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Are NDA 'Prior Inventions' Clauses Safe to Sign?
BenderMan asks: "I own a small consulting company. Today I was asked by yet another corporate customer to sign an NDA with the increasingly popular 'Prior Inventions' clause. The gist of it is they want you to provide a list of all your past and current inventions and/or ideas so they can define and protect the intellectual property that they have hired you to build. Like many of us that lay awake at night, whilst the hamster wheel spins new ideas, I've got a number of un-patented works in various stages of development. Given that mutual NDAs only provide one year of protection, I don't feel obligated, nor do I have sufficient time and energy, to fully and properly document my inventions for an NDA. While these clauses are written with good intentions, the reality is that these valuable ideas would be placed in the hands of people that could potentially profit with impunity (Have you priced patents lately?). Unfortunately many companies are not willing to strike this clause from their contracts. Does Slashdot agree that this is a concern, and how have you dealt with these situations?"
IANAL, but the document itself would be proof of Prior Art, allowing for easy invalidation of their patent... right? But then again, not everyone has laywers, time, and money to chase patents with... :(
Either bend over backwards to please your customers or bend over forwards to be pleased by your customers.
How will you decide?
Film at 11!
(Every time someone puts you in a position where you have to choose between two lesser evils, take the third one or make one up yourself.)
"All you have to do is be fragile and grateful. So stay the underdog." Chuck Palahniuk, Choke
It's tough to say without seeing the clause whether you really have the problem you imagine. And, ob. disclaimer, IANAL. TINLA.
I've solved this in the past by making sure that their ownership of my ideas is restricted to items produced in the course of (as opposed to during the term of) working for them. This gives them ownership of IP created as a result of executing their project and no more. In terms of the "Prior Inventions" clause, I'd attempt to rename it "Prior published inventions" and give them a good list if they won't strike it. If they really want a list of unpublished inventions as well, maybe you could extend the term of their NDA to something insane like 10 years?
If your ideas are valuable, they won't strike the prior inventions clause and won't amend it as I describe, and they won't restrict the IP transfer clause to items produced in the course of your contract, you may be dealing with a client that you should turn down. Those exist, and, though it's painful to turn away business, sometimes it's good sense to do so.
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I asked my would-be employer about it, and they pointed to the sentence that constrained the clause to inventions applicable to what the company produced. Since the company sold health care software I didn't feel threatened. My personal inventions don't deal in that area.
Odds are they are using boilerplate language and have even less desire to hear about your velcro detachable sideburns than you have to tell them. Just ask them if they're wedded to having that clause in the contract, and if not strike it. Alternately, specify that the clause only applies to a certain problem domain (e.g. "With respect to image processing, we warrant that the following is an exhaustive list of our IP: blah blah blah" and then your Sideburns 2.0 get to remain your own secret.)
IANAL, DTAYROS (don't trust anything you read on Slashdot).
Help poke pirates in the eyepatch, arr.
I was co-owner of a small company that was bought by a larger company for some technology we designed. They hired us to further develop it. I had to sign one of these prior inventions things.
The main thing I was worried about was that these guys were going to buy our company to get our techology then fire us. The project we were working on before we were bought was based off some hobbyist stuff I had built before starting the company. In fact, the core valuable parts remained exactly the same in both the hobby projects and the project we were selling.
Without going into details, I listed the hobby projects as prior inventions. They never really thought twice about it because they looked so inocuous.
IANAL - and that's really the crux of the matter, neither are you, neither are 95% (ass pluck statistic) of Slashdot. If you're worried, take the contract to a lawyer (preferably experienced in intellectual property things), explain to them your concerns, have them examine and make any proposed alterations they think would be necessary.
Don't be pressured into signing something you're not satisfied with, in most civilised countries a (potential) employer cannot hand you a contract and say sign now or sign out, you can and should take the time you need to properly examine the contract, by professionals if necessary.
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Just add a similar clause for them on to the contract and see them groan... why should you bear the burden of discovery alone? You've got ideas you want to develop later right? So they need to disclose ALL of their ongoing development efforts in all areas of their business and don't let them off easy... if it looks like they're skimping on areas you know they're doing work in call them out.
Or you could follow the letter of the law and disclose a bunch of dumb ideas you had when you were ten and let them know that it might take you a while to get up to the present day.
Hmmm I once had this idea about how to train a monkey by dipping his feet in red paint so he'd know not to climb on the table anymore, then there was my GIJOE para-glider apparatus... it almost worked too!
A fool throws a stone into a well and a thousand sages can not remove it.
This is probably a naive suggestion, but if your business is specialized enough, you might be in a relatively small pool of entities competing for these contracts. Perhaps you could take a few of your competitors out to lunch and ask what they think about these clauses?
If enough people in your market find them distasteful and decide to stop accepting such contracts, the contracts will probably become more mutable than they seem to be now. A vocal minority willing to tighten their belts for a few months and offering lucid objections to the clause might be sufficient to effect some flexibility in your clients.
Of course, that will involve passing up work/money. Might be cheaper to just document the stuff.
Just sign below the pentagram and draw some blood to the pen from your fingertip.
I have an idea for a new style of cell phone interfaced with computer servers. What patent forms do I need to fill out? And what will it cost me? I'm very certain that this is 'the next big thing' and if I patent it, I would be able to rake in very much money. If this comes about, me making money, I'll share with the nice guy who posted to me how I go about patenting. I've tried the uspto.gov site and its too confusing. I've called, but they never sent out the forms to me.
God spoke to me.
Unless you put them into practice. People who keep their ideas secret even though they have neither the means nor the opportunity to implement them are just hoarding for the sake of hoarding.
How we know is more important than what we know.
I ran in to this situation. The company made me the offer, we negotiated and I said yes. They handed me the contract to sign. I read it. The employment contract had some wording about helping them secure intellectual property rights following the end of my employment. It was badly worded: as spelled out it created an indefinate obligation to do work for free following employment. So I said, "Look, I see what you're getting at here but this is bad wording. We should tweak it a bit." They said, "No, everybody signs it."
Not everybody. I didn't. And a month later I got a much better job at a much better salary.
My advice to you is this: If you're not important enough that they're willing to negotiate the contract then you're not important enough and while you work there you'll never be important enough. Walk away. Its a bad deal.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
The customer does not have ownership of anything not directly applicable to the work they are paying for. They acknowledge that they have no IP rights to anything you may invent on your own time, with your own equipment.
I have had customers demand ownership and license of all our prior work. After I stopped laughing, which really pissed off the purchasing agent, I pointed out that they really didn't want to test that in court, so that clause was declined. They try other ways as well.
Each customer will do their best to stake out territory in your mind. My approach has been to define for them what they may stake out, and what the limits are on it. If you control that conversation, they need to negotiate your terms. They claim they won't, but most reasonable ones will at the end of the day.
For this reason, we don't sign non-competes, and we require mutual NDAs. We have been burned a number of times with others NDA documents, so if we find them insufficient, we force the customer to sign one of ours, or we simply refuse to discuss confidential material with them. Non-competes between organizations are funny, but some customers try to require this. Our response is uniformly that we will sign the non-compete under the requirement that the customer requesting the non-compete execution pay full wages, business expenses, etc. for the entire duration of the non-compete. When they tell you how ludicrous that is, it lets you tell them how ludicrous it is to request that your company not work in its field for a period of time, and if they are going to demand it, they are going to need to pay for what they ask for.
We have had customers steal from us, "partners" lie to us and stab us in the back. It is part of business. Ethics and morality take a back seat to egos, and the pursuit of the almighty dollar.
Your job is to demand certain core rights, and stick to your guns. Have a few you can negotiate away and get something in return for this, but if the customer understands that there are some red lines not to be crossed, well, they will either respect you for it and negotiate, or leave you for some other pushover.
You create something outside of the contract domain, scope, with your own stuff, even if it was during the contract, as long as you did it on your own time and with your own stuff, you own it. You need to demand that. If you don't they are going to insist on owning everything in your head. If you let them push you around here, well, your compensation is going to suck as well.
If you're really consulting, not becoming a psuedo-employee, you definitely don't want to sign that. That's an employee kind of thing, where the assumption is that you have no other customers. If you do have multiple clients, you don't want to limit the areas in which you can work. Such NDAs must be very narrowly drawn. You can work this out. Ask them what NDAs they ask from, say, McKinsey people.
I once turned down consulting at Xerox PARC for that reason. They wanted an overreaching agreement for a part time deal.
