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?"

Comments

Can you post a sanitized version of the clause?

[petard]

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 If they really want a list of unpublished inventions as well, maybe you could extend the term of their NDA to something insane like 10 years?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.

Re:Can you post a sanitized version of the clause?

[jours]

Here's a sample of a 'prior inventions' clause: http://www.rhs.com/web/blog/PowerOfTheSchwartz.nsf /d6plinks/RSCZ-6NY3U9

Like this guy says, I don't see how I could sign this, especially if I'm working with other customers at the time.

Re:Can you post a sanitized version of the clause?

[simong_oz]

Software is usually covered by copyright law, not patent law. It is rare (except in the US) for software to be patentable, so by default, if you create the code, then you get the copyright automatically (and hence the IP).

Many companies will not hire consultants unless they get the IP out of the end, and most are happy to limit this to the IP they actually paid for (although some will try and slip clauses like "future/past IP" in as well so watch out).

Re:Can you post a sanitized version of the clause?

[Gr8Apes]

IANAL, of course, but that 2 year after period clause might be hard to enforce, especially in some states. Texas, for instance, routinely holds those types of contractual clauses invalid as interfering with one's right to work.

Re:Can you post a sanitized version of the clause?

[Svartalf]

Eventually they don't. My previous day job (not the current one) is probably going to find out
that their dismissal of me is going to be very unpleasant- because they can't prove that I was
dismissed for NOT signing one of these things and worked over a 12 month period for them.

1) These clauses, typically, are unenforceable- they only have rights to what is relevant to them.
2) Typically, they're bundled with a Non Disclose/Non Compete- this is an IP assignment agreement;
you're really not supposed to combine them and if you do, expect extreme difficulties in enforcement.
3) Typically, they're popped on you right after you've accepted the job- they can't legally make
your employment conditional on the signing of that document unless it's stated in the job offer that
you have to do so. The "everyone does this" line is bogus- the law's pretty specific on that one.

No, I'm not a lawyer, but I'm about to get into a deal with a previous employer over the matter.

My advice (such that a Slashdotter's advice on matters Legal would be...) would be to consult with
a lawyer ASAP on the matter- and more probably go looking for work elsewhere. It's pretty much
a constant that the company's been given bad advice from an IP attorney or they're just plain flat
greedy when it comes to Intellectual "Property", thinking it's like gold or oil. In this case, the
people aren't going to be pleasurable to work with because they're also clueless in almost all other
matters as well.

Just strike the clause

[patio11]

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).

Re:Prior Art

[Aneurysm9]

If my memory of Patent Practice and Procedures serves correct, only publicly disclosed inventions can be prior art. Inventions disclosed under an NDA would likely not be considered public and, thus, could not constitute prior art.

Re:IANAL

[damsa]

I am a lawyer. Seeing how you spelled civilized, I see you do not live in the USA, a potential employer in the US can and do hand you a contract and sign now or sign out. There are a certain juridictions that are an exception to this rule.

Re:I signed one

[hyfe]

I asked my would-be employer about it,

A contract holds you to what it says, not to what the other party think it says. Always.

Re:NDA yourself

[vodhner]

While laid off from my software development job in 2001 and 2002, I saw two really excellent NDAs.

The one for my "night job" acknowledged that, like every programmer, I probably have a portfolio of commonplace utility routines that I will carry away from the job as long as it is not specific to the application being developed.

My full time employer's NDA allowed me to do any unrelated work, as long as it was not for a competitor and not directly applicable to the employer's field. I did in fact continue the Night Job for a while.

Both of these agreements carefully limited their IP interest to what was specifically related to the business and applications in question.

But -- while I was laid off during 2001 - 2002, I met the NDA From Hell, and this was for a clerical staffing-agency job for a prominent bank, at $12 per hour!

This little one-paragraph statement was delightful. I was to sign over exclusive rights to all software creations I had ever produced, or would ever produce in the future, under any circumstances.

The job in question consisted of phoning mortgage customers to fill in missing details on their applications. Um, hello?

Fortunately they did not ask for a list -- that could have been quite an exercise, since I've been coding for 35+ years. But actually the list is very short: everything I've written has been work for hire, copyrighted by the client company. I don't own anything I have produced.

