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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?"

62 of 300 comments (clear)

  1. Prior Art by The+MAZZTer · · Score: 3, Insightful

    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... :(

    1. Re:Prior Art by qbwiz · · Score: 2, Insightful

      There's not just the risk of them patenting, but also the risk of them stealing the idea and developing it faster than he would. Remember what happened with Stacker and Microsoft?

      --
      Ewige Blumenkraft.
    2. Re:Prior Art by Aneurysm9 · · Score: 4, Informative

      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.

      --
      There was Cowboy Neal at the wheel of a bus to never-ever land.
    3. Re:Prior Art by mrbcs · · Score: 3, Interesting
      If the idea is in the public domain, it can't be patented. Once patented, it becomes available for all to see. That's part of the process, you get the "patent protection" and the rest of the world gets to see what you did and how you did it. IMHO, disclosing any ideas would be very unwise. They could easliy steal the idea and you have no protection or proof.

      I also believe the whole patent system is a complete sham. Patents are good as long as you have tons of cash for lawyers to fight and protect it. Any good lawyer can subvert a patent. Yes I have personal experience in this and I'm kinda bitter about it. Wasted a lot of money for this information.

      If you guys are bored and want some shits and giggles, search the US Patent office. There's all kinds of stupid ideas there that will never fly and/or never be able to produce. Doesn't stop some lawyer from taking 10 grand from a bozo though.

      --
      I'm not anti-social, I'm anti-idiot.
    4. Re:Prior Art by letxa2000 · · Score: 4, Interesting

      I would never specify in a contract what my prior art is. My contracts always specify that anything belonging to the client prior to the contract remains theirs and anything belonging to me prior to the contract--or that I come up with during the contract but not materially related to the contract--remains mine. No lists are necessary. If there's a dispute over who owned what when, that's what courts are for. I'm not going to enumerate my property because it then implies nothing else was mine. No way. Let the contract stipulate the spirit of the contract (that no-one is trying to rob anyone else's idea) and if someone believes that spirit was violate, take it to court and let it get worked out there.

    5. Re:Prior Art by iocat · · Score: 2, Interesting
      A lot of it is, say you get a contract to build X, but you are going to use tools, Y, that you already have. Since it's a work for hire, they want to know exactly what Y is, so that they understand the scope of what X, which they're going to own, will be.

      In practice, we usually say things like "Tool Z, which provides a propriatary method for generating ABC" -- fairly broad and non-specific, but clear. Then we make it clear that they are getting X, but not Y, and nor are they getting any improvements to Y that we had to make to create X. Sometimes they want an infinite, non-exclusive, transferable license to the improvements made to Y, and maybe even Y itself, but at that point, it's really deal specific.

      --

      Dude, I think I can see my house from here.

    6. Re:Prior Art by Lactoso · · Score: 4, Insightful
      "Simply don't sign NDAs. NEVER!"

      That's just not a tenable position for an external contractor. The corporate machine knows what it's doing and that you will not likely give up a lucrative contract because of some 'iffy' terminology or the almost boilerplate NDA. Regardless of what your 'indespensible' skills are, there's someone else out there that's willing to take up the crumbs that you leave lying about.

      It's one thing to have your ethics and sense of what's right and wrong displayed proudly on your sleeve, and it's another altogether to be able to make money and support your family...

    7. Re:Prior Art by Skrynesaver · · Score: 2, Insightful

      In a perfect world not specifying your own prior art would be ideal, however I have seen employment contracts where the employee is asked to submit a list of prior art before starting employment with the company. I have been told that in cases of direct employment these contracts can be negated because the employee is efectively under duress, ie. sign this or no job, with the usual IANAL caveat I'd be interested in hearing what other people think of the enforcability(word?) of such a contract.

      --
      "Linux is for noobs"-The new MS fud strategy
    8. Re:Prior Art by simong_oz · · Score: 2, Interesting

      I wish people would get a clue about IP protection, and patents in particular.

      The entire point of an NDA is that the disclosure is not public, but private, which means it is NOT admissable as prior art. Even if you deliberately go and disclose the idea in public, i.e. violate the NDA to try and make it prior art and thereby invalidate a patent, in many countries this will still be admmissable.

