
The Sex Tape Litmus Test - dustin
http://laverick.org/blog/2012/12/23/the-sex-tape-litmus-test/
======
dsr_
The primary function of a legal department is to provide advice that prevents
legally actionable mistakes.

This advice does not have to be sane, or efficient, or indeed have any
consideration towards the interests of the company other than "prevents
legally actionable mistakes". A few days ago HN saw an article about setting
goals and perverse incentives. This is a simple example.

Hypothetically, someone was reviewing the Sony USA employment contract and saw
that there were, perhaps, non-video-game related developments which might be
valuable. Then they asked the legal department "Please supply contract terms
that give us as much as possible." And after an hour or two of research, they
did.

The surprising thing to me is that they tried to change language for existing
employees out of cycle. If they did it during a regular review cycle, even
fewer people would have noticed.

~~~
dexen
_> The primary function of a legal department is to provide advice that
prevents legally actionable mistakes. This advice does not have to be sane, or
efficient, (...)_

Strong disagreement. As a counterport, would you agree to the following: ``the
primary function of a programming department is to crank out code. the code
doesn't have to run predictably, nor be maintainable nor indeed have any
business requirements. KLOC is the king.''?

When I'm programming privately in my spare time, my code doesn't need to run,
be maintainable or useful or anything. But as long as I'm clocked in during
office hours, my work should further company's goals, in harmony with other
teams and projects. And just as much with legal departments: those should
consider the overall effects of advice they give out. If not them, who else is
to do such analysis -- some meta-legal department?

Been there just recently; an employment contract template prepared for my
company by a lawyer was so one-sided and full of risks for potential
employees, I stood up to the CEO and voiced against its proposed form. I've
warned the CEO a lot of self-respecting hackers would rather give up offer
than work on such conditions. The contract, while legally covering the
company, would have detrimental effect on our ability to hire good hackers in
the first place.

~~~
jamesaguilar
It seems like a lot of engineers, both here and elsewhere, have a very
simplistic view of what other departments do. I've seen similar simplistic
statements about design and management. I guess that's just part of human
nature, to develop the view that only _your_ work is complex or nuanced.

~~~
anthonyb
In this particular case though, there's not a lot of complexity or nuance, is
there? It's a blanket "We own all your IP" clause in a contract.

~~~
jamesaguilar
Maybe . . . are you OK with the legal department assuming you are a lazy
simpleton if you launch software with any bugs? Especially considering any
misfeatures may have been implemented under management's direction?

~~~
anthonyb
I'm not sure that I see your point. Adding extra bits is more work for the
legal team, and might lead to 'bugs', but a clause like this is going to lead
to pissed off engineers who might leave.

To further mangle the analogy, what if I release bug free code that doesn't do
what it's supposed to do?

------
redcircle
California has a nice law that says that the employee owns IP created on his
own time, unrelated to work, etc. This is a reason I moved to CA: the state I
was in lacked such a law, and all the tech companies had contracts that failed
the sex tape test. I suspect that for a place to flourish like Silicon Valley,
it needs a law that protects self bootstrapping startups.

~~~
Xylakant
I guess the "unrelated to work" might be a point of debate once you create IP
of high value.

In fact, in Germany we have the "Arbeitnehmererfindungsgesetz (ARBNERFG)" [1]
which stipulates that your employer has first right to all patents and
inventions related to your work, even if you create them in your spare time.
The basic reasoning is that your employer supplies you with all tools and
ressources required for the invention in question. It would be way too easy to
just clock out, return to your desk and a minute later write down the world
formula and sell it for billions. You're entitled to a compensation though.

The law looks a little stupid when applied to computer science but makes much
more sense in a research or engineering context.

[1] I just adore german legal terms.

~~~
dsplittgerber
It's also ridiculously outdated. It's from 1957 and based on an outdated,
traditional understanding of "big" industrial/engineering companies and their
employees ("the little guys"). Also, it protects the companies' interests to
the detriment of the employees' interests, which is understandable given that
it is based on a war-time law (WWII) which was supposed to support German war
engineering.

~~~
Xylakant
I'm not so sure that it's ridiculously outdated. Sure, it could use a brush-up
but it acknowledges the basic fact that your employer often spends time
educating you and allows access to ressources in your line of work that form
the basis of your inventions - hence the requirement that the invention be
related to your work. Fact is that inventions are rarely a stroke of genius
that happens instantly in vacuum. They're often refinements and improvements
of readily known things. Quite often they're obvious and simple in hindsight.
It's a hard balance to strike, but just giving the option of moving all
"inventions" to after-hours so that the employee gets all benefits won't cut
it either, especially with modern work-time models such as flex-time or home
office. I don't have a perfect solution, but giving the employer first-buy
rights seems like a reasonable starting point for a compromise. The law
stipulates a reasonable and fair compensation for the work provided.