Your good ideas are your lifeblood. If you have been honing and developing methods and techniques over the years, then you've been building a priceless (or at least highly valuable) personal resource, to be metered out in small, controlled, and non-exclusive amounts to your clients.
For any single client to want the whole lot, nicely gift-wrapped and handed to them on a plate, is the height of impertinence, even if they say that they are going to use the document merely as reference and to give you proper accreditation. This is the real world --- that won't happen. And you probably don't want to spend 6 figures in court to enforce it.
By all means produce such a comprehensive document. I suggest that the MINIMUM price under which you would offer it to a client should be US$50,000, under non-exclusive NDA and with all your rights reserved. And that would be utter peanuts for this kind of thing.
You might like to consider the lengths to which companies go in search of valuable advice or ideas, in the form of hiring consultancies or even industrial espionage. Useful information is not cheap, so don't undersell your own.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
Haven't you asked them to show you the same respect by providing you with a list of all their prior and current ideas and inventions? Insist it's only fair for them to show you the same respect. I'm pretty sure they'll choke on their coffee at the notion.
If they argue that their company is much larger than yours, point out to them that they should be well prepared to handle such a request given that they ask you to provide them with said information. Also let them know that as a growing business, you have many ideas under development to provide value added services to your clients and fewer resources with which to bring your ideas to fruition. As a result, one year is not a long enough term of engagement to justify such a release of information on your part.
You may also wish to point out that, according to NDAs you have with other companies, you are not able to release any information pertinent to those ideas and/or inventions you are/have been engaged to work on, and therefore the information would be incomplete simply due to the fact that you respect your existing NDAs.
If this helps, and you find a better solution, please let me know as I am in the same boat.
Ideas are not worth anything ... Unless you put them into practice.
Yeah, right. I guess you never heard of patents.
I've seen such contracts frequently. In every case, I simply rule-out (scratch through) those lines. And sign the resulting contract. I have NEVER had it become an issue or come back for negotiation; it has always been accepted.
You'll never know until you try.
No other company is going to sign something that one-sided. Where are they going to find staff? It's not going to end until NDA's and assorted silliness get to the point no one wants the job. I have slid piles of paper like that back at customers and said we're either going to trust each other or we're not doing business. Surprisingly effective, but not 100%. If they're that stupid about their paperwork, how are they going to be smart about development? YMMV but I've never seen a contract worth having that had that much paperwork involved.
Drug tests are another one. One company I interviewed with, a telecom in Arkansas, wanted one and I said it was no problem if I could have access to the drug test results of everyone on the management team all the way up to the CEO. That was a head scratcher, no one had asked for that before. I responded that if they wanted to look behind my kimono, I wanted to see behind theirs. Then they had to fess up that the execs didn't get drug tested. Ha! No tickey, no washy buddy. If they didn't, I didn't. Told them to call me when the CEO decided to get tested. They went out of business a couple years later...see what happens when you don't hire me? ;)
It's all really quite insane. I mean I'm sorry that somewhere back in the past you got burned by some former employee but I'm not paying that tab. And if you let lawyers run your life you're not someone I want to work for anyway. People leveraged to the hilt and desperate for a job may have to eat shit like that, but, fortunately, I don't.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
In Minnesota such a requirement is null and void. If you really are worried, consult a lawyer and find out your actual rights.
At one former employer, they sent such a "required" form to the newly acquired Minnesota office. Each and every employee filed it in the circular file. They couldn't even complain without opening themselves up to a lawsuit.
I'd say that if your prior inventions are so transparent that they could be stolen from a list, then they are probably not the sort of thing that ought to be patentable. Say for example, a method for organising tracks on an MP3 player by category and sub-category menus.
:-(
Sadly however, what ought to be patentable, and what is patentable are two very different beasts.
I was in a similar position a few years ago. After working for 4 years, my employer finally decided to ask us to sign Intellectual Property agreements giving them rights to all our inventions. Given that I had a software development business on the side and a few ideas I wanted to patent, I took the question to my attorney.
He suggested that in the area for Prior Inventions, write something to the effect of "Various inventions in the fields of X, Y, and Z". X, Y and Z of course being general descriptions of the area your inventions relate to. If these areas overlap in any way with the clients line of work, you probably should consult an attorney. If not, you can probably get away with a general answer.
To me, it seems the solution would be to have them clearly and specifically define the intellectual property they're trying to protect in the NDA, and anything they don't define isn't covered. They know exactly what they're trying to protect, so the only reasonable approach is to make them do the defining.
I've had to sign documents like that a couple of times. I have never had a problem in practice; my feeling is that the intent of the document is to give them a basis to fuck with you if they feel you did something bad. Since you'd generally have to do something extraordinarily bad to get a company to actually try to go after you -- there's a lot of burden of proof on them, and it would involve significant legal costs -- they probably won't ever do anything and it may not be worth worrying about.
That said, after receiving significant doses of reality early in my career, I prefer to cover my ass when dealing with large corporations. And I agree, most of the forms I've seen are bullshit. (Some even assign all ideas you've EVER had, even before being employed, to the company. Insane.) So I have a general technique that I've adopted.
The basic gist is that you fill out the form, but list a bunch of projects and use codenames for them. "Homer", "Olivia", "Butter", whatever. Throw in nice vague and general descriptions that cover a very broad field that you think you might ever be interested in -- "multimedia application", "browser", "engineering tool" -- and there you go. Put in a good half dozen or more. Don't worry: whatever you put on there, they'll sign it! Your manager doesn't give a crap. It's only the lawyers that want it filled out, and conveniently the lawyers aren't the ones signing off on what you put in there.
Later on, in the unlikely event that they do decide to go after you for something you create, which I've almost never seen, it will be trivially easy to claim that this "multimedia application" was already disclosed to them as "Homer", is thus exempt from the agreement, that you therefore retain all rights, and nyah nyah nyah.
Vagueness is a contract weasel's best friend.
You must be working with multiple clients even if sequentially over the course of a year. If one wants to claims something you do later is owned by them, seems like they would have to fight all your other clients for it. I'd be interested to see what an attorney would say about the multiple client issue.
I'm currently transfering my business and need to draw up NDAs and other contracts. I knew I needed to protect myself for transfering more than necessary but I hadn't considered this issue at all, thanks for bringing it up.
-Tim Louden
IANAL, never played one on TV, nor even dated one, but I think that what you are describing is a cartel, "prohibited by antitrust laws in most countries"... Not that I would not suggest to you, nor to the original poster, organizing in this particular way with your competitors, but maybe it is not entirely wise to post your intentions on /. ? :)
Paul B.
You then get a year to put up or shut up, but you're protected during that year.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Dear Bender,
Take the advice of my good friend Gary Kildall and refuse to sign anything like an NDA. Nothing good can ever come from it.
Sincerely,
Bill Gates III Esq.
What makes you think that?
Would you, acting with good intentions, try to put something like that into someone else's contract?
Dude, they're treating you like shit. They probably don't have contempt for you specifically (just as the anti-aircraft gunners weren't specifically trying to kill Yossarian), but nevertheless, they're doing it.
Negotiate that clause out. If they won't budge on it, then they're not serious about getting stuff done, and this clause is just the beginning of your problems if you continue to work with them.
This is always the approach I take. I've been an independent consultant for 4 years. Most of the consulting contracts I have handed to me have something outrageous in them. eg 3 hours termination notice for a 12 month contract. They just try it on.
Never ever fall for the line "It's just a standard contract". There's no such thing. Make sure you have a lawyer to help you, but the vast majority of the time you can generally just pull the silly stuff out and the client won't put up a fight.
One of these days I'm moving to Theory - everything works there
That's how contracts are negotiated. By signing a modified version and handing it back for counter-signature, you've made a formal offer. They can take it as-is or argue further. (Oh, if there are any bits about who is and is not empowered to negotiate changes to the contract, just strike those, too.)
Since I got used to dealing with lawyers, it's uncommon that I sign a pre-printed contract without a pile of amendments.
But if someone's insistent, I mention some of my biggest and/or most litigous customers, and explain that I am contractually barred from disclosing what I invented for them, so I am unable to provide an exhaustive list of prior inventions... in exactly the same way that I will not disclose the the subject matter of this NDA. I haven't had to go beyond offended and huffy at the thought that I would (horrors!) violate an NDA.
But IANAL. Would this work?
