
Does my company really own every idea I come up with? - bry
I am a long-time lurker here on HN, and have never submitted a story before, but I really need your opinions/advice.<p>I work for a large company that owns a website with a couple million members that allows them to get answers to their technical questions, read blogs, network with their peers, etc from that website. I am a salaried mid-level .NET developer at work during the day.<p>I came up with an idea for a web app that could really take off. I've been working on it at home, on my own machine, on my own time. Its written in Python using the Google App Engine SDK (super awesome, BTW). I can see needing Angel or VC funding at some point, or selling it if it really does take off (that would be my ultimate 
goal, of course -- selling it to a larger company and cashing out).<p>My concern is, since I work for this larger company and signed an "Employer Protection Agreement" when I was hired, do they own my "invention" (web app), even though it was developed on my own time, with my own resources? Where is the line between whether a web app relates to my current employer's site or not. Without going into too many details at this point, it would essentially be an aggregator of my user's personal contacts.<p>The exact wording in the agreement I signed says:<p>"The Company will own (a) any inventions, trade secrets, ideas, original works of authorship or confidential information that Employee conceives, develops, discovers or makes in whole or in part during Employee's employment by the Company that relate to the Company's business or the Company's actual or demonstrably anticipated research or development"...<p>That part I <i>think</i> is fine, because my idea does not really directly relate to their website. What worries me is this blanket catch-all statement at the end:<p>"...To the extent any of the foregoing is not deemed to be a work made for hire, Employee hereby irrevocably assigns all copyrights, patent rights, and other ownership to the Company...and Employee will not at any time contest the validity of such rights".<p>Does that mean they own ANYTHING I invent that relates to any subject matter? Do I need to quit my job just to be able to work on this idea? I have three kids and a wife at home and work full time just to make ends meet. I work on my ideas for as long as I can at night, until I'm about to collapse. I'm making progress, but is it worth it?
======
burnout1540
If you live in California then your employer's agreement is not enforceable
for inventions that fall under Sections 2780-2782 of the California Labor
Code.

See <http://law.justia.com/california/codes/lab/2870-2872.html>

~~~
n8agrin
+1.

And likely if you live in another state this would not be upheld, especially
if you were building something wholly unrelated to your employer's product /
service.

I'm no lawyer though, so do some research regarding your state's labor laws.

~~~
enjo
That would be entirely incorrect. Without specific state protections these
clauses are quite enforceable (and have been routinely enforced for decades).
The relationship between what you do at work and at home is irrelevant.

Disclaimer: I'm not a lawyer, but I've been directly involved in issues
pertaining to these clauses in the past.

~~~
bry
So if I had a house painting business on the side, they could take it over if
they wanted to? Seems a little far fetched. I don't think "The relationship
between what you do at work and at home is irrelevant" is correct, from what
I've been able to gather in my research. It definitely plays a role. It may be
minor, but its not irrelevant.

~~~
crpatino
Of course they cannot take over the house painting business! You did not
invented any of paint, brushes, ladders or walls.

If, on the other hand, your painting business is about creating works of art
rather than home improvement... they will leave you alone until some magazine
labels you as "the next Picasso" or something. Then they come and sue you into
oblivion, since they will out-spend you 50x in court, regardless of who is
"right".

------
midnightmonster
Of course I am not a lawyer (but I am an English major!), but I think many are
misreading the last part quoted.

"any of the foregoing" means "anything we talked about earlier" not "anything
whatever".

They need the last part because copyright is a sticky thing. All copyrights
stick with the owner unless they are a "work for hire" or very explicitly
granted in exchange for some good consideration, and you can't simply declare
something to be a "work for hire", even by contract--it has its own meaning in
law and (even more so) judicial interpretation of law. In (a) they try to
define what they'd like to be included in "work for hire", but if it came down
to it, a judge might not agree, so they require you to explicitly assign
rights to everything in (a) (and possibly b, c,... don't know what's omitted)
just in case they don't have them already.

If there's nothing important between the two sections you quoted, then I
believe the ownership of your invention would hinge on the judgment of whether
your invention relates to the company's business. Also any applicable state
laws, etc..

I'm not qualified to answer completely, and even a relevantly trained lawyer
would need to know the state, but I think there's good reason for hope.

~~~
yungchin
I thought the "for hire" part meant to cover cases where the copyrights are
transferable to a customer of the company. So in that case the customer owns
the rights, and in all other cases that are discussed in the foregoing (I
agree with you there) the company owns the rights.

But, I'm not a lawyer either...