------
mgkimsal
I've brought this up as the "child porn" clause, and had brought it up in an
employment contract once many years ago. Basic language was "we own anything
you create". I said "I don't really think you want that - if I create some
child porn, you're the owners". I seem to remember I had some less restrictive
language placed in my contract vs that one, but I don't think it made a change
to anyone else's contracts.

Yes, it felt a bit 'nuclear' dropping such a charged statement like that, and
even when I bring it up as an example in conversation, some people cringe - a
'sex tape' analogy might be less offensive to some, but the basic premise
still stands. Any company that wants to claim ownership of every piece of
content or code I 'create' needs to understand what that _really_ entails. It
might actually give some people license to work on legally questionable stuff
(not child porn so much as, say, banned crypto), knowing that they don't
really 'own' it and thinking someone else might be responsible for the
consequences.

~~~
jiggy2011
IANAL , but I believe in this case the offence would be in the creation and
distribution of this content not necessarily in owning the IP.

Otherwise you could technically make the same argument about instagram for
example.

~~~
mgkimsal
nothing said about distributing it, although I see your point on the creation
of it. But I'm not sure I'd be able to make that distinction about anything
else valuable - "well, company x, you might 'own' this, but I created it and
can do whatever I want with it". They want the benefits without any risks -
ain't gonna happen.

Well... I say that, but I think everyone might have their price. I've got
mine, and yes, sure, would I sign away all my IP created during employment for
$x? yes, but no one has yet come close to that $x in job offers I get.

~~~
jiggy2011
Employment contracts are almost always written to supply as many benefits to
the employer and mitigate as many risks as possible.

The worst case scenario for them is that they find out that certain clauses
are not enforceable. In reality I imagine it is often known that some may be
unenforceable but they are added anyway on the basis that the employee doesn't
know this.

~~~
mgkimsal
One of the few things I've learned over the last 10 years or so is to be much
bolder in work/job relationships. If I see something in a contract that is too
one-sided, I strike it out and bring it up and say "I'm not agreeing to that".
Will I sign a contract with, say, a 5 year non-compete (even assuming the non-
compete is enforceable)? Generally no, unless there's a huge compensation
package tied to make up for the time when I can't use my knowledge in the
market. Would I sign one with a 3-6 month non-compete? Probably.

15 years ago I'd sign anything. Today, not so much.

~~~
jiggy2011
This is true, many people don't realise that contract terms are technically
negotiable in the same way that salary and things are.

------
guard-of-terra
I think that any funny clauses in the contracts should be abolished and the
worker/employer relations should only be regulated by law.

This makes me pro-regulation and anti-market, but unfortunately I see exactly
zero ways in which market can make contracts better. What are you expected to
do in this situation - quit?

~~~
sskates
Yes, you can quit and work somewhere else. Also you can read about what Sony
does on Hacker News and decide not to apply there for a job in the first
place.

I really hope you are not actually against customized employment contracts-
there are a lot of cases where they can be useful. What might be better is
prohibiting instances of terms you find offensive. For example, California's
moonlighting law, which effectively voids such clauses in employment
contracts: [http://www.quora.com/Legal-Issues/Which-California-laws-
prot...](http://www.quora.com/Legal-Issues/Which-California-laws-protect-
moonlighting)

~~~
pi18n
I think for many people it's going to be hard to fulfill the following:

> ... except for those inventions that either: (1) relate at the time of
> conception or reduction to practice of the invention to the employer’s
> business, or actual or demonstrably anticipated research or development of
> the employer ...

As a programmer, there's not a lot I can do that is going to be considered
wholly unrelated to what I'm employed for... at least it would be murky enough
that the employer would have a good court case. This is infinitely more so for
anyone working with Google, Apple, or any other company that has got their
fingers in everything.

~~~
pi18n
xugle, it seems your account got caught by the reapers. I found your comment
to be informative, so it must have been some sort of mistake.

------
nakkiel
IP assignment is the only thing I really negotiate when I take on a new
position. I had one company back-pedal as they were trying to change their
terms from _nothing_ to _we own anything you make, any time_. I had the
CEO/CTO of another company write in plain English that anything done in my
free time and without using company-owned facilities/hardware was my own IP
(their legal bla-bla was unclear).

In the first case, the corrected terms got applied to everybody in the company
but in the second, I believe I'm the only one who is protected thank to that
written note.

I always use the analogy of an English teacher writing a book on his spare
time. How he would actually be encouraged to do so, weighting how this would
reflect nicely on the school he works at etc..

~~~
colanderman
> I always use the analogy of an English teacher writing a book on his spare
> time. How he would actually be encouraged to do so, weighting how this would
> reflect nicely on the school he works at etc..

I think limiting IP ownership to right of first refusal is important for the
same reasons. If I'm guaranteed that _either_ the company will use the IP I
developed, and I will (presumably) be rewarded for it or at least be able to
include it on my resumé, _or_ that I can own the IP myself, it is worthwhile
to me to work on projects in my spare time.

However, without that guarantee, it's entirely likely that works I produce
which are significant to _me_ but not to my company will end up gathering dust
on a shelf. Hence I'm disincentivized to work on such (potentially enriching)
spare-time projects.

------
matt2000
In case anyone is in a position to hire programmers and cares about treating
creative people fairly, we have an open source Hacker Employment Contract:
<https://www.docracy.com/hackercontract> that tries to fairly handle stuff
like IP created after hours.