First off,I have a really short NDA/agreement that basically says that we will trust each other, make reasonable efforts to protect each other's IP, etc. I offer customers a 12.5% discount if they just go with my agreement.
For other customers, I remove any contract clauses that don't seem right to me.
One thing that "raises a red flag" about potential customers is if they just send me signed contracts for my signature without bothering to email me a copy of the agreement first to read over. This rarely happens, but when it does,it bugs me.
They aren't under any obligation to hire you, just as you aren't under any obligation to work for them. In general though, it doesn't matter. The main reason being that they probably WON'T say that is they are honestly interested in you. Taking a hard line with new recruits is an excellent way to not get the people you want. Now maybe they have a ton of people lined up and you are just here because your name came first in the stack, but usually it's because they like you best. Also you'd have to ask yourself if you really want to work for someone who says "Do this now with no thought or we fire you"? If they are going to give you such shitty treatment in the hiring process, it's not likely to get any better later.
I think you'll find most job offers have a bit of shelf life to them. You can say "Sounds pretty good, I just need a couple days to think about it," and the offer will probably be valid after those couple of days. If it's not, chances are that you probably didn't want the job. Either they are colossal assholes, or they are hiring you as a replaceable cog and they intend to use you up and throw you out.
Now of course the situation may be different if you are desperate for work, however in that case perhaps you are willing to put up with the crap so perhaps you are also willing to put up with the crappy contract with no thought. However if that's not the case you should ask for time to think and review it, and if they won't allow that, it's a pretty good sing you didn't want that job anyhow.
Ideas are not worth anything.. Unless you put them into practice
From TFA, he *IS* putting his ideas into practice -- each of his clients benefits from one or more of the ideas that he has developed over the years.
So, he isn't "hoarding" ideas for the sake of it, he's building a valuable personal portfolio of solutions and techniques, and those are the key assets of his business.
Saying that that is worthless is nothing short of idiotic. If it were so, then all of education and experience would be worthless too. You seriously need to reevaluate your system of value judgements.
Most do test for alcohol. The thing is alcohol is metabolized by the body extremely quickly. It is broken down and leaves no trace. So unless you are actually intoxicated at the time of the testing, it won't show up. You can get completely wrecked the night before and so long as you give your liver sufficient time (generally 1 hour per drink) they'll be none left.
Unless someone is a raging alcoholic, they are usually smart enough to sober up for drug tests, and if they aren't their drinking probably is obvious enough to get them fired anyhow.
You're a businessman. So act like one.
1) Discuss the matter with your lawyer. You DO have a lawyer, don't you?
2) Negotiate. Strike out clauses you don't like. Add in ones you want. You are the equal of the guy on the other side of the contract. Don't let him bully you.
3) Walk away from bad deals. Always. You don't need to take every job that comes your way. If the job is nice but the contract isn't, highball them to make up for it.
4) The ideas in your head are none of their concern. Protect them with ample and timely documentation. It may not prove prior art, but it will prove you didn't steal the idea from them.
Don't blame me, I didn't vote for either of them!
A "prior inventions" list is normally just a list of invention titles and a brief description of what the invention does. For example: "Invention: A method for exercising rodents via a wheel constructed from rigid wires. Description: The device is in the shape of a wheel. The rodent climbs inside the wheel and runs, spinning the wheel."
When signing a legal document, it's important to know why the company wants you to sign it. In this case, it's not so that they can take all the inventions you've thought of. Instead, it's to limit their liability to you. What they are trying to protect against is the scenario where you work for them on a contract, and without their knowledge, embed one of your prior inventions into their product, and four years later, when they've become the next Google, you step up and ask for a massive amount of money because they are infringing on something that you wound up patenting.
With that in mind, I suggest that this one isn't worth fighting over. The best way to deal with it is to list everything you've ever thought of, and let their lawyer decide whether he really wants to spend hours going over each one with you. In the end, the lawyer will probably decide that it's not worth while to do so, and you can get on with your work.
--Pat
IANAL but I've been a consultant for almost 20 years. If you are in business as a consultant, the last thing that you want to do is sign an agreement that in any way restricts your right to consult for others in the future (or even at the same time). If you explain it in that way to a potential customer, and they are reasonable, then they should understand and be willng to modify the agreements. If they won't, then they aren't reasonable, and you probably don't want to work for them. It is possible for a client to want your services on an exclusive basis for some period of time, but they should have to pay for that privelege enough to more than compensate for the loss of other clients and work. Most companies won't do that.
IMHO, what the client can reasonably expect is that you not steal confidential information disclosed to you in the course of your work for them (under the usual legal definition of confidential information). It certainly is possible to draft a standard clause that you insert in every contract that protects your rights to do any work you want in the present or future provided it isn't derived from their confidential info. Anything you knew previously should be included in what's protected without disclosing what that is. Any competent IP attorney should be able to draft such language for you.
Make a project on sourceforge called, say, Gramoetric and then just say "All of the code, past present and futere under the Gravometric project."
Done.
IANAL, but if you strike out paragraphs from a contract without the other side knowing from it (ie. if it was already signed previously by the other side), you simply invalidate the contract or worse.
I think you at least need a signature from the other party on the contract to indicate they have witnessed the changes to it.
will these "companies" give you a similar list? I seriously doubt it. nobody in their right mind would do such a thing. also if you disclose something it can invalidate a patent. the really easy way out of this is to assume a legal stance. if they want prior inventions, just list what patents you have. anything else is not a prior invention, but a work in progress. until somthing is 100% done, not 99.9999989 % and fully patented, it is not an invention, but an idea. remember it is not who thought of the idea first that counts, but who patented it first, and there is nothing stopping any company from cherry picking your ideas and patenting the ones they like.
If your consulting company has any value and/or you have any interesting/promising intellectual property - then get a lawyer and discuss these issues now. Since every client slides an NDA across the table for you to sign - you need to have an NDA process that you always follow and never deviate from it. Your lawyer will help you with this. Trust me when I say that it is better to pay one lawyer a few dollars now than a team of lawyers hundreds of thousands (no kidding) of dollars when someone decides to litigate against you. You want to have that game ended before it starts with a quick summary judgement and dismissal.
P.S. The boilerplate lawsuits come from the same drawer as the boilerplate NDA's. You don't have to do anything wrong to get sued. If it serves their interests, they will sue you. It is just a business tool for them to use for control and leverage over you or other strategic factors. They are not innocent when they drop an all-encompassing, vaguely stated legal document in front of you. They paid their attorney to make it that way.
I've been in a similar situation. I'd done some development work for a public (but non-government) body without any such NDA stipulations; the body was then taken over by a government agency which then tried to impose these kind of conditions retrospectively to complete the small remaining part of the work. As soon as I consulted a lawyer they freaked out because their procedures didn't allow for anyone to question their standard terms and conditions, even when they had not applied at the start of the contract.
They certainly had no intention of negotiating and ultimately attempted to redevelop the entire system for themselves (3 people for 2 years) before deciding that it wasn't the job of a government agency to be a software house and so scrapped their development effort. They then went out to buy a different package from a 3rd party over which they could assert no rights as it was entirely developed prior to their purchase of it. As I write they'are at least a year behind in the rollout of this new package.
So don't underestimate the stupidity of your potential clients. They may well be prepared to spend vast sums of time & money and have no ultimate stake in the IPR of their solution provided that they can demonstrate they have stuck to the standard terms and conditions their lawyers worked dilligently to produce.
From my point of view, the fact they walked away was a good deal in the short term: I got more revenue from supporting the original system than I ever expected to get out of the project simply because they couldn't afford to be without it while they figured out how to get rid of me. Bad news in the long term, though, because this is a part of the world where most work is government-funded in one way or another and you mysteriously stop being asked to tender for work if you seem to be "difficult".
How much of a business are you likely to have if you make it a policy not to accept contract of this kind? If you've plenty of other work, then fine; if not, it comes down to your need to feed versus your self-esteem.
One of the things too few people allow for in their business plan is the "fuck you" factor. Businesses tend to be highly geared to secure growth and it can be difficult to walk away from potential clients because you need the money to service your borrowing and pay for your staff. I've always made sure there was a reserve account to make it easier to say "no" now and again. However, there's always some stuff you just have to swallow if you want an income: having a business is worse than being employed in that respect because at least an employee has rights...
Usually that sort of thing is kind of like a pre-nup. They are trying to make clear what each side had before getting together. The assumption is that they will have lots and you'll have almost nothing, so consequently you list all your stuff and assume anything else is theirs. Should there be any "trouble" in the "marriage" it makes clear who had what.
