Question: Intellectual property and employment

Posted by davidmcnab 5 years, 1 month ago to Technology
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Consider the employment contract phrase "[any invention created by the employee] arising from the employee's employment with the employer [shall remain the intellectual property of the employer]".

What are the interpretations of "arising from the employee's employment with the employer"?

1. Does this include any kind of invention create by the employee after-hours, even if completely unrelated to the employment?

2. Does this include inventions that are inspired by the intellectual challenges of the employee's employment, but not connected to the employer's technology or products? (Example: someone working as a petrol engine designer at an auto company, who designs in his spare time a jet engine that could be used in a car).


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  • Posted by dbhalling 5 years, 1 month ago
    Employment contracts vary and contract law is very flexible. The requirement to assign your invention to your employer (despite the contract) is usually limited to employees who are hired to invent and to inventions directly related to what they are hired to invent. However, many companies try to over reach.

    Assuming you fit these criteria, if you invent something on your own time and with your own materials that is not directly related to what you were hired to invent you do not have to assign these to your employer. So the answer to 1 & 2 are no.

    This is general legal principles and if you have a specific situation, you should discuss it with a competent attorney.
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    • Posted by 5 years, 1 month ago
      Warmest thanks, Dale. I'm tempted to go off and search for a short course in "Intellectual property for inventors". Especially since my country has just signed on to a massive regime change in that area (the TPP treaty).
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  • Posted by mccannon01 5 years, 1 month ago
    Be careful here and read the fine print or have your lawyer read it before you sign anything. I just went through this because I refused to sign an employment agreement because of its invention/copyright clause. I'm retired, but like to take on little contracts from time to time if I like what is being done. I primarily prefer to work through the engineering firm I retired from because they are familiar with what I do and keep me in mind. The problem was, that firm couldn't keep me on as an employee or keep hiring and "firing" me due to the overhead expense. Therefore, the solution was for me to "hire on" as a temp with an employment firm that handles that kind of arrangement and then use them to get paid.

    The problem was the Temp firm had a lengthy contract for me to sign and part of it was verbiage that took ownership of any invention or even software algorithm I invented/created as long as I was in their employment. There was no exclusion for what I came up with on my own time unrelated to them or a client. They said the invention clause only means pertaining to them or their clients. I told them that's not what the clause says and in a court they won't care what you or I say it means, they will only see what it says. I said if they want to make money off me they will fix it. They wrote in an exclusion clause that I was satisfied with and away we went.
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  • Posted by term2 5 years, 1 month ago
    Companies that have clauses like this seem to want slaves and not thinking beings. Employees who sign them probably wont have anything of real value to offer their companies anyway. Maybe it means that companies really dont want inventions to disrupt the landscape unless THEY control them. Who wants to work for a place like that anyway

    Best thing to do if you are an inventor is to be a freelancer or start your own company and avoid the whole problem.
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    • Posted by $ jlc 5 years, 1 month ago
      I don't agree, term. A person could be a brilliant inventor but careless about 'bureaucratic nonsense' and just sign some form - and be trapped. You assume that someone who can do one thing well (invent) can do something else well (understand legalese) in addition.

      I think the answer is not 'if they sign, they are not worthwhile' but - as mccannon says - they must be cautioned to read carefully even if they despise legalese. And the existence of such a clause implies that it is worthwhile to the companies to 'net' unwary prey.

      Jan
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  • Posted by Herb7734 5 years, 1 month ago
    I can only speak to #1 that occurred in my experience as a graphic novel publisher. If you worked for me or was contracted by me to illustrate a story whose conception was mine, and the layout, marketing and distribution were mine -- I own it. If the concept and work is done fully completed and you brought it to me for publication and distribution, whether you're an employee or contractor you own it, but I get an agreed upon percentage of the net.
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  • Posted by DrZarkov99 5 years, 1 month ago
    When I had my space tourism company, the employment agreement had an intellectual property sharing agreement. Profits from an idea developed by an employee related to the company mission would be shared on a 30/70 employee/company split. Inventions not directly related to the company mission, but using corporate resources (with permission), or pre-existing inventions developed while employed with the company had a 70/30 employee/company split. It definitely created a win-win mindset.
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  • Posted by $ Olduglycarl 5 years, 1 month ago
    I when through that with DeWalt power tools. I created many things at DeWalt but they never bothered me when I patented the expandable ring band...that's as unrelated as it gets.
    So the answer to your first question is No.

    Admittedly, DeWalt was not your average company...they were actually honest and reasonable and didn't micromanage us at all.

    Can't help much with your second question other than to say they would have to prove you got the idea "as a result of employment'.