      Every NDA is different - you need to examine the clauses in the actual NDA in front of you. In practice if you're not happy with it, suggest changes and send it back. Most companies are happy to go through this process.

      The point of an NDA is not (usually) to try and steal all of your ideas, it is to protect the ideas (for BOTH parties).

      --
      "Because it's there." - George Mallory, when asked why he wanted to climb Mt Everest, March 18, 1923 (New York Times)
    9. Re:Prior Art by BVis · · Score: 3, Informative
      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.
      --
      Never underestimate the power of stupid people in large groups.
    10. Re:Prior Art by The+Spoonman · · Score: 3, Insightful

      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.

      Not exactly...it's much worse than that. The employer is not obligated to provide a reason, because an employer doesn't NEED a reason. They can come in an fire you on a whim, and it would be legal. The basic idea is that you should be able to quit without reason or repercussion, so employers should be able to fire you similarly. The problem is, it's not reciprocal in any way. If you quit a company out of the blue, you're more than likely not going to cause any kind of financial difficulty to the company. They'll get along just fine without you. If, however, your employer decides to go skeet shooting with pink slips you're pretty much fucked. They also have all these nifty policies and agreements you have to sign before employment, all of which are designed to lock out any fringe chance you might have had for suing for wrongful termination. It's a wonderful system we live under, and people wonder why employees are so frustrated. Here's a clue: we're bent over teh barrel, our pants are down and you've just walked in the door with a donkey. You tell ME why I'm so worried!

      Under these laws, though, it should be legal for me to walk into a place and when told I have tons of paperwork to sign, I hand over a pile of my own. I think it should be fair that a company not hold me responsible for the failure of a system if I haven't been trained in how to use that system. Seems reasonable. I also shouldn't be held responsible for failures due to management mistakes or procedural processes. If I'm expected to follow a set of rules, then they should, too. Why not?

      --
      Which is more painful? Going to work or gouging your eye out with a spoon? Find out!
      http://www.workorspoon.com
  2. Either, or, ... by chris_eineke · · Score: 4, Funny

    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
    1. Re:Either, or, ... by nine-times · · Score: 3, Interesting

      We're all geeks here. All you had to say was Kobayashi Maru.

  3. Can you post a sanitized version of the clause? by petard · · Score: 4, Informative

    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.

    --
    .sig: file not found
    1. Re:Can you post a sanitized version of the clause? by jours · · Score: 5, Informative

      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.

      --
      This sig intentionally left blank.
    2. Re:Can you post a sanitized version of the clause? by mcrbids · · Score: 2, Interesting

      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.

      Wow. That sucks!

      I've solved this in the past by making sure that none of my ideas are ever owned by anybody but me. I produce software and routinely borrow code and ideas from past projects. It's called "experience" and it's a big part of what I bring to the table. In exchange, I don't do work unless I get ownership of the resulting code. Then, I grant whatever license is appropriate for the use of the resulting code.

      This has worked out amazingly well for me. When positioned as a mutual "sharing of ideas", I've had little/no trouble getting people that I work with to agree to these terms, as either a company owner / consultant or an indie consultant.

      But then, I'm not going for a job, never have, and I don't work with big companies, though my software company looks to be set to break $1 million in annual sales in the next year or so, with me as CTO.

      I personally would not hire an employee on these terms, so YMMV. Decide what you want and go for it. If you want to be a consultant, make sure that you have both good technical and salesmanship skills.

      --
      I have no problem with your religion until you decide it's reason to deprive others of the truth.
    3. Re:Can you post a sanitized version of the clause? by simong_oz · · Score: 2, Informative

      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).

      --
      "Because it's there." - George Mallory, when asked why he wanted to climb Mt Everest, March 18, 1923 (New York Times)
    4. Re:Can you post a sanitized version of the clause? by Gr8Apes · · Score: 2, Informative

      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.

      --
      The cesspool just got a check and balance.
    5. Re:Can you post a sanitized version of the clause? by Svartalf · · Score: 2, Informative

      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.

      --
      I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
  4. I signed one by MobyDisk · · Score: 4, Insightful

    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.

    1. Re:I signed one by hyfe · · Score: 4, Informative
      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.
      --
      "" How about taking the safety labels off everything, and let the stupidity-problem solve itself? """
    2. Re:I signed one by Angostura · · Score: 2, Interesting

      Now lets see - what "might be applicable to healthcare products" - how about any kind of software?