~~~
midnightmonster
Unlikely. "work for hire" is standard terminology in copyright law, and it
means (roughly) work done while an employee as part of the normal course of
your job. So that's why they need to add an explicit copyright and patent
grant for non-work-for-hire cases: an invention related to the company's
business might not be ruled a work for hire if it relates to a part of the
business you don't work on or if you only worked on it on the weekends, etc..

And even if the company does transfer IP to its customers sometimes, that
detail wouldn't be in an employment contract. You assign your IP to the
company, the company does whatever it pleases with it. The alternative is
every employee that works on a project for a customer executes a separate
agreement with the customer to assign IP.

------
dhyasama
I had the same questions when my employer developed an employee handbook that
all employees must sign. I didn't like the part that said "during employment"
because that could be interpreted as off hours. I've always been honest with
my manager about side projects, so I just asked him to modify the text before
I signed it and he was fine with that.

------
martin_valiente
I've always thought that if a company claims rights over what you do outside
worktime, they should do it not only for your genial ideas, but for the bad
ones too. So, if you incur in a stupid debt it must belong to the company.
Your newborn baby? The company mus pay alimony. It's all or nothing!

------
modoc
I have never signed a contract/non-compete/IP agreement without making a
number of edits to it first. So far I've always been able to get it changed to
something that works for me.

~~~
wushupork
I second that. Some of these IP agreements are down right ridiculous and
unenforceable but totally skewed towards the employer. If you have an
entrepreneurial bone in your body you should make friends with an IP lawyer
and have them go through any employment agreement before you sign. Have them
make edits and resend it back.

------
DenisM
I'm not a lawyer, this is not a legal advice. Treat this text as preparation
to a conversation with an actual lawyer.

So. It's _complicated_.

The company can sue you for the ownership of the work, but until that lawsuit
is lost you own the work. In practice they won't sue you unless you really
tick them off (don't do that) or you become successful.

There are also mitigating tactics for the upcoming lawsuit:

1\. Promptly notify your manager in writing about what you do, print the email
and keep it. If you can get a proof that s/he read it, print that too. They
key here is that you don't want this to be a surprise to your manager later on
when you quit and you don't want to come across as deceptive. It's best to
keep good relationships. There is a method to writing this sort of emails -
your claims must be broad as to encompass your entire work, and not too
specific as to allow you to change things as you work. On the other hand an
overly broad claim can attract a lot of undue attention, so strive for
balance.

2\. When you leave your day job, notify them again in writing about what you
do. Ideally get your manager to respond and and print that response, or find
other way to have proof. Again, it shouldn't be a surprise to them (see point
#1).

By doing this you have established a paper trail proving that they knew but
chose not to act. If they fail to act within reasonable time, but chose to
bring a lawsuit later after you become successful this paper trail will serve
to undermine their claims of you being unfair. I was told that after 3 years
of inaction they practically lose their stance. The clock starts ticking at
the moment they were notified, and it resets every time there is a new
violation (i.e. you create new work while still employed).

Your more immediate problem is that many investors will look at this and
either pass or say that they need a letter from a lawyer that assures them
nothing can go wrong. Lawyers will tell you that this is _complicated_. One
way to resolve complexity is to ask your current employer to sign a piece of
paper that gives you all the rights to this particular work back. They usually
don't as there is nothing for them to gain and maybe something to lose. On the
bright side there will be investors who will invest despite this, it's just a
smaller number. Those are more likely to be true believers, so there is a
positive side to this filter as well.

Lastly the law in most states puts restrictions on what kind of claims by
employer are enforceable. There are clear-cut cases (like operating a
lawnmower service while working at Facebook), but technology cases are
_complicated_. This will cost a lot of money to get a definitive letter from a
lawyer, and I don't think it's worth the expense in your case.

~~~
abossy
Does your employer know about your project? They don't have to know. In fact,
when I was in your position, I was advised to keep my side project as secret
as possible to avoid warranting a lawsuit. Like DenisM says, they have nothing
to gain by OK'ing your project, so no need to even tell them about it.

~~~
DenisM
There is a VERY good reason to tell them, and document the fact. If you commit
a violation and they know about it they must act within 3 years or lose their
case. However if they don't know about the violation they can go after you 15
years later. Don't do it in secret. If you afraid they'll kick you out line up
another job just in case.

------
mattmaroon
Please read the following for your answer:

<http://mattmaroon.com/2008/08/27/one-inviolable-rule/>

Then go consult an actual attorney.