    If your an inventive person you know your inspiration can come from anywhere and sometimes, seemingly from thin air.
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    • Posted by 5 years, 1 month ago
      Their wording "arising from the employee's employment" has worried me for its breadth and vagueness. Consider the scenario of going to the pub with a workmate after work, talking general tech stuff over a couple of beers, getting an idea out of nowhere and getting the design down on a couple of beer coasters. There would be many thriving tech firms that started out that way. However, there would be some IP litigators who might try arguing that the "arising from" wording includes this scenario.
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      • Posted by $ Olduglycarl 5 years, 1 month ago
        It might be worth a discussion with a lawyer that understands the foreign language of contract law.

        Your propulsion system may be different from the one your paid to work on but it is still a propulsion system none the less.

        Your right, the contract is way too vague.
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  • Posted by $ CBJ 5 years, 1 month ago
    The issue came up peripherally in Atlas Shrugged. When asked why he abandoned an early version of the motor after the Starnes heirs took over the company, Galt replied, “It was their father’s property. He paid me for it. It was made on his time.” Galt later built a working version that supplied power to the Gulch. Presumably the original rights lapsed due to the motor’s abandonment. Certainly the Starnes heirs had no idea it even existed.
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  • Posted by robgambrill 5 years, 1 month ago
    Last one I had to sign said it continued for six months after I left the firm, not sure how enforceable that one was.

    My friend's dad was an engine designer for GM. He had to sell the company his patent-able idea (modification to rotary engine design) for a dollar, but he got to keep the patent certificate for his wall.

    To answer your questions...

    1) Usually, yes.

    2) Usually, yes.
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    • Posted by jabuttrick 5 years, 1 month ago
      I think dbhalling is correct on this. The answers are usually no and no. Your mileage may vary by state, however. As to your six month contract, are you sure it dealt with inventions and not competition? The former would be very unlikely to be enforceable, but the latter may be depending on the "reasonableness" of the restriction in terms of time and location effected. Again, state law varies greatly in this area and should be consulted.
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      • Posted by robgambrill 5 years, 1 month ago
        OK, I stand corrected on the legal aspects. Lawyer up, and renege on the employment contract.

        If you really have a bad relationship with the people you work for, maybe you should get out anyway. If your not being paid to think, then by all means go somewhere where you are. Even if that means striking out on your own if you have to!

        But if you are being paid to come up with solutions, and you signed that deal, I'd say that you are bound by it ethically.

        I'll yield as well on your specific question. In my (limited personal) experience the non-disclosure agreement, the intellectual property assignment and the non-compete agreement are all on the same (rather long) piece of paper.

        I will say in my defense, that often the solutions to a seemingly unsolvable problem only pop into my head after I walk away from it for a while. I thought they were protecting themselves from somebody solving the problem they paid them to work on, but only solving the problem after they had left their employ. Maybe they can't legally do that.

        But are you guys really saying that while I can't say what they did, and I can't go to work for their competitors, I can sell my idea to anybody (with the possible exception of their competitors) as soon as I walk out the door, no matter when I came up with it? If those IP agreements are not enforceable in court, I suppose you can sign them with no intention of abiding by them.

        That seems like one of those things that is perfectly legal, but still wrong to do if you say you agree. They often make employment conditional on signing the agreement, I always thought we were just getting the issue out of the way by having me assign intellectual property rights to them before we started as part of the deal.

        Sure fooled me, Huh? Hell, I never thought much of Human Resources departments anyway.

        I guess it is not as clear cut as I thought. You and Dbhalling are probably right, the guy needs to talk to a lawyer before he does anything.
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  • Posted by LibertyBelle 5 years, 1 month ago
    On a related matter, I run into similar problems
    when I go to a new website to look for jobs. The
    Terms of Service take a very long time to read,
    and then there is the Privacy Policy. I hate read-
    ing these things, but I consider it irresponsible to
    sign on to an agreement without reading it. (And
    then, they insist on the right to unilaterally re-
    vise it from time to time). And rental leases are
    nearly as bad. I hate for leases to be longer
    than the Encyclopaedia Britannica.
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  • Posted by $ blarman 5 years, 1 month ago
    I had several acquaintances (my father's friends) when he worked at Hewlett-Packard who had patented a variety of things - both business and non-business related. At that time (this was 15+ years ago), HP actually paid the engineers for their patents - they filed and obtained the patents (funded by HP if they were work-related) and in exchange they got to hang them in their cubicles and HP got to benefit from them. The non-work related ones you just had to notify the legal department about and get a signed statement saying that you weren't going to use them to compete against HP and they left you alone. One of my friend's dad's actually patented a new swivel on a wind-surfing board (his passion). This kind of arrangement seems to me to be a pragmatic and reasonable way to approach the matter. I have no idea if this is still the way they handle things, as I've been gone from there for 10+ years.
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  • Posted by sfdi1947 5 years, 1 month ago
    Point of Law: It depends on case by case circumstances. One sure way to avoid that pitfall is to read any contractual agreement and to line out that phrase or any having similar meaning. If the prospective employer withdraws his offer, well you probably didn't want to work there anyway.
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