Yes, I signed the silly thing. If I ever write anything that is of sufficient value, they may notice this and come after me.

I'm sure they are watching my every move.

Just striking won't do it

[Anonymous Coward]

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.

Re:Actually

[Anonymous Coward]

Actually, there are very sensitive and specific test being developed for alcohol. They detect marker proteins that are detectable for weeks after a single instance of alcohol consumption.

Ethanol causes certain enzymes to work slightly differently, and produce slightly different metabolites that stay in the system long after all the ethanol has been metabolized.

Levels of alcohol consumption can be detected quite reliably this way, making it possible to discriminate between an ocacional drinker and a heavy user for days and weeks after the last dose.

Re:Prior Art

[Anonymous Coward]

Yes, but what do you do when you have patentable projects in the works and you pick up a contract that could easily move into one of those areas... In my case I gave a one-paragraph description of the algorithms and applications, and state that I will not work on XXX type of problem without negotiating the details. The company was fine with that, and we moved on...

Re:Prior Art

[BVis]

The difference is that employees actually have rights in the UK. More specifically, there are rules about employer/employee relations that are actually ENFORCED in the UK. Over on this side of the pond employees are generally treated no better than disposable diapers - shit all over 'em, throw them away when you're done. It's the norm here for an employee to be terminated with no stated reason, because 1) the employer is not obligated to provide a reason and 2) if they do, they might have to answer for the fact that the reason is complete bullshit.

This attitude is carried over to IP in a lot of cases. More than once, a company has laid claim to an invention that an employee has developed on their own time, using no company resources, even in the absence of an "all your IP are belong to us" clause in their job description. (Not that job descriptions are enforceable by the employee here anyway; they almost always include "other tasks as assigned by management", which means that even if you're hired as a Java developer, your employer can require you to clean toilets. Then if you leave "voluntarily", you're ineligible for any unemployment insurance benefits, since you walked off the job. Theoretically you can appeal by asserting that the job was not as represented, but the burden of proof is on you.) The employee almost always cannot afford to defend themselves against this predatory action; tort law over here doesn't have that clause in it that the loser pays the winner's legal fees, which means that the employee will quickly bankrupt themselves defending the case.

In the meantime, though, I wouldn't go near such a contract without a lawyer.

Is it worth it to pay a lawyer $5000 to tell you "yeah, you don't have any rights here, you can either agree to this or not get the job"? I don't know many people who are looking for work who have that kind of cash.

Re:Prior Art

[Anonymous Coward]

http://www.unixguru.com/

Be VERY VERY careful of what you disclose. If you have digital and physical backups, keep them safe. What is yours BEFORE your employer comes to know you and which you never had access to before employment or collaboration with others should be YOURS, if you can prove it so and can force them to admit they have no records to substantiate their claims.

Moreover, if it's outside the realm of their business sphere and they just being greedy, don't let them win. Everybody with an ability to use some software is likely to try to hack out their own solution, but no two people will likely architect and style the things perfectly identically.

IF, by chance you MUST go to court, try to demand (beg) from the court that the other side can NOT make 'discovery' against your material. BUT, by the same token, YOUR side cannot ask to see theirs, either. Hell, once they have access to YOUR stuff, they can frabricate information and dates (hell, recently microsoft pulled so much obfuscation crap that the judge on the case was infuriated and lopped on an additional $25 M or so the fines/penalities; shoulda lopped on about $60 BILLION-- according to your ability or pain threshold, YOU PAY!... $25 M is chump change to ms...)...

BUT, the idea is that IF they so intimately KNOW and developed YOUR idea, then they should and better be able to explain it to the JUDGE AND JURY better than YOU. If they fail, they obviously they stole your idea and tried to wrest your control/ownership away.

I DID once or twice list to employers the generic descriptions, but never EVER provided any damned sketches, diagrams, etc...

IFFFF you bike or commute to work and take your personal work via laptop or disk archives, remember, that if your employer is an asshole, they could invoke the employment contract terms to lay claim to inspecting your bags, or contents thereof. If they are REALLY nasty, they could get a sheriff/warrant issuer to seize your stuff and inspect it, even if it is a treasure hunt to string together stuff...

David Syes, posting anonymously...

Not true

[Anonymous Coward]

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.