~~~
bry
I want to be clear that I'm not asking legal advice. I would never make a
decision based solely on advice from friends.. but your opinions matter. Many
of you have been in the same situation, so aside from the "ask a lawyer"
suggestion I knew I'd get, I'd love to hear from people who have been in this
situation. :)

~~~
Zot95
Perhaps you are not asking for legal advice... but I think the point is that
you should be... if want assurance that the answer you receive is correct.

You will hear from people who have been in this sort of situation, but not the
same situation. For example, their employment contracts likely differ from
yours.

------
imp
Have a lawyer (in IP/contract/employment law) look at the document and your
situation before you quit your job. It'll probably only take him a few minutes
to review it. A couple hundred bucks and you'll know for sure.

I had this exact same situation recently. My day job was in mechanical
engineering and I had a website that I did on my own time/computer. My lawyer
said that since there was no connection between my day job and my website that
I was fine. The agreement I signed was very similar to yours in that it had
catch-all phrase like that, but my lawyer didn't seem concerned.

I also emailed my boss and legal counsel at the day job to review my website
and I asked if they thought there were any overlaps or conflicts of interest.
Both said no, so I have documentation they they disclaimed rights to my
website, just in case something ever came up.

YMMV though. Just call a lawyer and get it over with.

------
fierarul
The catch-all statement seems pretty clear -- they own it (unless you dispute
it in a court of law -- but who will invest in your thing in the meantime ?).

Now, perhaps they are benevolent and are willing to allow you do your thing in
the spare time. But, if you really think there is money to be made, spend some
money on actual legal advice.

Btw, if I were your boss and would read this message I would be kinda
conflictual about granting you an exception from the contract for another
reason: you seem to over-work yourself. Now, when you hire somebody for a
full-time job you assume a given productivity. If the person is spending
another 6-8 hours a day doing his side project until he's about to collapse --
how much productivity is the company losing ? Just another angle to look at
it.

~~~
bry
My day job is not suffering in the least. I have to provide for my family, and
I make sure to clearly separate the two. I take pride in what I do. I think my
boss would agree, so I'm not worried there.

~~~
fierarul
If you have a good relationship with your boss and your work is not influenced
by your side-project by all means talk directly to him/her. Nothing like
having actual management support to get things moving quickly.

------
DrGunn
That's pretty standard wording, but I would ask them to clarify that
"inventions/works of authorship" that don't fall under the "work for hire"
category only will be assigned to the company to the extent that they are part
of "the Company's actual or demonstrably anticipated research or development."

In other words, take the specificity language from the first paragraph you're
OK with and add it to the second one.

This is unrelated and may not apply to your situation, but depending on how
much work you're doing, I'd also be sure to let them know that you think it's
in the interest of both parties if you have a stake in the company, and
propose a more of less token (depending on involvement) amount of stock
options in addition to other compensation.

I'm neither a lawyer, nor ANAL. WTFBBQFTW.

------
ben1040
A couple years ago I had to sign a similar agreement at a previous job.

The problem with mine was that the company was a fairly large one which had
completed numerous acquisitions in the last decade or so. Every little company
they acquired had some product that was "out in left field" relative to what
their core business was. So as these smaller firms were consolidated, this
company ended up with all sorts of little businesses out there that I could
never account for. I couldn't confidently say what was or was not related to
their business or R&D, so I just stayed out of doing side projects out of fear
of getting sued and felt pretty unfulfilled.

I ended up just quitting that job and going to work somewhere that I didn't
have to sign any assignment agreement.

------
wjens
Have you considered approaching the company over this? Unless you're certain
enough in your idea to quit, I don't see the harm. You can either push it as a
project that the company should partake in or get them to provide you a waiver
to pursue it on your own.

~~~
dustingetz
they have no incentive to give him a waiver.

~~~
bry
That's pretty much my concern. I have thought about approaching them, but
we're talking about a huge amount of bureaucracy. I'm sure my managers would
be totally cool with it, but my manager's manager's manager wouldn't even have
the authority to approve it.

So I'm left debating whether I have anything to worry about in the first
place, or whether I should start working through all that bureaucracy.

Thanks guys! Looking forward to any more insight or if anyone else has been
through this situation before.

~~~
azim
I've heard stories of employers who have told employees shut down your side
project or you're fired. I don't mean to be pessimistic, just make sure your
project is non-competing and in line with their standards of ethics and
values.

------
wallflower
My mom has her name as co-inventor on several patents. The company owned
everything - she got a nice hand-holdable little lucite commemorative award
thingy that embedded the first page of the patent (printed small font) on a
small metal plaque.