~~~
dustin
Thanks for posting this. Standard documents are great. Even if you don't get
to use them they provide a point of reference for negotiating terms.

------
bretthardin
While I was working at Earthlink in 1999, they had a similar clause and I had
a similar thought.

Although not around a sex tape, I though about a computer virus released from
my Earthlink corporate email account. If I sent it out the virus technically
belonged to Earthlink and not me. However, after talking to a lawyer about it
years later, he explained there is ways the corporation could get out of the
clause.

------
xsmasher
Every time I've gotten one of these documents I've amended it to "any IP for
aspect foo of business bar." Example: video training software, or freemium
mobile games. My employers have not objected, and it's a restriction I cane
live with.

Honest employers want to keep you from competing with them while on the
payroll, and want to avoid any claims that company IP belongs to you. Amend
the document to address that and they may agree.

------
jasonjei
IANAL, but I have heard of something called the Reasonable Person Standard.
Since the US is based on Common Law, I believe this standard could be used if
this were really tested in court:

``The reasonable person (historically reasonable man) is one of many tools for
explaining the law to a jury.[1] The "reasonable person" is an emergent
concept of common law.[2] While there is (loose) consensus in black letter
law, there is no universally accepted, technical definition. As a legal
fiction,[2] the "reasonable person" is not an average person or a typical
person. Instead, the "reasonable person" is a composite of a relevant
community's judgment as to how a typical member of said community should
behave in situations that might pose a threat of harm (through action or
inaction) to the public.[3] The standard also holds that each person owes a
duty to behave as a reasonable person would under the same or similar
circumstances.[4][5] While the specific circumstances of each case will
require varying kinds of conduct and degrees of care, the reasonable person
standard undergoes no variation itself.[6][7] The "reasonable person"
construct can be found applied in many areas of the law. The standard performs
a crucial role in determining negligence in both criminal law—that is,
criminal negligence—and tort law. The standard also has a presence in contract
law, though its use there is substantially different.[8] It is used to
determine contractual intent, or if a breach of the standard of care has
occurred, provided a duty of care can be proven. The intent of a party can be
determined by examining the understanding of a reasonable person, after
consideration is given to all relevant circumstances of the case including the
negotiations, any practices the parties have established between themselves,
usages and any subsequent conduct of the parties.[9]"

------
btilly
Note. The contract, as described , would not hold for California employees.

See [http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab...](http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab&group=02001-03000&file=2870-2872) if you don't
know what I'm talking about.

(That said, Sony probably does enough different things that the difference
does not matter much to most people.)

~~~
arkem
In California the contract is often modified to include something like "except
where prohibited by law" which means that the company gets IP assignment any
time that 2870 doesn't apply.

------
andrew93101
(tl;dr: in California, such agreements are unenforceable)

I don't know what state the author was in when he was working for Sony, but
California State law prohibits such arrangements in employer agreements (Labor
code section 2870):

[http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab...](http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab&group=02001-03000&file=2870-2872)

2870\. (a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret information except
for those inventions that either: (1) Relate at the time of conception or
reduction to practice of the invention to the employer's business, or actual
or demonstrably anticipated research or development of the employer; or (2)
Result from any work performed by the employee for the employer. (b) To the
extent a provision in an employment agreement purports to require an employee
to assign an invention otherwise excluded from being required to be assigned
under subdivision (a), the provision is against the public policy of this
state and is unenforceable.

------
at-fates-hands
The interesting thing to me is how is this even enforceable? Most of my
friends keep a tight lid on all their freelance work - how would they even
know someone had broken this contract?

------
kabdib
My current employment contract says that even IP /related/ to my employer's
business, as long as it is done on my own equipment and my own time, is mine.

It's an enlightened place.

I expect to have to prove it, to some extent, if it ever came up. Which is one
of the reasons I have a private github account; commit logs on machines not
controlled by me might be useful.

------
josephlord
I think my Sony (Sony Europe not SCE) contract said "in the course of
employment" which I went back to HR for clarification that it meant things
related to or done for work. The in/during difference being very key. I seem
to recall that I got the necessary clarifications and I've left now so no need
to worry.

------
shadowmint
I'd love to know of any instances of this (work done in personal time being
legally given to the company person worked for at the time) going to court.

Sounds like a non-compete clause to me; ie. basically unenforceable.

------
gnu8
This story is missing the best part, which is where the compliance officer
bluescreens after being asked about whether the sex tape would be owned by
Sony.