      "but it's a real time operating system designed to run an oil drilling rig" ..." yes, and it may well be applicable to our dentistry products. It is ours. Thank you".

      "It's an e-mail client" ... "yes, our healthcare clients use electronic messaging. Thank you".

  5. Just strike the clause by patio11 · · Score: 4, Informative

    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).

    1. Re:Just strike the clause by Dr.+Awktagon · · Score: 5, Funny

      velcro detachable sideburns

      Shit.

      *crumples and throws away patent application*

  6. Heh, I used this in reverse by Anonymous Coward · · Score: 4, Interesting

    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.

  7. IANAL by Bitsy+Boffin · · Score: 4, Insightful

    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.

    --
    NZ Electronics Enthusiasts: Check out my Trade Me Listings
    1. Re:IANAL by damsa · · Score: 3, Informative

      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.

    2. Re:IANAL by Skippy_kangaroo · · Score: 4, Interesting

      How can they claim that there is any meeting of the minds or that all terms in the contract were fully understood by the 'employee' if it comes up in court later. Can the employers insist that you sign it without giving you time to properly review it (even without a lawyer)?

      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?

    3. Re:IANAL by Zontar_Thing_From_Ve · · Score: 2, Interesting

      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.


      This is excellent advice. I'd like to add that in my opinion, BenderMan is a little bit delusional. First of all, most people don't stay awake at night dreaming up inventions. In fact, I know plenty of really really smart people who don't do this at all. Secondly, whether his planned patents are truly "valuable" as he claims they are is something we will just have to see. His ego certainly isn't suffering from this delemma.

      BenderMan's problem is that he falls into the old trap "I do A. Therefore, everybody else in the world does A too, because I am completely normal and like everyone else." However, I think if BenderMan was as smart as he thinks he is and his ideas were as valuable as he thinks he is, he'd be smart enough to be talking to an attorney rather than asking strangers who aren't attorneys for advice that only attorneys are qualified to give. It might be worth noting that studies have shown that incompetent people are often supremely overconfident in their own abilities and I'm beginning to wonder if BenderMan falls into that category.

  8. What's good for the Goose... by foniksonik · · Score: 4, Funny

    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.
  9. Naive suggestion. by Lux · · Score: 3, Interesting

    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.

  10. Struck clauses by Spazmania · · Score: 5, Insightful

    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.
    1. Re:Struck clauses by UncleSocks · · Score: 2, Interesting

      I concur. I've seen these on nearly every contract I've been offered. I strike them and they say essentially, "okay - no prob, we always try for this..."

  11. How do you handle it? You constrain it. by Anonymous Coward · · Score: 5, Interesting

    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.

  12. In general, real consultants shouldn't sign. by Animats · · Score: 3, Insightful

    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.

  13. Sure, give them the list -- for US$50,000 by Morgaine · · Score: 4, Insightful

    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
  14. Just Modify It! by Fringe · · Score: 3, Insightful

    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.

  15. What do they do corp-2-corp? by HangingChad · · Score: 4, Interesting

    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
    1. Re:What do they do corp-2-corp? by Michael+Woodhams · · Score: 2, Interesting

      The day an employer asks me for a blood test is the day they get my resignation letter*.

      And the strongest non-medicinal drugs I take is sometimes a soft-drink with caffine in it. (No tea, coffee or alcohol.)

      * Actually, I probably wouldn't let them off so easily. I'd probably refuse, and look to sue for unjustified dismisal if they fired me for it.

      --
      Quattuor res in hoc mundo sanctae sunt: libri, liberi, libertas et liberalitas.
  16. Re:ROFL --- join us in the real world please by QuantumG · · Score: 2, Interesting

    Please. If you havn't got the money to make it, you sure as hell aint got the money to patent it or defend said patent. Now if you would please join us in the real world.

    --
    How we know is more important than what we know.
  17. list a bunch of projects, use codenames by Anonymous Coward · · Score: 3, Interesting

    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.

  18. Swift move from patent law to antitrust law... by PaulBu · · Score: 2, Insightful

    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.

