the change, and they signed and dated it too, and that was that.
Humpty Dumpty was pushed.
As for the decompilation problem this guy spent 25 years thinking about, there's a open source C decompiler, although it's rather dated. Commercial decompilers go back a long way; the first one translated IBM 1401 assembler programs into COBOL. The COBOL orientation continues; see Source Recovery. Recovering long-lost business applications seems to be the big market for these things. Decompilation is tough, and the output code is usually ugly (because decompilers tend to lose idioms), but it's certainly been done.
It's a neat problem, and somewhat under-studied. Of course, today a good decompiler would probably be considered a DMCA violation.