I've signed something like that 4 times in the last 3 years. I write something like the following in that space:
If I get any grief I ask them to write down all their stuff. That usually settles things.
All you get is pseudo informed opinions, guesswork and annecdotal "evidence". Ask you legal council, if you don't have one, find one, If this is the type of thing you are dealing with, hire a specialist. Get one you trust and can talk to.
Look at it this way: what are you planning to do if they ask you so solve a problem for which you have previously found a solution? Since they hired you for your expertise, they can expect you to tell them, in a timely fashion, the best solution you are aware of, even if it is prior art you invented. If you told them beforehand that you worked on this problem and found a solution, then you can negotiate a licensing deal as part of your contract.
On the other hand, if you have NOT told them about your earlier work, then bringing it up only after they have asked you to work on that problem will give the impression that you want to rip them off for work you did while working for them. Naturally, they want to avoid this situation.
Giving them a list of your earlier work WITHOUT TECHNICAL DETAILS is a reasonable precaution against this scenario. However, you need to take additional step in preotecting your IP. Whenever you do work that you might want to license in the future, you need to document this work in a lab notebook (bound book, numbered pages, NO PAGES MISSING). The entries need to be dated, and occasionally cross-signed by someone you can trust (collaborator, spouse, etc.). So you would just tell the company that you worked on cold fusion, for example. You don't tell them HOW you did it, but if they decide to negotiate a license, you then have the lab notebooks as proof of what you did when. You take those to the lawyer who will negotiate the license on your behalf (don't ever negotiate licenses yourself unless you really know what you are doing).
or was it meant as a (obviously bad) joke?
...
Especially the make sure their laywer blah blah blah
if their lawyer is worth the money they pay him/her she/he will understand he'she does not really understand and not sign...
Guys like you are your enemy...
The same rule applies here as in any other connection - for the purposes of signing contracts any non-criminal negotiation is legal. (um, per definition.. how did that come out?)
More specifically, while the tactic of threatening to kill someone's wife unless they sign is illegal, saying "This offer is only valid for the next five minutes" is not.
As a student I had to find a property to rent in the UK at a month's notice. When arriving with my bags at 8PM, I was told I had to leave my bags on the steps until I had signed the contract. The stuff that hate is made from, but hey, to the best of my knowledge not illegal. IAMANAL, so after a lot of other and worse crap I got them put on a university blacklist.
Of course no one here knows the specifics of your case, but this type of clause is in place not to steal your inventions, but to protect both parties.
The company's side: They pay you to help them develop a widgit or process that the company hopes to commercialize. During the process of your helping some valuable intellectual property is developed. Hopefully before the relationship you both decided who "owns" that property and how the company will get to use it - either by taking ownership from you or by getting a license from you for a reasonable cost. Now, what the company doesn't want to happen is to get that far and then have you pull dominating prior Invention #2 from your ass that you've kept hidden from them that prevents the company from practicing the art you've developed with them. This will gum up the whole commercialization process. - this happens a lot and several companies have been burned by it. Thus the company wants you to document related art up front so that the company can take into account that they'll have to negotiate the license of dominating prior Invention #2 in the work contract.
Your side: You have lots of stuff running around in your head or in progress, but it's not protected by a patent or copyright or whatever. You are now entering a relationship with a company that could use those ideas, but are paying you for something else, i.e., the *field* of the NDA does not cover the field of these ideas. If you never disclose these other ideas, there's no issue. But if you do disclose them - they aren't covered by the NDA and you could be screwed. However, if those ideas are specifically stated in the NDA, even if they are outside the field, then you'll be OK as identifying them as covered - the ideas will still be "yours".
The term of the NDA can be longer than 1 yr. That's negotiable. There's also usually two terms - one term during which you both can disclose info (if it's a two-way)- this usually is 1yr with some renewing mechanism. But there's a second term that is the length of time both of you need to hold the information secret - which is usually 5 yrs, sometimes as long as 10 yrs. The company cannot "steal" your ideas after the term. If you disclosed these ideas to the company *properly* you have now forever "poisoned" the company with respect to that idea. Proper disclosure should be explicitely defined in the NDA but usually means in writing on paper (not electronically) with CONFIDENTIAL written on the page and you keeping a copy. If the company tries to patent it without including you, you can go after them. However if you never patent the idea in a reasonable period, the company can, of course practice it - but they can't ever get a patent on it to exclude others without you being named as an (or the only) inventor. I work in R&D in a big company and we are paranoid at getting poisened in this fashion. It's one of the risks that needs to be managed before entering a relationship with smart people like you who can often greatly shorten development time. Of course, if the NDA is two-way the company can "poison" you in the same way - although this is rare since companies don't like disclosing anything outside of the NDA's field.
Disclosure through an NDA does not start the clock ticking for getting a patent - it's a private disclosure, not a public disclosure. However, you do have the risk that the company will publically disclose the idea - they've violated the NDA and can be sued, but you will now not get a patent unless you apply within a year.
In the end, the NDA is just a piece of paper - a good working relationship requires trust on both sides. If you feel the company is going to screw you, don't work with them. If the big company thinks you won't hold their disclosed IP confidential, or will not be upfront in disclosing potentially blocking ideas or art, they won't work with you.
You are required in circumstances like this to list out any patents that have been granted mentioning your name and any pending patents that similarly involve you. This should be a no brainer.
.c program or shell script or perl script that you've written at home or when otherwise not employed is a potential intellectual property invention and not only would need to be listed here, but that it isn't possible for you to be 100% accurate and include everything.
Moving on from that, my advice is to change the wording from saying things like "complete list" to "partial list" and then include major items or those which could be related, in one way or another, to the work you will be doing. If they get antsy about it, point out that every small
Of course if you change words like "complete" to "partial" in your NDA/contract, you must also be sure that you change the contract itself elsewhere if it says "thou shalt not modify this contract" (just cross out these sentences.)
Although this post may sound really cool and insightfull, it shows how dangerous the poster is.
He offers an opinion that a specialist would not dare to offer without propperly looking into the situation...
It getting modded up says more about slashdot than the post...
IGNORE this advice, and get a real lawyer to help you...
Walk.
I know those clauses. The "we own everything you've ever done unless you list it" ones. I'm in the unfortunate situation where it is completely impossible for me to list everything I've ever worked on, so I'm pretty much forced to decline such contracts. As such, I've never signed one.
Personally, such things make me furious. Furious that such an absurd "protection" is becoming boilerplate, and furious that some people sign them without thinking how it will affect them in the future.
Think about it. Do you need the work so bad that you're willing to risk losing something you've worked on in the past that you've forgotten about? Something that might be worth nothing now but could be worth a lot in the future? Want to risk being caught in the firefight between this employer/customer and a past one because you worked on something that they are now both trying to claim? What if you sign two of these things in your life. All of a sudden everything you've ever done is potentially owned by two sets of people, and guess whose ass it will be if they fight (hint: you've promised the same thing to two entities in legal contracts).
If it isn't worth the risk, get a replacement drawn up, or strike the relevant lines. Say that you're happy to work for them but you can not- and will not- sign an agreement with such a clause. And be prepared to be knocked back if they have other options, because they may just want the easy way out.
Or bend over and take it. But please, weigh up if it is really worth it.
I signed on with a company to do in the operating room what I usually do in the lab -- monitor and analyze nerve signals in the body and brain. They wanted me to sign such a clause. I told them that as a scientist I had ideas in all stages of development, from ready to patent to pie-in-the-sky the-technology-doesn't-exist-yet. I also told them that some of my work involved other people, and was on going, and that some of those people had ideas or parts thereof. There was no way as a working, collaborating scientist I could give them a list of everything in my head that might apply, much less those things that might be partially in the heads of those I work with. I'd also asked for a list of all the techniques and technologies they used or were planning to use, and when they balked, explained that that was what they were asking of me. When they provided that, I started giving them some write ups of some of the more off-the-wall but plausible ideas without the pertinent details which definitely were outside their field. They were satisfied to accept that NDA clause amended to specify anything that I came up with which came directly from working with them and pertained directly to the work being done. That left it up to me to keep anything to myself which I'd already thought of that might apply, or else contribute it if I wished. It helped that I had publications to point to which contained novel ideas (patentable, but written up as science and allowed to propogate as such) which proved I was capable of coming up with stuff. They were willing to gamble I'd do that for them and let them have them. I would have too. I came up with one while in training, but decided that starting at 4 A.M. and standing in the O.R. for anywhere from 4 to 16 hours, and being on call constantly, was a job for younger people. So I forgot the idea and left. There's always more ideas.