    1. Re:Swift move from patent law to antitrust law... by SuperQ · · Score: 2, Insightful

      And a cartel by another name is a union. Because of the nature of small busineses, this seems like it is on the border of worker's rights.

  19. Re:YMMV, see a Lawyer by saihung · · Score: 3, Interesting

    This is what's sometimes called an "adhesion" contract. Take it or leave it, and if you don't look the terms the other guys go home with the ball. If you refuse to sign the other party can walk away, but if you sign the thing (in some juristictions) the adhesion is a potential reason for calling the whole contract poop.

    This kind of thing distorts the very reason that contracts exist - so two parties can formalize a "meeting of the minds" over a certain expectation of performance. When one party has absolute power to dictate terms, then what we have isn't really a contract in the classical sense at all. But that doesn't mean it is unenforceable.

    IAMAL
    (but I will be one soon!)

  20. Don't sign an NDA by BadAnalogyGuy · · Score: 5, Funny

    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.

  21. Re:Given that you are consulting company by Duhavid · · Score: 4, Funny

    So, find a couple clients that both want that NDA executed.

    Execute with both of them.

    Do some work, foment a crisis, get them both
    hammering on each other, stand aside a watch
    the fireworks.

    I have a patent on this, by the way.

    --
    emt 377 emt 4
  22. Sure they can by Sycraft-fu · · Score: 4, Insightful

    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.

  23. Brief summary of what this means by yppiz · · Score: 4, Insightful

    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

    1. Re:Brief summary of what this means by Anonymous Coward · · Score: 2, Insightful

      Most insightful? Looked like the suit-drivel I get from potential employers when they tell me that despite the fact that the contract says they want to own everything I think say and do 24/7 for the rest of my life for a $40k programming job, they really only want to own anything that applies to what their company does, and they never really enforce it anyways.

      The words in the contract are legally binding. It doesn't matter what the other side "said" it means, it means what it says. In this case, hopefully it says that the company is under agreement not to disclose or use your inventions, not the other way around. And hopefully they're paying this guy a lot of money so that when their CEO thumbs through it and says "gee what a great idea, glad I thought of it!" he'll be able to afford a lawyer to sue for their breach of the contract.

  24. Re:NDA yourself by vodhner · · Score: 3, Informative

    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.

  25. Just striking won't do it by Anonymous Coward · · Score: 2, Informative

    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.

  26. Similar situation... by cardpuncher · · Score: 3, Interesting

    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...

  27. From the big company's perspective ... by drphil · · Score: 3, Insightful

    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.

  28. just be really general by georgesdomains · · Score: 2, Interesting

    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.

  29. Licensing vs. Work for Hire by Lord+Grey · · Score: 3, Interesting
    I've solved this in the past by making sure that none of my ideas are ever owned by anybody but me. I produce software and routinely borrow code and ideas from past projects. It's called "experience" and it's a big part of what I bring to the table. In exchange, I don't do work unless I get ownership of the resulting code. Then, I grant whatever license is appropriate for the use of the resulting code.

    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:

    1. Code ownership matches customer expectations. Very, very few people understand the whole licensing issue, and if you try to explain it to them then they think you're trying to pull one over on them. The vast majority of people expect to own the software they've paid to be produced.
    2. Sales tax. Sales tax should be charged when transferring "property" via a sale. Creating software is creating a "property" under the eyes of the government, owned by the programmer's employer (or the programmer, if self-employed), and if the software is sold to another entity then you have to charge sales tax. Writing software under a Work For Hire type of contract makes you (if effect) a temporary employee of the customer. The customer is the default owner of the created property, sales tax doesn't apply, and that saves a huge amount of time and money for all concerned. (BTW, I'm not a tax guy at all. I'm speaking through the direct experience of going through a Texas sales tax audit that was easily the worst six weeks of my entire life. I learned a lot, but I never want to do that again.)
    --
    // Beyond Here Lie Dragons
    1. Re:Licensing vs. Work for Hire by arborlaw · · Score: 2, Interesting
      Writing software under a Work For Hire type of contract makes you (if effect) a temporary employee of the customer. The customer is the default owner of the created property, ...
      IAAL.

      Close, but not true.

      So-called "work-for-hire" contracts don't make your work into "work for hire" if the facts and circumstances of creating the work are not the facts and circumstances of certain enumerated activities under 17 USC s. 101, definition of "work for hire".