Pretty much everything that you do on company time and company hardware
(office, laptop, network) is owned by them (and can be monitored). There are
multiple legal precedents for company ownership/monitoring.

Example of Lucite Mini Patent:
[http://www.recognizinginnovation.com/miva/merchant.mvc?Scree...](http://www.recognizinginnovation.com/miva/merchant.mvc?Screen=PROD&Product_Code=Desk-
Sculptures_DS-3&Category_Code=DS)

~~~
DenisM
OP explicitly states that he worked on his equipment and his time.

------
holograham
I work for a company that has pretty much the same rules. Yes, the company
technically owns any IP that you create, even off the job. Most large
companies have a system where you submit the idea and typically a VP of
business strategy reviews the idea to see if it infringes on the company's
market or current product offerings. If it doesn't, you get it signed off as
OK and you keep it.

From a legal standpoint from what I understand (not a lawyer here) you have
grounds to fight for the IP but if your company cares enough it will fight you
back and bankrupt you pretty quickly. What you signed would be their silver
bullet and you would fight a tough uphill battle.

~~~
bry
So it sounds like my only options are:

1\. Quit, if I really believe in an idea, and work on it somehow without any
income or by working with a company that doesn't require such an agreement
(which I have yet to encounter around here). I'm not quite confident enough in
the idea to do that... but I would like to be able to work on it to see what
it turns out to be.

2\. Get a waiver, somehow, by wading through all the bureaucracy. If they
would sign such a thing, it would obviously be worth it, but I worry about all
the fuss this could cause by trying to go up the chain to the appropriate
level, for an idea still in its infancy.

"Ask a lawyer" aside, are there any other options? Has anyone ever been to the
point where their company actually showed interest in what they were working
on, on the side?

~~~
joeyo
_Quit, if I really believe in an idea..._

IANAL, but I would be concerned that even this would be insufficient if your
employer can show that you had the idea while working for them.

~~~
bry
An idea for a web app is really no big deal. They're a dime a dozen. I think
it's really the execution that counts. I'm not concerned about that

~~~
ewjordan
Unfortunately what counts to the law and what really counts may be two
different things altogether. Be careful, especially if you think your employer
might try to pull something here.

------
csomar
Start your idea (or your little company) with your wife as an owner/founder.
It'll be like if she's the one that built it (make it seem so). If the idea
takes off, leave the company and work full-time on yours. Any way, it's your
wife idea/company/product, so no legal issues about it. Until your idea become
successful your company/friends won't know about it (just don't talk about it
and they won't know). If it gets successful and you get fired, it doesn't
matter, since they can't sue you :)

Note: You should trust your wife well for that solution, or it'll work against
you when it takes off (without a job + without your startup).

------
apower
I'm curious. Why all the downvotes? Those comments are very reasonable. It
seems all the comments stating the fact - the OP is screwed with his IP - are
downvoted. Why? You can't bear the straight truth?

~~~
bry
Not sure. Sure wasn't me. I think we all tend to hope that the answer is
simple

------
apower
Yes, your company owns all the inventions you come up, including off-hour
work, during your employment with them. And companies are not hesitant to sue
to get your IP. There were cases before and they won. That's why people moved
to states like California where protect innovation by individuals. For your
current situation, you should keep quiet and keep working on your project.
When it's ready, quit your job. Continue to work on it quietly for two months
before going public. Good luck.

------
lawstudent
I think that the comments are confusing work for hire in the context of being
an employee v. a contract worker. Your contract seems to say that if you do
subcontract work it will be considered produced for the company (see Cmty. for
Creative Non-Violence v. Reid, 490 U.S. 730). The question in re your case is
whether the app falls within your scope of employment. If you really think it
is worth something, you should talk to a copyright attorney.

------
stonemetal
_to any subject matter?_ No just the subject matter they claim rights to made
explicit in _The Company will own (a) any inventions..._

 _To the extent any of the foregoing is not deemed to be a work made for hire,
Employee hereby irrevocably assigns all copyrights,_ This part just says that
if what you do in your free time doesn't already transfer to them by work for
hire laws that you will explicitly grant it to them.

Note: I am not a lawyer.