"I may be synthetic, but I'm not stupid." -- Bishop 341-B
I own a small business as well. I'm listed as a member, and also as an employee. Since I'm an employee of my own company, I have signed NDA's with the board. So, when it comes to disclosure, I simply refer to prior NDA's I have, and let it rest at that. I have not had a single issue with any contract I've signed because of it.
--- http://www.keything.com
IANAL but I've done this too. If you must make any change like this to a contract, both
parties should sign the changes, but as a minimum, make sure you:
(a) Initial, or sign, your changes
(b) Keep a 'photocopy
Otherwise, how are you going to demonstrate what you changed?
Reduce, reuse, cycle
Every time I've ever been asked to make a list of my prior inventions I've written down something like "System and Method of Manipulating Data" figuring that in the extremely unlikely event the issue both came to litigation and the ridicululous document were enforced, my last resort would be to claim that I had in fact declared whatever invention it was beforehand. The one advantage that you have is that just as the average person just signs it without understanding, the average company who makes people sign them just blindly accepts them back without reading or thinking. I've put down responses like this on probably 15-20 documents and always been handing them back inside a giant stack of lame legal forms. I'm pretty sure none of the recipients have ever actually read the answers I wrote down.
Real NDA's which is a BIG standard practice prevent you from talking about work for other contractors. If you are legally obligated you can't contract with companies requiring disclosure. If other fouls are signing that's their problem. Your a foul if you sign.
Translation, life isn't easy. It's part of your work to find reasonable customers.
I have a question for you:
Why the *hell* are you asking Slashdot instead of consulting your lawyer?
Just curious. Sorry for yelling.
Tom
Real problem of Patenting something in US is, you don't have to really have a working model of what you are patenting. Most other countries require working prototype with the application. Just very rought abstration is enough. One could patent breathing for christ sake.
These NDAs, uncompensated non-competes, and overly-broad created-works clauses are a big concern to me.
To me they boil down to:
"Tell us everything you are working on so we can take it if we want"
"We can control your work even after you leave our company and we are not going to pay you for it."
"Anything you think of or build belongs to us"
Last I checked I was a free American, not a slave. I would rather work for myself and be poor that have to deal with that crap.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Find: NDA Replace: Non-disclosure agreement Find and Replace Complete. It seems that the only posts I make lately are the ones bitching about misuse of acronyms. They should be defined at least once at the beginning of the summary before using them. This is common sense, please abide by it.
nothing
I have found that disclosing some prior art that is incorpated into the product I am selling is effective. This is the relavent information for the customer anyway. Documenting all developed inteletual property is a good idea. Paper copies print outs of flow charts, schematics, or drawing are effective for this.
Just put in a nice paragraph saying that you have numerous prior inventions in areas including but not limited to blah, blah, blah.
Leave it at that and see if they accept it. If they want more, then give them reasons verbally why you can't give them more: too numerous to list, confidential and proprietary, many are irrelevant. Possibly negotiate to narrow the field to certain areas, such as inventions related to power supply design. Then if you have inventions in that area, add some text that says, "Inventions in the area of power supply design include but are not limited to blah, blah, blah, and several additional inventions that are proprietary, confidential and have not yet been publically disclosed."
Finally, if that still doesn't do the trick, if you are willing, add proprietary and confidential inventions to a separate addendum marked PROPRIETARY AND CONFIDENTIAL.
In the end, if you can't reach an agreement on an acceptable level of disclosure, then let them know that's the best you can do, and let them decide if they want to hire you anyway or find someone else.
The risk to you of course is that if they hire you, anything you don't list they could later try to steal from you. So either list it or leave it as open ended as possible.
Vagueness is good but codenames are not. It will never hold up in legal discovery because you will have no documentation on projects with those codenames. Be vague, but skip the codenames.
Guns don't kill people; Physics kills people! - John Lithgow as Dick Solomon on Third Rock From The Sun
"Unfortunately many companies are not willing to strike this clause from their contracts."
Am I missing something? It's a straightforward business decision: If the client is unwilling to strike the clause from their contract, and you are unwilling to accept that, then don't sign the contract and don't do business with them.
The only unfortunate thing about it is not getting the money that would have resulted from the contract - but why would you want to contract under unfavorable terms?
My company does exactly the opposite, with one clause: Any code we produce under contract is owned by the customer, but we reserve the right to excerpt algorithms or functions for reuse in other code (under contract or not). There are a couple of big advantages to that:
Keep a notebook with your ideas with dates. Then should something ever become disputed because you didn't disclose it, then at least you have some documentation that you thought of it prior to working for them. This is of course in addition to other advice you may get here or from a real lawyer.
Why don't you just agree to list your prior inventions on a sheet, put it into a sealed document, and have it held by a trusted third party (a lawyer, a bank, a safe deposit box, etc)?
If there ends up being a dispute over whether an invention was something you already invented, you, knowing the contents of the list you created, can show the other party, or a court, just the relevant part of that sealed document. The rest of your secrets are not exposed and you have some pretty strong evidence if you need it.
I'd certainly make sure to make some representation that your list is not exhaustive, though.
I treat it just like any other bid--I make an offer; you accept or make a counter offer; repeat until we both accept the contract.
This is not somehow unethical or sneaky; this is how business is done.
Typically, all the hiring/contracting department cares about is "Did we get the NDA back?"
Great. Check that one off and move on.
In my experience, the modified NDA is accepted without comment. If it ever becomes an issue, we each have our copy of the signed agreement.
The purpose of the NDA is not to protect the Client's legitimate rights.
If I try to take what's already theirs, their lawyers have no problem defending them against one little ole contractor.
The purpose of the NDA is to end the dispute without involving the retained legal department or firm by moving the burden of proof to the other party .
If I was in a financial bind, AND this was the only available gig, AND the prospective Client took the time to review the returned NDA, AND the Client wouldn't take the time to negotiate the NDA...
That's a 3 anda so far. Hasn't happened yet.
"Reality is that which, when you stop believing in it, it doesn't go away." - Philip K. Dick
Keep in mind the "do it yourself" route is a perfectly fine way to get a U.S. patent if your idea meets the requirements of the patent process. You'll be able to put it on your resume, on your product, your web-page, your blog, and a nice plaque for your wall. All very nice things. If your ideas and patents are commercially valuable ones, you might even be able to show them to vulture, er, venture capitalists as part of your pitch to get funding.
What you are paying the patent lawyers for is, in principle, their ability to help you craft the claims so as to maximize the coverage of the patent to include as full a conception of your invention as possible, properly using the peculiar jargon specific to patents, while avoiding making it so broad as to be invalidated by prior art. You are also paying for their experience in recognizing how other competitors might try to invalidate, circumvent, bypass, or otherwise make your patent useless in practice, and for advice on what to keep as trade secret rather than disclose in the patent. Finally, you are paying them for their experience or international partners to get through the foreign patent process, which has different rules and processes for each jurisdicition.
That said, even if you get a patent, all it does is give you the right to sue someone who is using your patented invention. It does not guarantee that someone will not just use it anyway, and it does not guarantee your suit will succeed in preventing more grief than it causes.
Unless you are, or are planning to become, a corporation using a patent portfolio as part of its strategy, or doing it for marketing/vanity purposes, it's probably a waste of money and time to patent anything on your own.
ANAL but I have 5 patents. I am also in the same situation with many patentable ideas that existed before my employment NDA was signed, and my company has a similar line of products. It is a sticky minefield but here is what has worked for me:
1. Thoroughly document your ideas even if they haven't been reduced to practice yet. Have hard copies notarized to establish the date of invention. Remember the US patent system works on a "first to invent" basis.
2. Do not disclose your ideas to ANYONE in the company.
3. If you believe your idea has significant market value (worth fighting for), write up a provisional patent application. This is cheap ($100 app fee I think) and it gives you one year to refine and submit your final application (~$700 in fees). Use the format from other patents as a template. You don't need a lawyer unless you want to fight with someone you think has infringed.
HTH
mAC
Try to find a definition that groups all of your waking inventions, incomplete or not, while trying to be as specific as possible. If the general definition given does not conflict with the company's model, they will not likely ask for more information.