      I don't use these so-called "work for hire" agreement because they're dishonest--they imply that a hiring party can accomplish something by written contract with its non-statutory-employee workers (ie, contractors), that it cannot. Nevertheless these are extremely popular with hiring parties and lots of attorneys who apparently didn't bother to read the Copyright Act. ("Work for hire" is a term that only applies to copyright IP--other uses of it are extra-statutory and extra-judicial and just serve to keep those who don't RTFM under control by 'in terrorem' effect.)

      It's even more dangerous to imply that a WFH contract can make you into an "employee" of the employer. Whether or not you are an employee or an independent contractor is an extremely complex area of law, involving at least four agencies (IRS, federal DOL, state taxing authority, state-level DOL). Each jurisdiction (federal, and each by state) has its own "facts and circumstances" test that determines whether you, in fact, are an employee, although being hired, compensated and treated as if you were a contractor. (Think about it...if the IRS just let people decide this by contract...no one would be withholding taxes for employment and they would have a massive compliance and enforcement problem on their hands, going after 280 million little contractors.) The IRS uses a "20 factors test" to determine whether a worker is, within a given structure and context, working as an employee or contractor.

      In many cases, a worker can be found by the IRS to be a statutory employee, even if the hiring party has made the worker sign a "Work For Hire" agreement and even if the hiring party has 1099'd the worker. Also...in many cases state laws are even more restrictive: it is not unusual for the State of Michigan to find a worker to be an employee (ie, withholding required, IP automatically owned by hiring party) in cases where the IRS has no issues with the classification. (Michigan has one of the most pro-employment, restrictive tests in the nation.)

      In fact, one of the reason the "my outside inventions and IP are listed here" clauses in NDAs and other hiring context agreements are used by hiring parties, is to prove that the worker HAS a life outside of the contract position--ie, to defeat a claim by a restrictive state agency that the worker is actually an employee and therefore withholding and worker's compensation insurance and a lot of other entitlements payments are owed. (Misclassification never penalizes the worker, it always penalizes the hiring party--which pays taxes, penalties and interest in the neighborhood of 40% - 200% of the hourly rate paid to the worker).

  30. Patents worth it? by sickofthisshit · · Score: 2, Insightful

    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.

  31. Don't sign contracts without a lawyer's help. by ChrisBush · · Score: 2, Interesting
    Are you a lawyer? No? I didn't think so. A lawyer wouldn't say "always".

    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.

  32. IAAL by ChrisBush · · Score: 3, Insightful
    How can they claim that there is any meeting of the minds or that all terms in the contract were fully understood by the 'employee' if it comes up in court later.

    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.

    1. Re:IAAL by ldholtsclaw · · Score: 2, Interesting

      This isn't quite on-topic, but ...

      About 10 years ago my wife was asked to sign an NDA/Non-compete contract by her employer after managing their call center for over a month. Since it had many items left blank, she drew lines through the blanks and made herself a copy. Several days later, their HR VP threatened to fire her for drawing lines through these blank areas. After informing him that she never signed anything with items left blank, he told her that this was how they "did" things and she needed to be "a team player."

      Nothing else was said about the issue until a couple of months later when she was given a pink-slip and replaced by a cousin of one the VPs. Along with the termination notice was "her copy" of the NDA/NC which had been altered with white-out and very draconian additions. She, of course, produced the copy she had made when it was signed and their CFO made threats of lawsuits and even went so far as to state she was facing criminal charges for making an unauthorized copy of the agreement. All it took was one phone call to the owner informing him of the situation (and that she was at her lawyer's office) for the CFO to back down and recant.

      Shortly after she left, the company was sold and they have since lost over 98% of their business, closed all but one of their offices, and we've not been bothered by them since. Someone we know who still works for the company recently told us all of the people responsible for her woes were terminated long ago. Fortunately the old agage "what comes around, goes around" still occasionally holds true. Still, it goes to show that some people know no limits and I shudder to think what might have been had she not made that copy.

  33. List everything... by JumperCable · · Score: 2, Funny

    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.

  34. NDA's aren't always about protecting ideas by Cassini2 · · Score: 2, Interesting

    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.