------
keefe
IANAL

I recently went through similar debates myself. Let's say you're working on a
dating app. If they have one meeting about how their current infra could be
used for dating and record the minutes of the meeting, then that is
demonstrably anticipated development. These laws are really a pain in the ass.
You really need to spend a few hundred bucks on a qualified lawyer. Here's a
link that may be helpful : www.calbar.ca.gov/ipsection

------
Mankhool
IANAL but AFAIK in EVERY state with the exception of Nevada, this is true. I
used to work there and one of my colleagues, a brilliant engineer, had moved
there just so he could work at a job he enjoyed AND invent and patent devices.
Ask a lawyer. You should be able to get an initial consultation for free.

~~~
tghw
States with applicable statutes (that I know of):

    
    
        * California  Cal. Lab. Code 2870-72 - http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=02001-03000&file=2870-2872
        * Delaware    Del. Code Ann. tit. 19  805 - http://delcode.delaware.gov/title19/c008/index.shtml
        * Illinois    765 Ill. Comp. Stat 1060/2 - http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2238&ChapAct=765%26nbsp%3BILCS%26nbsp%3B1060%2F&ChapterID=62&ChapterName=PROPERTY&ActName=Employee+Patent+Act.
        * Kansas      Kan. Stat. Ann. 44-1306 - http://www.kslegislature.org/legsrv-statutes/getStatuteFile.do?number=/44-130.html
        * Minnesota   Minn. Stat.  181.78 - https://www.revisor.leg.state.mn.us/bin/getpub.php?pubtype=STAT_CHAP_SEC&year=2006&section=181.78
        * NorthCarolina       N.C. Gen. Stat.  66-57.1-.2 - http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_66/Article_10A.html
        * Washington  Wash. Rev. Code Ann.  49.44.140, .150 - http://apps.leg.wa.gov/RCW/default.aspx?cite=49.44.140

------
bry
I know "ask a lawyer" is the safest choice, and I REALLY appreciate all your
comments. I'm curious if anyone here has actually been in this situation, or
better yet, further down the line where they were trying to get funding and
the VC or Angel saw it as a problem.

All comments are certainly appreciated!

~~~
gyardley
You won't be able to raise money from experienced investors if your
intellectual property is disputed or could potentially be disputed. When you
do go to raise money, you'll have to make a number of representations about
your company, and one of those representations will be that all the IP belongs
to the company. (As an aside, you'll also have a hard time raising money if
you're still at your full-time job, unless your app has some serious traction.
Investors like to see commitment.)

When we were getting started, my cofounder and I held off on putting a single
word to paper until we were out of our full-time jobs, on the advice of our
lawyers.

I'd just go and talk with your employers about it. "Hey, I'm really happy
here, but I've been thinking about a side project - I wanted to arrange with
HR that it was my own invention and belonged to me, of course it won't
interfere with my job which is my first priority..." Employers want to keep
good people so if your side project is truly unrelated to your current company
it hopefully won't be a problem.

~~~
bry
Just the kind of advice based on experience I was hoping to see. Thanks

------
earle
Also, since you posted this before leaving the company, you've also given them
documented discovery of your idea that was developed while you were under
employment with them.

Speak to an attorney before posting a question like this to HN, or anywhere
else for that matter.

~~~
bry
I'm not trying to be sneaky or hide anything. Like I said, I want to do this
in a clean way. If I can't do it, I'll come up with another idea later if/when
I don't work for them.

Seems a little silly to have to consult a lawyer before posting to HN. Thanks
for your thoughts though (seriously)

~~~
mattmaroon
That's like saying it's silly to ask a doctor why you have chest pain before
you ask Reddit. This is not an area where you want the opinions of a bunch of
non-experts. Pay the relatively small amount of money to find out the answer
from some who actually understands the relevant law.

~~~
bry
Do you always run to the doctor at the first sign of chest pain? I would bet
you, or most everyone, does just a little bit of research/asking around first.
That's all I'm doing.

~~~
mattmaroon
I don't know. I'm still just shy of 30 so I don't have any experience there.
But if I got any that was recurring, hell yeah.

------
synnik
Read what you posted: "that relate to the Company's business or the Company's
actual or demonstrably anticipated research or development"

Does your idea relate to your employers business in any way?

There is your answer. For anything more specific, talk to a lawyer.

------
crpatino
The clue is here... ""...To the extent any of the foregoing is not deemed to
be a work made for hire, ..."

Write an spec of what your idea is. Find a friend or relative you trust. Have
him/her "hire" you to implement "his/her" idea. Pay taxes on the "fee" you
"charged" for your work. Better off, have the friend write checks to "pay"
you. Actually cash those and and keep the bank tickets.

Later, when you are no longer working for that company, "buy" back the rights
of your works. And don't forget to pray for the friend does not stab you in
the back. Good luck!

------
lionshare
you have to be very careful here, but in a nutshell: if you are hired for
"inventive job" than probably yes. If you are hired for "non inventive" job
(this is not typical for hackers) than it yours. But the details are hard.