Example: "Realtime PTP/Multimedia/TV applications" is probably fine if you work for a hard drive maker.
You can't leave it hanging!
Sometimes contractual clauses are ambiguous or subject to more than one interpretation. In that case, the clause means what the parties think it means - even if the clause would never mean that to a third party. If the parties disagree, the clause is generally construed against the drafter. So, if you, as the drafter, wrote a clause that is subject to more than one interpretation, it does mean what the other party thinks it says.
I am a lawyer. This post is not intended to be legal advice. If you have a legal problem, consult an attorney and explain the details of your situation.
My hamburger hearmuffs will be in stores before he can figure out the pickle matrix.
Professor Frink.
Fundamentally I don't think people should sign such things. Many often do because (1) everyone wants you to sign it (we're hungry for work!) or (2) they think that many scary parts of the larger agreement are basically unenforceable in their state.
1 and 2 may both be true, but are you still willing to knowingly sign your soul over for whatever meager salary or fee you are drawing? I was recently presented with an offer for a Senior engineering position at a startup. The offer letter included a pretty sizeable chunk of options as well. I denied their offer because their inventions agreement was something I'd never sign, on any planet, any time. It required that I acknowledge that they own any kind of creative work _at all_ that I do while I work for them, and _anything_ remotely connected to their business for a year following. I would be required to keep an accurate list and immediately tell my manager about all inventions even after leaving the company. It would state that I immediately yield all patent and copyright to them, and that they could sign any document on my behalf necessary to see those rights through.
What do they grant you in return? 1 page of small lines to document your entire inventive history. In an age where there are greedy f*ckers trying to own ANY small idea they can get their hands on, this kind of thing is TOTALLY unacceptable.
There are some ways to fight this. The first and most IMPORTANT one is to NOT SIGN. Every time someone signs one of these agreements, the entire industry of workers loses that much ground. People can't force these on you if no one will sign them; the only way they can do it is because it's "standard".
The second one is to find a trusted friend. Every time you have an idea of some sort, write it down and mail it to the friend. (That is, pen and paper / printed and snail mail). Your friend should lock the letters up in a fireproof safe. This should keep a timeline of your inventive history, which may be useful to prove that you didn't create something as a work for hire, if anyone should ever decide to try and pirate your creative works for the purpose of creating captive Intellectual (nonsense) Property.
Another thing I would advise if you do contracting or consulting is to have your own agreement. It may cost you something to get one written, but you don't want the terms of the agreement to be totally specified by your customers. I'm not a lawyer and so if I did this I may get different advice from a lawyer, but I would want my agreement to be straightforward, clean, short and reasonable. Agreements are often drafted to be the biggest bullet-proof "f*ck you" document you can possibly make. No doubt you've come across these.
Just remember - never sign something you are not willing to faithfully execute. Not only are you screwing yourself over, you're making life harder for the rest of us as well by legitimizing the practice.
Because you signed it. If you sign a contract, it is presumed you understood what you were doing and becomes your burden to proove otherwise. This is a difficult, expensive, and time-consuming level of proof to meet. You can't just say, "I didn't understand it" and expect a court to rule in your favor.
Can the employers insist that you sign it without giving you time to properly review it (even without a lawyer)?
They can. They shouldn't, but they do. And if you give in to that pressure you might have an argument in court, but you'd still have a hell of a time proving it. And the deck would begin stacked against you because you had signed.
Because I would consider an employer insisting I sign a contract and denying me the opportunity to review it an abusive employer. But moreso, such conduct would seem to render the contract unenforceable. Can such employment contracts signed under such conditions be upheld by US courts?
Yes. Don't work for sleazebags. You are correct that some kinds of high-pressure tactics can render a contract unenforceable, but the person breaking the contract has to prove their case. How do you think you'll be able to prove it if it's just your word against theirs, and they have a contract you signed?
I am a lawyer. This is not legal advice. If you have a legal problem, discuss your situation with your own lawyer.
Really.
Take the NDA (form document). Strike out, and initial, the clauses that are offensive to you. Sign and return.
If they don't "notice", it's good. And, a lot of the time, they won't.
I struck the "prior IP" and "stock trading blackout" clauses from a contract. It went through.
If it doesn't, the updated contract becomes a point of discussion.
Ratboy.
Just another "Cubible(sic) Joe" 2 17 3061
First of all - standard disclaimer - IANAL, etc.
Secondly, given that they are asking you to disclose all of your prior inventions/etc, I would say that it would only be fair if they were to do the same for you. If you are required to disclose your works, which they could potentially after the designated period exploit and profit from, it is only fair that you be afforded the same opportunity. (This alone will likely make them drop the clause.)
If they still insist on having the clause in there, then insist on the time period being indefinite or until the originating party does perform public disclosure - this in addition to the above.
These two should (and remember IANAL, but it seems reasonablely so) protect your works from being stolen by them. It also gives you information that you could use as recompse if they do try to exploit your works.
Granted, you may not have the legal backing that they do, and may thus not be able to fight it as easily or for as long, but its one step closer to giving you a better legal footing.
Also, from what I understand, you are free to strike anything you desire (initialling them to denote that you did the striking) from such contracts before you sign. They would then have to either sign after you or initial such strikes with you (i.e. you both initial the strikes, thus denoting both parties accept the changes).
And remember, IANAL so take this with a grain of salt. This seems reasonable and is likely what I myself would do if faced with such a situation.
Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
> A contract holds you to what it says, not to what the other
> party think it says. Always.
The contract holds the two parties to what they mutually agreed that it meant at the time it was signed. If it can be demonstrated that there never was a "meeting of the minds" then the contract cannot be enforced.
Point out to them that if they use any ideas on that page that have been or later will be patented, there's written proof that they knew of the idea before/when they used it - which means the patent owner can get triple damages from them. This turns out to be a major unintended consequence of NDA "list all prior inventions" requirements, has burned companies in big ways already, and is why smart tech companies are actually removing such requirements from their NDAs now. Ignorance is less of a liability to the company than having some piece of paper buried in their files that counts as prior knowledge.
(Of course, you will keep a photocopy of everything you submit to them, so you'll be able to show the court your copy, just in case the company facing triple damages conveniently loses theirs...)
Yes. List every recipe you have ever created. Have any funky dance moves? Put them in there too. Strummed some funky tunes on your guitar? Throw them in. Crap flood the document so they can't find anything of value.
This prior art clause sounds like a deliberate sabotage clause in the contract. Strike it out immediately and let the employer know you are not amused and consider it to be bad faith negotiation. It's an attempt to get you to make a static list of dynamic ideas, so that they can sue you later, if they choose to. The basic idea is that in the off chance that you make a lot of money after working for them. So it's simply stupid for anyone to sign any contract with that type of clause in it. It's only purpose is to screw you over in the future, because the company doesn't trust you but they want you to trust them.
Always remember, corporations are bound to one master and one master only: profit. Do not ever sign a contract that requires you to list all of your ideas because on the one hand you are effectively giving the company your inspiration and on the other humans aren't perfect you will forget something and if that's the idea that takes off and you make enough money to make it worth their while, the company will sue you for every single dime you made. And you'll have already given them the evidence that allows them to sue you.
Fanatically anti-fanatical
"None Declared"
(Don't mind me, just spouting ideas here so I don't forget them... though I encourage comments/thoughts/idea/etc.) Could such a site also be used to document prior art for existing patents (like one-click payments...), giving a good source of information to patent lawyers and the like?
For all projects just write down things like "Project Bluebird", "Project Goofy Dog", and "Project New Orleans". When they ask, claim that due to NDA's you have signed with other clients you are not allowed to discuss the nature of these projects. How can they complain?
"That's not fair! We want you to tell us all your secrets but you're not allowed to tell anyone else about our stuff because it's super extra secret."
It's not uncommon for overbroad oppressive contract clauses to arise because the other side's lawyer is afraid of something and doesn't know exactly what it is.
Then the lawyer drafts staggeringly broad clauses to try and hit the spot, covering whatever it might be that he's trying to feel for in the dark. It ends up covering a lot of what might not be, as well. Maybe even then it still doesn't hit the spot for the client.
The kind of clause that's currently bugging the parent poster can possibly be inspired by a scenario like this -- the key is not so much prior art, more like prior rights:--
Consultant works for client #1.
Client #1 requires assignment of IP rights for the work product.
Consultant plays ball, and gives assignment to client #1.
Client #1 may get a patent for it. The patent claims could be broader than the specifics of what consultant has done for client #1.
Same consultant then starts talking to client #2.
Client #2 probably knows or expects that consultant works in related fields for other clients before, and expects other clients have taken assignments of work product.
Client #2 then worries: Am I free to make use of what consultant will do for me now? Did client #1 already take an assignment and get a patent covering it, or could client #1 be just about to get one? So where would that leave me client #2?
The problem for client #2 is partly that the patent could be broader than the specifics of what consultant did for client #1. That can leave it in doubt whether consultant's work product for client #2 will be covered by the rights arising from the assignment already given to client #1, potentially leaving client #2 in deep doodoo.
So, client #2's lawyer tries his best to think of something:--
Does he ask consultant to promise that there isn't a right arising from consultant's earlier work that will catch client #2? (That's not much good, because even if consultant does give that sort of promise, it still won't make the feared patent go away if there is one.) So does he ask consultant to tell him _everything_ that consultant did before? Maybe that's a bit better from client #2's pov, because client #2 now gets a chance to evaluate the situation of anything done for previous clients if it looks dangerously close, but it's still not a perfect solution, it still won't make the third-party patent go away if there is one.
In fact I don't think there is a perfect solution for client #2, he may be able to reduce his risk by getting and evaluating various disclosures from consultant, but that's all.
Meanwhile the consultant is feeling threatened by all of this stuff. So what does he do? Maybe it could help to ask the client 'what are you afraid of here' and try and work something out. On the other hand, if the client has been panicked by the lawyer and says 'I must have this clause', without really being aware of what it's trying to achieve, they could easily just get into a stalemate.
Not giving any assignments or exclusive licenses, to anybody at all, could be a good solution to this problem from the consultant's pov -- if only he can persuade the clients to play ball with that.
Otherwise, I don't know of any good solutions, except for the consultant and clients to know each other and their work really well, and get confidence in each other that way.
Best of luck!
-wb-
My advice, if they want you, setup an LLC, and have them sign a contract with your LLC. The LLC should be hired to provide consulting and integration services, and you license your code to them under BSD style terms. It's what I do. I retain the rights to the stuff I write, and they get the freedom to do what they want with it. I can reuse it later, and license it to others. Also have each of your employers sign a "cross licensing agreement" where by you agree not to disclose any IP from their company, but any techniques or technologies you develop in conjunction with them are licensed such that you can use them again. In this way, you provide a greater value-add to each "employer" as you can now legally use what you learned elsewhere.
The key is to make sure that your potential employer realizes how much they lose by forcing you to sign a draconian ip disclosure statement.
I have a NDA signed with myself/my company that states I will not for the next 25 years disclose or cause to be disclosed any ideas that are not brought to market for any reason except for the development of those ideas.
If a firm wants a list of my ideas I give them a copy of my NDA and say "Sorry, I can't disclose that information"
Never had a company freak out over it nor have I lost a client over it.
-- I am the NRA, enough said...
Reading at "score 5" I'm really shocked at how much bad law is being thrown around here. From misunderstands of what "public domain" means, to what prior sale under patent law, to the basic reason for such a clause to exist. I am almost a lawyer (waiting for bar passage results) but as what I'm about to say does not pertain to specific facts, this is not legal advice. (side note, those of you who give advice on specific facts and then follow up with IANAL are breaking the law against practicing without a license).
The prior invention clause is there to reduce discovery costs when you come out with wizbang B which seems a lot like wizbang A you were working on for the company. See, if you can make a defense of prior invention or independent source, you haven't violated the NDA. What they want is a list of everything you've done up until now so when you come out with wizbang B and it's not on the list, they have evidence that you violated the NDA. It's an easy and hassle free way of avoiding lengthy and expensive discovery.
Now, as for your best response... seems there are two good ways to handle this generally depending on what you are worried about:
1) provide the list but state clearly states this is a non-exclusive list and you retain all rights and defenses under prior invention and independent source. This essentially cuts at their ability to claim you stole from them. Best route if your concern is being sued for later competition.
2) require mutual NDAs that require they not disclose anything you disclose in your list. Best route if your concern is they are going to rip off your idea. The original submitter indicates that the NDA only holds for one year... that's not true! Things like non-compete clauses will hold for around a year, but NDAs are forever unless otherwise stated. It's the whole backbone of the industry.
For both options you should retain a lawyer who could draft up a reusable documents for future instances of this problem
Only 120 characters... who can summarize their entire world understanding in 120 characters?!
Listing prior works in an NDA or in a contract of employment protects THE EMPLOYEE just as much as the employer. The purpose is to define what works existed prior to employment, such that the employer cannot claim ownership of those works.
Consider that many contracts contain clauses that state that any inventions during their employ, on or off site belong to them. So having listed those prior works, you essentially exclude them pre-emptively from any claims the employer may have against them.
IANAL
10 minutes of time out for you!
Mom
If both parties agree that it has a specific meaning the court will interpret it that way --
even if the text says something different. The thing is both sides have to agree on that
meaning. If you don't have the interpretation in writing then good luck showing that.
Yet another example of lawyers perpetuating spaghetti law.
I say NOOOO WAY!!!! and still make a living.
You do not need to detail every invention, just cut-and-paste their own catch-all ownership phrases "ownership of... all ideas... first born son..." and flip it around back at them in the clause. After all, they are refusing to provide a detailed listing of their own patents, copyrights, ideas, etc. Some will accept changes... some will reject the changes... some will reject but then forget about the NDA altogether leaving you free and clear to do anything you want.
From those that reject my cut-and-paste (from their own wording) catch-all NDA exclusions, I commonly get "When we outsource to China or India they sign it...". At which point I respond, "WOW! I was not aware that you had political influcance with India's government and China's communist party... after all that is the only way to enforce international contracts there. Wouldn't you rather have a reasonable contract that is enforceable in local jurasdictions?". Then most change their mind and hire me anyway.
Personally, what I find most offensive is the latest spaghetti law in contracts of signing over "Power Of Atterney". If you do not know what that means, in summary it means a company can sign your name to ANY legal document they chose. And you cannot depend on a paragraph header description to limit the context of the paragraph, because headers are usually thrown out and excluded from the contracts definition in court. Oh and some states have it where once you sign over "Power of Atterney", it is nearly impossible to get it cancelled.
Hope this is helpful.
Ciao
I recently took a short term contract position with the US Army Corps of Engineers in Huntsville, Alabama. I was working for a sub of SAIC. As I processed in the President of the USA decided to cut the positions of anyone coming in so BYE! Not fun! A week later the contractor observed that they had missed me signing a bunch of papers. So I came in to expost facto fill out the pre-employment agreements. I hit the NDA and such and started reading and wrote across the top NOT NO! HELL NO!. I explained to the people that I was working on some very important inventing when I took the job. Their agreement gave them rights to every invention on or off the job even if not related to the job that I worked on during the time I worked the job. I told the contractor that for less than 2 weeks work SAIC didn't buy rights to my project and frankly their company was not worth enough to buy out the patent so unless they rewrote the NDA and such they could forget it. This really sucked for them to ask such because I wasn't even working for SAIC except indirectly.
Read those contracts people! (SAIC's contracts STINK) Honestly I think that any employer who thinks he buys invention rights from people who earn less than 7 figures is probably taking advantage of people. Any employee who invents for such people is a smuck.
Never Politically Correct ~ I prefer the facts If you don't like what I say, get a life, or comment yourself.
Even Microsoft, with a warchest of billions of dollars, can and has lost patent lawsuits. They lost one early this year when a programmer in Latin America, I don't recall his name or what country he's from, sued MS over an idea he had that he shared with MS and asked if they wanted it. They said no but then used it anyway. Maybe someone else here knows what I'm talking about. Admittedly it doesn't happen often but it does happen.
FalconShould there be a Law?
If I remember correctly, as part of the BlackBerry lawsuit, a consultant was hired by NTP to go over his prior work with pagers. NTP had him sign an NDA. The consultant couldn't figure out why the hell NTP would hire him, as his work tended to show that RIM's positions were valid.
..."
In any case, money was money. Essentially, he signed the NDA, NTP paid him, and then they said "now you can't tell RIM what you know
Essentially, they simply hired him so he would sign the NDA, then RIM could not find out about what he had done. As such, RIM could not use his technologies at trial against NTP.
Only if you've managed your finances on the premise that you would never go a week (or *gasp* months) without a paycheck. It's called a rainy day fund. Your company has one. I have one. You should too. No one is responsible for your life except you.
Actually your rainy day fund is supposed to be six months or more. Somwthing like 3 months ready cash and a 3 month cd. Or if you've got enough 1 month cash and 2 3 month cds staggered, ie the second cd three months later than the first.
FalconShould there be a Law?
This is what unions are for. When you can't beat them alone, you join forces with your fellow workers and do it together. Of course americans abhor unions as communist inventions, etc. but really, it is the only legitimate way to reconcile differences that would otherwise bankrupt individual people.
And of course you need to elect people who aren't likely to be bribed or misuse their power in the union.
I think we in IT are still rare enough not to have to roll over when companies pull this kind of thing. If a company doesn't want to strike the clause, don't work for them; if enough of us do this, the clause won't be so popular. All they'll get are second-rate consultants.
It's all fun and games until someone puts an eye out.
...all I can say is that if you're a nerd (techie) and you cannot make yourself indispensible to your employer, then they have the upper hand and look out!
I had a very amusing contractual experience in which my employer's project was floundering and he could no longer afford to pay me. I had mercy on him but indicated that he would have to make me a partner and pay me in stock (probably worthless but a gesture at any rate) in order for me to continue with the programming.
So I received a contract to become a partner; it specified my stock (x number of 'founder's shares' whatever that might be) and went on to attempt to lock my services in for a number of years at a really low wage and further appended an NDA that would pretty much keep me from working on anything else for 2 years.
I had a really good time talking with the company lawyer, who considered herself very slick and never imagined I would either read or understand this fine print. I can remember telling her that discussing my wages with a company that couldn't pay anything at all was moot. I'm sure our conversation was the first time she was ever at a loss for words. It made me wish I'd gone into law instead of CS (and that's not the last time for that thought).
IAAL but TINLA, get legal advice from a paid lawyer, etc,
My advice on these causes is "no way, no how". These clauses seek to preempt the real facts in any dispute, and if you are the sort of person who comes up with commercially exploitable ideas it is extremely likely that any list you provide will be incomplete - especially if you are in software development. Unless you are certain you will never exploit any of your prior ideas, you need to be treating clauses like this as a deal-breaker.
If that clause is in there, the rest of the contract is likely to be bad for you as well. Most likely it will try to lay claim on every idea you have during the term of the contract (although this may be hidden in terms that make it seem less severe), include confidential information provisions that are way too broad or define "confidential information" way too broadly, and include non-compete clauses that are also way too broad. If you see one of these "list your prior inventions" clauses, treat it as a gigantic red flag being waved violently in your face - retain a lawyer to review the thing and properly advise you.
More simply, these things were written by lawyers advising the customer/employer, and not only will they not be looking after your interests, they are professionally forbidden from doing so when acting for the customer or employer. If you don't get your own legal advice, expect to be screwed.
It is not your employer's fault that you have no financial plan that accounts for a job loss. Jobs are lost. Deal with it. Plan for it. Stop whining about it.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
As a European, we read in our history books that slavery was abolsihed in the states in the 19th century. Apparently you have reinstated it... (I am not only talking about the IPR stuff, but generally.. 12 days of vacation?? fired without notice? without a stated cause??)
Here are a few sections from an onerously written agreement given to employees in a shop with no existing NDA:
All inventions or other creations, whether or not patentable or copyrightable, and all ideas, reports, and creative works, including, without limitation, computer programs, manuals and related materials, made or conceived in whole or in part by the Employee while employed by the company, which relate in any manner whatsoever to the business, existing or proposed, of the Company or any other business or research or development effort in which the Company or any of its subsidiaries or affiliates engages during the Employee's employment with the company will be disclosed promptly by the Employee to the Company and shall be the sole and exclusive property of the Company. All such works that may be protected by copyright shall be considered "Work Made For Hire." Recognizing that any such work may be determined not to be a Work Made For Hire and to protect the Company's sole ownership of all such works, the Employee by this Agreement assigns all of the Employee's ownership, right, title, interest, copyrights in such works completely and exclusively to the Company. The Employee shall execute and deliver any instrument or document and shall do all other things the Company reasonably requests (both during and after the Employee's employment with the Company) to confirm the Company's complete ownership and to enforce the Company's ownership rights in any such Work Made for Hire, ideas, concepts, products, processes and/or other creative works.
(i.e. Anything we can tangentially relate IN ANY WAY WHATSOEVER with our business interests is ours.)
Best Interest. The Employee's services performed for the Company and its supervisors, employees, clients/customers, and others, and the Employee's representation of the Company regarding clients/customers and the public will in all events be consistent with the policies, procedures, and standards (oral or written.). The employee agrees that in all aspects of his/her employment, he/she shall comply with the policies, procedures, and standards (oral or written) of the Company as established from time to time. The Employee shall devote substantially his/her entire time and energy and shall use his/her best efforts to fulfill faithfully, responsibly and to the best of his/her ability the Employee's duties and to promote the business and interest of the Company. The Employee shall comply with all federal, state and municipal laws, statutes, ordinances, rules, and regulations relating to his/her employment.
(Slavery clause? Thought you were going to eat dinner and read a book tonight? Ha!)
No Employment Agreement. The employee agrees that the company is not by reason of this Agreement obligated to continue the Employee in the employment of the Company for any specific period of time or term.
Assignment of Rights and Obligations. This agreement shall be binding upon and to inure to the benefit of the Company, its successors and assigns. The Agreement shall be binding upon Employee and his/her heirs, personal and legal representatives and guardians and shall inure to the benefit of the Employee. The COmpany may assign its rights or obligations under this Agreement, in whole or in part, at anytime after the effective date without advance notice to the Employee; the Employee may not assign the Employee's rights or obligations under this agreement.
(Isn't that what everybody wants - to bring into the world a child with DRM encumbrances)
Indemnification. The employee will indemnify the Company and its directors, officers, agents, employees, heirs, successors and assigns against any lawsuit, claim, liability, fines or expense (including reasonable attorneys' fees, court costs and any judgment) which results from the negligent acts or failures to act by the Employee.
(Barely know what to say about that one. So utterly ass-backward.)
Some of these companies are really bold. I can't imagine why anybody would accept such an agreement...
Nor would i sign one that gives them rights to things i do after hours or after employment ends.
While on the job, its their stuff, they paid for it. However, while on my time, its my stuff.
---- Booth was a patriot ----
Do not sign such an agreement. Maybe the manager you're currently working with has only the best intentions, but be assured, many people at that large corporation really haven't. And there's always the possibility of your relationship going sour in the end. If something like that happens, you'll get screwed in one of both ways:
Idea harvesting
If you're doing anything remotely interesting, they'll harvest your idea and patent it. Chances are, some of your ideas are related to whatever you're doing for the company. So they can not only take your idea away from you, make you hand over anything you've done so far and send you a cease-and-desist letter preventing you from working on a related idea - they can also make a handy amount of money off your work.
Use the stuff you forgot to mention
It's nearly impossible to mention anything you ever thought of in this list and do it in a legally binding way. So it's going to be really easy for this company to prove something _you did_ belongs to them, especially if its not mentioned on your list and touches work you did for them in any (however small) way. The implication here is that if something isn't on the list, it's going to be theirs by default.
Also keep in mind, that most NDAs come with an expiration date - after that date passes you'll lose any confidentiality you might have believed you had. The company's ideas, however, remain protected through copyright, trademark and patents. So in essence, the NDA expires unilaterally thereby screwing you further.
Yeah, I know, these are worst cases. Maybe only one in ten programmers will get screwed. But do you really want to gamble around with your intellectual property like that? If you can afford it at all, don't do business with these companies. Do business with their competitors whose NDAs are limited to whatever you're doing while you're working for them. Anything beyond "keep our stuff to secret" is legally superfluous since the company's products and ideas are ALREADY protected by other means.
Don't walk into those legal traps, you're just inviting people to screw you over. Keep contracts and agreements as simple as possible, and you're going to be fine.
The "dickhead lawyer" happens to be Corporate Counsel- and he did it on the instructions
of the CXO crowd in almost all cases. Most lawyers know for a fact that this is NOT the
way to win friends and influence people- and they also know that these things are pretty
much bogus the way they are written and the management insisting on you signing the damn
things without any further discussion indicates the PRECISE thing I told you. It's a
corporate culture that you typically do not want to be a part of.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas