If I'm working at a company, do they have intellectual property rights to the stuff I do in my spare time?


335

I was interviewed by a lady from Zynga and she told me that Zynga doesn't allow developers to have side projects. Is this true for companies in general, or just a minority that Zynga is a part of? Is this sort of restriction legally enforceable? I'm in California, for what it's worth.

Employees Intellectual Property

asked Jan 26 '11 at 16:35
Blank
John
706 points
  • Most popular question in the website presumable because of Joel :) – The Dictator 6 years ago
  • This question only clarifies one thing, how lawyers make so much money. – Craig 6 years ago
  • Speaking of stealing ideas, does [Zynga's Cityville](http://www.youtube.com/watch?v=FRx7W_OTNkc) remind anyone of another popular game? – Hyperslug 6 years ago
  • oh, **the Lady from Zynga** sounds like a cool movie title – Systempuntoout 6 years ago
  • One dodge that I have seen is to apply for patents in your child's name. Given the number of times I have seen primary developers relegated to "with assistance from", it seems to me only just to turn the tables like this. – Peter Wone 6 years ago
  • what about the [shop right](http://en.wikipedia.org/wiki/Shop_right)? My invention remains mine but my employer can use it free of charge for whatever he wants. (I generally release my side projects as open source anyway. My salary is good enough.) – Calmarius 4 years ago
  • What about Stephen's argument from SO? http://stackoverflow.com/a/195875/58805Calmarius 4 years ago
Add Comment

20 Answers


361

The original question was "whether employees are allowed to have side projects." I assume this was just an oversimplification or a misunderstanding by the "lady from Zynga," because I doubt they care if you have side projects... the real question is whether they claim to own what you do in your spare time.

Before I start: Be careful before taking legal advice from this thread. I see enough wrong information here that you could get in trouble. Non-US readers should also be aware that the law and legal practice could be completely different in their country.

There are two pieces of information you would need to know to answer this question:

  1. What state (or country) you are employed in?

    There are state laws that vary from state to state which may even override specific contracts (tghw covers those well ).

  2. What does your contract with your employer say?

    In the US, in general, courts are very lenient about letting people sign any kind of contract they want, but sometimes, state laws will specifically say "even if you sign such and such a contract, the law overrides."

Before I can even begin to explain these issues, we gotta break it down.

Imagine that you start a software company. You need a programmer. So you hire Joe from across the street and make a deal whereby you will pay him $20 per hour and he will write lines of code for your software product. He writes the code, you pay him the $20/hour, and all is well. Right?

Well... maybe. In the United States, Joe still owns the copyright on that work. That is kind of weird, because you might say, "Well, I paid him for it." It sounds weird but it is the default way copyright works. In fact, if you hire a photographer to take pictures of your wedding, you own the copies of the pictures that he gives you, but he still owns the copyright and has the legal monopoly on making copies of those pictures. Same applies to code.

Every software company is going to want to own the copyright to the code that its employees write for them, so no software company can accept the "default" way the law works. That is why all software companies that are well managed will require all programmers, at the very least, to sign an agreement that says, at the very least, that

  • In exchange for receiving a salary.
  • The programmer agrees to assign (give) the copyright to the company.

This agreement can happen in the employment contract or in a separate "Proprietary Invention Assignment" contract. The way it is often expressed is by using the legal phrase work for hire, which means "in this case we have decided that the copyright will be owned by the company, not the employee."

Now, we still haven't said anything about spare time work yet. Suppose, now, you have a little game company. Instead of making software, you knock out three or four clever games every few months. You can't invent all the games yourself. So you go out and hire a game designer to invent games. You are going to pay the game designer $6,000 a month to invent new games. Those games will be clever and novel. They are patentable. It is important to you, as a company, to own the patents on the games.

Your game designer works for a year and invents 7 games. At the end of the year, he sues you, claiming that he owns 4 of them, because those particular games were invented between 5pm and 9am, when he wasn't on duty.

Ooops. That's not what you meant. You wanted to pay him for all the games that he invents, and you recognize that the actual process of invention for which you are paying for him may happen at any time... on weekdays, weekends, in the office, in the cubicle, at home, in the shower, climbing a mountain on vacation.

So before you hire this guy, you agree, "hey listen, I know that inventing happens all the time, and it's impossible to prove whether you invented something while you were sitting in the chair I supplied in the cubicle I supplied or not. I don't just want to buy your 9-5 inventions. I want them all, and I'm going to pay you a nice salary to get them all," and he agrees to that, so now you want to sign something that says that all his inventions belong to the company as long as he is employed by the company.

This is where we are by default. This is the standard employment contract for programmers, inventors, and researchers.

Even if a company decided, "oh gosh, we don't want to own the 5pm - 9am inventions," they would soon get into trouble. Why? Because they might try to take an investment, and the investor would say, "prove to me that you're not going to get sued by some disgruntled ex-employee who claims to have invented the things that you're selling." The company wants to be able to pull out a list of all current and past employees, and show a contract from every single one of them assigning inventions to the company. This is expected as a part of due diligence in every single high tech financing, merger, and acquisition, so a software company that isn't careful about getting these assignments is going to have trouble getting financed, or merging, or being acquired, and that ONE GUY from 1998 who didn't sign the agreement is going to be a real jerk about signing it now, because he knows that he's personally holding up a $350,000,000 acquisition and he can demand a lot of money to sign.

So... every software company tries to own everything that its employees do on paper. (They don't necessarily enforce it in cases of unrelated hobby projects, but on paper, they probably can.)

Software developers, as you can tell from this thread, found this situation to be upsetting. They always imagined that they should be able to sit in their own room at night on their own computer writing their own code for their own purposes and own the copyright and patents. So along came state legislators, in certain states (like California) but not others (not New York, for example). These state legislatures usually passed laws that said something like this:

  • Anything you do on your own time, with your own equipment, that is not related to your employer's line of work is yours, even if the contract you signed says otherwise.
Because this is the law of California, this particular clause is built into the standard Nolo contract and most of the standard contracts that California law firms give their software company clients, so programmers all over the country might well have this in their contract even if their state doesn't require it.

Let's look at that closely.

On your own time. Easy to determine, I imagine.

With your own equipment. Trivial to determine.

Not related to your employer's line of work. Um, wait. What's the definition of related? If my employer is Microsoft, they do everything. They made a goddamn BARNEY PLUSH TOY with a computer in it once. Are plush toys related? Obviously operating systems, compilers, desktop applications, search engines, and games are related to Microsoft's line of work. Hmmm.

OK, what if my employer is a small company making software for the legal industry. Would software for the accounting industry be "related"?

I don't know. It's a big enough ambiguity that you could drive a truck through it. It's probably going to depend on a judge or jury.

The judge (or jury) is likely to be friendly to the poor employee against Big Bad Microsoft, but you can't depend on it.

This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes, it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV.

So... to answer your question. There is unlikely to be a substantial difference between the contracts that you sign at various companies in the US working as a programmer or in the law that applies. All of them need to purchase your copyright and patents without having to prove that they were generated "on the clock," so they will all try to do this, unless the company is being negligent and has not arranged for appropriate contracts to be in place, in which case, the company is probably being badly mismanaged and there's another reason not to work there.

The only difference is in the stance of management as to how hard they want to enforce their rights under these contracts. This can vary from:

  • We love side projects. Have fun!
  • We don't really like side projects. You should be thinking about things for us.
  • We love side projects. We love them so much we want to own them and sell them!
  • We are kind of indifferent. If you piss us off, we will look for ways to make you miserable. If you leave and start a competitive company or even a half-competitive company, we will use this contract to bring you to tears. BUT, if you don't piss us off, and serve us loyally, we'll look the other way when your iPhone app starts making $40,000 a month.

It may vary depending on whom you talk to, who is in power at any particular time, and whether or not you're sleeping with the boss. You're on your own, basically--the only way to gain independence is to be independent. Being an employee of a high tech company whose product is intellectual means that you have decided that you want to sell your intellectual output, and maybe that's OK, and maybe it's not, but it's a free choice.

answered Feb 12 '11 at 12:30
Blank
Joel Spolsky
13,462 points
  • Uh, Joel, I haven't dug into the USC17 recently, but as far as I know they have not changed the copyright rule on work performed for hire. This Wikipedia article explains it: http://en.wikipedia.org/wiki/Work_for_hire so it is important how the contract for the work is stated. Side projects would not normally fall under work-for-hire, but there are other conditions that can apply, as you and others have noted here. – Orcmid 6 years ago
  • The only point I wanted to make about work-for-hire is that EVERY responsible company MUST have its programmers sign a work-for-hire contract because the default copyright ownership is ... unexpected. I wasn't talking about side projects in this section. – Joel Spolsky 6 years ago
  • Just to clarify, although it's tangential to the conversation here. Something done by an EMPLOYEE is work-for-hire by default. Something done by a CONTRACTOR is owned by the contractor by default. The difference between EMPLOYEE and CONTRACTOR can be hard to establish. No well-informed businessperson would hire a programmer without getting the "work for hire" nature in writing. – Joel Spolsky 6 years ago
  • Brilliant answer, but I guess you, of all people, should know about this kind of thing. My co-workers and I discussed this clause in our contracts at my last job, and most of them appeared to be worried since they did hobby programming. My view was along the line of; if you create and then sell (or make money from) a product that competes with your employers core product, or a non-core product that you've been involved with, expect trouble. Anything else should be fine - especially considering that the Australian legal system still seems to have some common sense and morals. – Josh Smeaton 6 years ago
  • @Josh, I suppose the tricky thing about that is what the business owner defines as "core". What if a Fogcreek employee was working on a remote access help desk project at home while unbeknownst to him, management was hatching up plans for Copilot? At the time, I wouldn't have thought that to be in Fogcreek's core. It's tough to determine whether some offhand remark at work inspired you to build something, or if it was entirely your baby. What the employee needs to negotiate is the "nice salary" the employer is "going to pay ... to get [all your inventions]". – Hyperslug 6 years ago
  • @hyperslug in a situation like that I would still believe that you would be able to defend yourself easily, provided you can prove that you have zero knowledge of `trade secrets` regarding that product. However, I would be discussing my continued involvement on my side project with my employer just to be sure. The point really is, if you enjoy creating and you write yet-another-blog-engine, it will be extremely difficult for a web-based game company to claim (or want to claim) ownership. Id be discussing exactly what the employer meant by `no side-projects` as they may have meant 20%(c) time – Josh Smeaton 6 years ago
  • Great answer. In the UK, ARM (the people that design the CPUs) own your dreams. I'm told by people I know that work there that they don't care about side projects, but ARM chips are in so many things now, probably any cool solution involving hardware is owned by ARM. Arrrgh. – Stephen Kellett 6 years ago
  • Inventing and programming - aren't they two different things? – Arne Evertsson 6 years ago
  • Isn't it true that programmers are generally hired for specific projects, like: I want you to create program X, write upgrades for program Y, etc? In that case, I would presume it'd be normal to say that work done on X and Y are property of company; work done on things company hasn't ordered programmer to work on, is programmer's property? – Gnudiff 6 years ago
  • @Shoan - Yes (though laws vary from place to place). I wrote a letter which said, "I'm working on [describe project], outside of office hours and using my own equipment. This project doesn't compete with [employer]'s business, because [example/explanation of why there's no overlap]. Please confirm that project isn't covered by [IP assignment and work for hire defined in employment contract], and that [employer] disclaims all right, title, and interest in this project." I then asked my employer to sign it: someone senior (who had signing authority and could 'bind the company'). – Chris W 6 years ago
  • @Gnudiff, Work like what you describe sounds more like contract work than a regular job. In the majority of non-software as a product shops you work on what needs working on. That might mean working on 10 different products in a year. And just because you don't work on X in a company doesn't mean that the guy in the next cube doesn't work on X. I get paid to write transaction processing software, but the company I work for also owns a few computer games, according to the law if I write a game in my spare time my employer can claim ownership. – Ven'tatsu 6 years ago
  • @Joel. Great thread. Just to murky the waters some more.. What if someone talks to someone at work (on the clock), through that discussion it inspires an idea in the programmers mind which he works on out of hours ? The idea may have be spawned on the clock but the deliver and articulation of it happened out of hours. What would you expect in this case ? – Giulio 6 years ago
  • Thanks for a thorough answer Joel. Does anyone know what the situation is in the UK? – David Caunt 6 years ago
  • @Joel, correct me if I'm wrong but it seems to me that your line of reasoning only holds if Software Patents are allowed. Who cares if an employee develops something after work (even if it's competitive) so long as we're talking about is copyright law and he does not use any proprietary information? No one can sue the other for the idea and everyone may happily sell their own implementation. Problem solved. No? – Gili 6 years ago
  • @Joel Valiant effort to deal with this topic and your answer is substantially correct. But you get many details of the law wrong. There are big differences between patents and copyrights and your analysis blurs that. Further, some of your details between the state and federal law miss some points. A word to the wise, if this becomes an issue for you, get a lawyer. – Speedplane 6 years ago
  • For the protection of the employer against lawsuits of the game designer, shouldn't it be enough if the contract said *anything what you deliver to us is ours* (more formally, of course)? If he does not invent enough, you can still fire him, but you will not produce the games he claims for himself, so he has no chance of doing the lawsuit you showed in your example. – Pa?Lo Ebermann 6 years ago
  • What a company could do (but wouldn't necessarily) is make the employee sign a contract that says anything that they check into the company's version control belongs to the company and anything that they don't belongs to the employee; the act of pushing changes to the VC would be copyright assignment. – Compman 6 years ago
  • You're making a false assumption that watching TV is more refreshing than writing code at night ;) – Hasan Khan 5 years ago
  • Ultimately it boils down to the same thing for most legal issues: If the company is smart, they will set it up to make it easy to sue you and hard for you to sue them. But in practice they will not sue you because they are not interested in you. They are interested in building their own business. So you can create your own side projects. And you aren't going to sue them, because it requires large amounts of effort and money. Just don't expect to grow a big business while you are employed at the company. Keep a low profile and don't do anything that is in obvious competition. – B Seven 5 years ago
  • @JoelSpolsky What if the "product" created by the employee (during the employement period) is already placed in the Public Domain? Is it still possible for the company to assert copyright over "products" which are already placed in the Public Domain? – Pacerier 5 years ago
  • Also, when you mentioned *"In the United States, Joe still owns the copyright on that work."*, do you mind clarifying what does "in the United States" mean? Does it mean Joe physically in United States at the time when he signed the contract, or does it mean the company's building is located in United States, or does it mean both? – Pacerier 5 years ago
  • This entire matter is a discussion of legal risk, in a broad sense of the term. Personally, I stand by the morals that are behind California Labor Code Section 2870. If I was an owner of a company that had a team member create a killer app, or buy a wine shop, and left us to build a new business, I would say, "Go for it!" and offer to provide advice and guidance. I might even ask if I can invest! However, I agree that with software, it's a touchy subject. For instance, if employee A is working on a side project like our top secret project B. The answer is simple: transparency. – Codewise 4 years ago
  • "We are kinda indifferent." The next part makes that indifference seem very grudging, though, just saying. – Joe Z. 4 years ago
  • Do you know if a similar law exists in the European Union? – Houen 4 years ago
Add Comment

111

California's Labor Code, Section 2870 reads:

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.

There are a number of other states with similar laws. I've compiled a list of states that have laws restricting what IP employers can claim ownership of:

*The California statute also requires an employer to inform employees about the law. Note that the laws that govern your employment contract are usually based on the state in which you work, not the state the company is incorporated in. And, as always, if you have questions about your employment contract, have a lawyer help you understand it and how it applies to state law. Also, this list may not be comprehensive. If you know of any other states, please add a comment and I'll update the answer.
answered Feb 12 '11 at 07:34
Blank
Tghw
629 points
  • nice work, very helpful – Henry The Hengineer 6 years ago
  • +1: Very nice! Thank you. – Bob Murphy 6 years ago
  • This is one reason why Silicon Valley happened in California and not, for example, Texas - you could use your day job to effectively bootstrap your startup. – Metadaddy 6 years ago
  • "Note that the laws that govern your employment contract are usually based on the state in which you work, not the state the company is incorporated in." I assume that also means that if I live in a state with one of these laws (like North Carolina) but work at an office in a state without such laws (like South Carolina), the laws of the state where I work apply? – Kip 6 years ago
  • [An equivalent bill](ftp://www.njleg.state.nj.us/20122013/A2500/2028_I1.PDF) has also been filed with the NJ Legislature and will hopefully be voted in durring the 2012-2013 regular session. – Brandon Boone 4 years ago
  • @Houen I do not know. You'll just have to dig into the labor statutes yourself. – Tghw 4 years ago
Add Comment

31

A few thoughts on this (answer ported over from HN ):

  1. I have done transactional work and litigation in and about these areas for nearly 30 years in Silicon Valley. Based on that experience, in practical terms, the risk you deal with in doing side work boils down to this: it is rare that an employer will make a claim to IP you develop on your own time and using your own resources but, when it does happen, its effect is pretty horrific.
  2. California gives you more scope only because it has a law on the books that generally prohibits employers, on public policy grounds, from making claims to IP generated by employees working on their own time and using their own resources.
  3. Even in California, however, an employee owes duties to his employer and one of those is that you don't misappropriate your employer's IP for your own use. This is why the California law says that you don't keep your side-project IP for yourself if it is in your employer's line of business or anticipated line of business. You can imagine the chaos that would result if any employee could state that, "no, that valuable IP that I came up with might have directly concerned what my employer was paying me to develop, but, in fact, I developed that particular key piece on my own time, etc."
  4. In this sense, there is a common sense element to this area of law as applied in California. You typically will sense, without being told, whether the work you are doing on the side is capitalizing on the things your employer is doing or if it is truly unrelated.
  5. That said, don't mess around with this sort of thing. It is both contract-specific and local-law-specific. That means general statements you hear from time to time (including those I just made) may or may not apply to you. If what you are planning to do has commercial value, then make sure to get it checked by a good local lawyer who can guide you through the pitfalls and explain the alternatives. This is particularly so if you are not in California.
answered Feb 12 '11 at 12:50
Blank
George Grellas
141 points

39

Rather than spend hours worrying about whether or not they can enforce a given contract, I have solid universal advice that will apply regardless of the state you are in.

Don't work for people whose policies you detest. Don't bank on them not being able to enforce a contract in your logic for taking a job with them. If you don't like their employment practices, don't work for them. It's that simple.

When they can't find top talent because of the abusive policy, they'll either fix their practices or suck as a company, but that won't be your worry. The solution here is to vote with your feet.

answered Jan 27 '11 at 01:12
Blank
Russell Steen
380 points
  • Damn right. In a class last quarter, my teammates and I decided that we had no moral qualms about building killer robots, but we couldn't feel right working for Zynga. – Xiong Chiamiov 6 years ago
  • This doesn't answer the question. – Matt Fenwick 4 years ago
Add Comment

40

By default (i.e. without a contract in place), no. Anything you do for them "on the clock" is considered "work for hire" and is theirs, but anything you do "off the clock" is yours.

However, a growing (and f!@#$ing stupid) trend is that, through your employment contract, your employer owns everything you do, on and off the clock. Their logic being, you're being paid a salary and therefore you owe your life to the company. I find this absolutely appalling, but as you've seen from Zynga, a lot of employers are idiots... and sadly, a lot of employees are hungry to work and put up with it. Consider this a big red flag.

Sadly, this is enforceable and has been enforced several times... and I believe even affirmed in 9th District. Consider the long-standing case of DSC Communications v. Evan Brown. Short story: dude had been working on a hobby project (some reverse compiler), took a job at DSC, quit, and then spent several years in court, only to lose the idea he had been developing before and during his tenure.

So, be careful. If you want your employer to own your thoughts... then sign with Zynga. Otherwise, there are plenty of other places that would be happy to have you.

answered Jan 26 '11 at 17:10
Blank
Alex Papadimoulis
5,901 points
  • Evan Brown's case was in Texas, which is much more pro-employer than California. – Bob Murphy 6 years ago
  • @Bob Murphy - true, but it's (innapropriately) cited quite a bit in high-tech lawsuits of this nature, since it was one of the few that made it all the way through trial/appeal – Alex Papadimoulis 6 years ago
  • I doubt California state courts will pay much attention to that precedent, since our statutes explicitly say pretty much the opposite. – Bob Murphy 6 years ago
  • I take issue with your comment: "and sadly, a lot of employees are hungry to work and put up with it. Consider this a big red flag." ====>>>> IMO reality is more like this "and sadly, a lot of employees are hungry [to be employed, put food on the table, have a roof over their head and therefore] put up with [signing onerous contracts]." – Trevor Boyd Smith 6 years ago
  • @Tever Boyd Smith - that's what I meant (i.e. what you had in brackets). Not realy placing the blame on the developers, just the situation (and the f!@#$ing stupid employers). – Alex Papadimoulis 6 years ago
  • @Trevor: some people will accept slavery if you don't make them a better offer. The fact they are hungry do not justify them signing bad contracts, since doing so actually harms *other* people who are hungry too but do not accept to be deprived from their rights. – Lohoris 6 years ago
  • @looris: slavery is not the same as having to sign an onerous contract to get work. -->> maybe you could reword your comment so that you talk directly about the situation (needing to sign an onerous contract to get work)? – Trevor Boyd Smith 6 years ago
Add Comment

20

Regarding California, that lady from Zynga is full of hot air.

Since the 70s that I'm aware of, courts have repeatedly ruled against companies that try to pull the "we own anything you do in your spare time" or "you can't do side projects" nonsense.

In California in particular, moonlighting is heavily protected by law. Basically, as long as what you're doing on your own is legal and doesn't compete with your employer or otherwise "actually constitute a material and substantial disruption of the employer's operation", they can't say boo. In fact, if they let you go for moonlighting that doesn't truly adversely affect their "enterprise-related interests", you can sue them for lost wages and benefits and force them to reinstate you in your job.

California courts also tend to side with employees on things like this. For instance, even if you sign a non-compete agreement, the company pretty much can't enforce it in California. There have been several situations where people at Microsoft had signed non-compete agreements, quit, moved to California, joined Google in direct competition with Microsoft, and Microsoft couldn't do a thing about it.

Try typing "california moonlighting law" into your favorite search engine. You'll turn up lots of useful hits. Interestingly enough, I didn't see anything about any court cases, which may mean employers haven't wanted to try to enforce anti-moonlighting clauses in California since a change to the labor code that expanded workers' rights back around 2000.

Of course, I'm not a lawyer, your mileage may vary, void where prohibited, etc. But I've done side projects at every California job I've had since I moved to the state in 1987 and never had a problem.

answered Jan 26 '11 at 17:09
Blank
Bob Murphy
2,614 points
  • The moonlighting and non-compete laws do not protect your intellectual property. This is a big issue in the entertainment industry (e.g. Disney owns your cartoon idea while you're employed there), and studios have fought and won rights (or at least large royalties) many-a-times over this. – Alex Papadimoulis 6 years ago
  • But you still have to agree to this in a contract; especially in high-tech (where ideas drive business) you'd have a hard time proving that the idea doesn't rightfully belong to your employer, especially since you said you'd work off-hours to develop things like this for the company (in your contract) – Alex Papadimoulis 6 years ago
  • A lot depends on what you're doing. Zynga's core business is developing casual games using Flash and similar technologies. So if the OP went to work for them, and at home developed casual games using Flash, there might be a problem. But if the OP's day job for Zynga was developing Flash games, and his side project was building robots using TI-OMAP embedded CPUs, I can't imagine a California court thinking Zynga had any rights to that. – Bob Murphy 6 years ago
  • Also, it's the norm in Silicon Valley and the rest of the Bay Area (Zynga is in San Francisco) for programmers to do side projects. In fact, I'm having a hard time thinking of competent developers I know who don't do something on the side. In my circle, probably 90% are doing Android or iPhone apps, open-source contributions, etc. When I interviewed at Palm a few years ago, a manager remarked that if I joined I'd have to get approval to continue supporting an old, non-competing contract client on my own time. I looked at him like he was a lunatic and decided not to work there. – Bob Murphy 6 years ago
  • +1 for an informative discussion on 'how it works' in California. – Russell Steen 6 years ago
  • If I work for a stock broking company and I gave a tip for a friend of mine on the phone and got a reward for it, should I let my employer take any part on it? No need, if I wasn't using company's data. – Subhash 6 years ago
Add Comment

11

Joel and other have put it well -- almost certainly, any serious company will have you sign an agreement that will claim that they own basically everything you invent at any time until you leave the company. This is fairly standard.

The best, most reliable way to solve your problem is to tell them about a side project you want BEFORE you start working on it (or, when starting employment, anything you've done before or already started) and get a written addendum that excludes that project from the employment agreement. Usually they will still stipulate it needs to be done on your own time and with your own equipment.

Most reasonable companies will allow you to amend your list of projects not owned by the employer if it is not directly competitive with what they do. Some employers are not as nice, and will want ownership even if it's not related. Maybe you shouldn't work for them.

answered Feb 12 '11 at 17:55
Blank
Lgritz
361 points
Add Comment

11

Let me give a brief example of why companies may ask for this sort of thing.

I was called in to a (non-software) company where they had a small team of developers writing software for in-house use. An employee was writing one of their key software packages - version 1 was in use and everyone was happy... then he wrote version 2 but (and here's the stinker) his version 2 had a strong dependency on [his claim:] "a piece of software he'd written himself in the evenings that was nothing to do with their business" (it was basically a large sparse matrix library that did some of the heavy lifting of the business logic).

He'd built v2 on top of this library, but was happy to let them have a license to use "his software" for free, but he retained the source code (the debate was at what point any of this had been arranged and supposedly agreed)

They now wanted him to develop a v3 with various new features, but he claimed the new demands would require a new version of "his software", and he's only doing this if they agreed to pay for a license. It was only at this point that the management became aware of the issue.

The guy was a cancer and was basically holding them to ransom by with-holding the source of a component that he claimed belonged to him, but had been written entirely while he worked for them and was designed solely for use with the software he developed "during the day".

Now how can they avoid this again - they could try and draw up employment contracts that say that you can work on your own stuff as long as it doesn't overlap, but they're not technical enough to make judgements and line calls, and what would happen if someone claimed that some of their business logic had been thought up "at home while watching TV" and they'd just happened to write the code the next day.

So it was far easier for them to stipulate a blanket clause that they claim ownership over any software you write, day or night, while you work for them. There's a risk they might lose some potential employees, but that was a risk they could broadly account for, but being held to ransom by a rogue employee was not a chance they were willing to take again.

Big companies are rarely that interested in the side projects you have as long as you're doing your job properly (although I know some companies who think that if you have the time and intellectual capacity to still code in the evenings then you're not working hard enough and would perversely then mark you down as a slacker if they thought you were doing so) but they DO care about the risk of someone claiming personal ownership to something that they paid for. And blanket claims of IPR are an easier starting position for any fine calls...

answered Feb 12 '11 at 22:20
Blank
Tim
61 points

11

Friendly reminder: contracts can be negotiated (and dumped in favor for something else as already mentioned).

answered Feb 13 '11 at 01:28
Blank
Just Outsourcing
21 points

9

Before accepting any employment agreement, look for terms that allow side projects. My employer has fair and clear terms laid out, which allow me to do lots of things in my spare time, and not have to rot my brain watching TV.

These are essential terms in a fair and balanced employment agreement

  • A clear definition of External Developments. These are your side projects, and they should be allowed. But there should be restrictions to make it fair to the employer, too.
  • External developments must not use company time, equipment, or other resources. Why should the company sponsor your hobbies?
  • External developments should not relate to the business of your employer. It is wrong to take your knowledge and create a competing product. Of course, everything is related to the business of some large companies. So you have to use your judgement and keep the risk of being sued low.
  • You must not use an External Development, or allow your External Development to be used by the employer or incorporated into your employer's products without permission, and if so, you give the company full use of the source code to use as it sees fit.

These are paraphrased from Research in Motion's agreement in Canada.

It is not in anybody's interest to let your employer turn you into a couch potato. Even if your side projects are explicitly disallowed by a company, you have to balance the risk of being sued which may be really, really low. Keep on your employer's good side. Be a valuable and indispensable employee, build a stellar reputation, and the odds are that they will "hold the bus" for you and not bother you about it. Of course, if you are hiding things, demanding licenses, and being a jerk, you are asking for trouble.

answered Feb 13 '11 at 03:11
Blank
Steve Hanov
596 points
Add Comment

9

To add to Joel's point, I think it is important to note that if you want to do a side project while working at a company you need the following:

a) Review your contract. Joel's point will most likely be valid.

b) Notify your employer: "I will be working on project foo, it does not conflict with your business. I want an agreement that work I do on foo will be owned by me"

b/a) Your employer agrees, all is great. Have it in legal writing.

b/b) Your employer does not agree. You either drop the project or get another job.

EDIT A big note here: Not all companies are greedy. Sometimes they may claim rights only to the IP you created that is related to your field of employment. Let's say you are working for an airline ticket company, they might request that any IP created to buy/sell tickets or any underlying system created for that purpose they can claim. Which means you can still write video games and not violate your contract or be forced to give up rights.

answered Feb 13 '11 at 16:50
Blank
Dmitriy Likhten
171 points

6

All companies that I've worked for presented a contract stating something similar to "All products and services created by the employee, in and outside of business hours, are considered intellectual property of the employer". Since I do have side projects, I have always negotiated the removal or rephrasing of this point. And so far it has worked. (Note that I'm in an eastern-European country, so things are likely to differ in the US)

So - read your contract, and negotiate the parts that you don't like.

answered Feb 17 '11 at 07:31
Blank
Bozho
155 points
  • The problem is that some laws are mandatory. Ie. that the law cannot be disregarded, even if you have a contract. – Jørn E. Angeltveit 6 years ago
  • @Jørn E. Angeltveit of course, this is a general truth - laws cannot be overruled by contracts. But laws, in general, are more protective to employees. – Bozho 6 years ago
Add Comment

5

This is an interesting thread, but I wonder if there is another aspect to the question and the answer received. Since Google, and perhaps other Silicon Valley firms, are noted for supporting on-the-job side projects (the result of which I imagine Google still owns, a different question and something Google might be generous about), the interviewer may have understood the question to be about that kind of "side project."

It would seem that the questioner might have needed to be more specific.

Something I did, when going back into corporate employment after 10 years as an independent, was identify my owning of a sideline business that I would continue to operate on my own time and have segregated from anything that I did related to my responsibilities as an employee of the hiring corporation. There wasn't even a peep about it. That was over 20 years ago, but the work-for-hire doctrine was already a law.

answered Feb 12 '11 at 13:02
Blank
Orcmid
111 points

6

If I were you, I would ask for specific details, before jumping to conclusions. "You can't have side projects" could mean an awful lot of things, but it certainly can't (enforceably) have its apparent literal meaning of you can't do any software development in your spare time.

So look at the policies and contracts and understand what they are actually asking you to agree to. Find out whether the emphasis is on (i) restricting your activities, or (ii) asserting ownership of their results. Look at how broadly or narrowly this is defined. And if there is something specific you want to be free to do and it seems to you reasonable, discuss it with your prospective line manager.

This kind of policy is against the broad trend, but in intensely creative industries I think it will stay entrenched for years to come.

answered Jan 26 '11 at 18:49
Blank
Jeremy Parsons
5,187 points

3

It is pretty standard for software companies to claim all your work while in their employ. If you go to work for Zynga, make sure you include in your contract a comment about prior inventions still being your own. This will protect you from the company claiming rights to your former "side projects".

answered Jan 26 '11 at 17:09
Blank
Kenneth Vogt
2,917 points

1

If the company took the extreme example, that it owned the results of your labor 24/7, then you would be if not a "slave", at least some type of indentured servant. I can not believe that such contracts would be enforceable anywhere in the US anymore. However, non-compete contracts that don't allow employees to produce directly competing during or shortly after their employment generally can be enforced to a greater or lesser degree.

I have to say Joel's answer is nonsensical on why companies force employees to sign these contracts. Every line of code that an employee writes 9-5 on the job with a company computer belongs to the company. Any line of code that an employee writes in their spare time with their own property should never be checked in to the employer's code base. That is a clear cut diving line and prevents any scenarios of one programmer allegedly holding up an acquisition.

answered Feb 22 '11 at 03:29
Blank
James
71 points

1

Not by default. It should be governed by your contract.

If you have a section to the lines of "software developed on company time and/or using company resources" pertaining Intellectual Property the width of that defines your rights.

Also, what kind of project you may undertake is commonly governed by your Non-compete clause.

As Alex points out, I hear the trend being companies applying this clause very widely. Too sad.

answered Jan 26 '11 at 19:59
Blank
John Sjölander
2,082 points
  • Good to know. Seems pretty harsh though, doesn't it? – John Sjölander 6 years ago
Add Comment

1

What if I travel for my company? When I go back to my hotel room [paid by my employer], pull out a personal laptop I brought along on the trip (I can fit two laptops in my computer bag), and punch out some code on my personal laptop.... am I still on company time? Do I still fall into the category of "working for hire" or being "on the clock?"

I have no employment contract with my employer. They essentially hired me with a letter saying I will work on various projects for a salary. I write software.

My personal laptop has development tools that I paid for. Nothing on my personal laptop belongs to the company or was paid for by the company I work for. I had the personal laptop before I joined the company... In fact, I brought this laptop to an Interview to demonstrate some projects I worked on.

I'm really curious about what constitute company time when you travel for your employer...

answered Mar 31 '11 at 22:12
Blank
Kilo
129 points
  • it sounds like you are asking a new question. The answer section is reserved for answers to the original question, not additional questions. Thanks! – Michael Pryor 6 years ago
Add Comment

0

If I work for a software company and write a novel that is published. Can the software company claim they ownership of the novel and take all the profits? Could they legally force me to sit down and type up any ideas I have in my head about the novel and claim ownership of it?

So if I work for a software company that is basically a big contracting company and does not produce any products. Can they claim ownership of anything I develop? Most of the employment agreements are pretty generic. We own everything. Just because they are in the 'software' business would they own a product then? Even if their contract says 'we own everything'.

Virtually every employee makes you sign something that says we own everything. It is not like you have a lot of options.

answered Apr 27 '13 at 04:20
Blank
Bob
164 points
  • Your answer provides a lot of rhetorical questions, but it would be nice to sum them up into an actual answer. Your last line simply reiterates one of the premises of the question. – Joe Z. 4 years ago
Add Comment

0

Usually, there is no loyalty factor if you are working on side projects. For example if your work at employer and your side projects are in the same line then any innovative thing you come up, who has got the claim to it? For if your employer is having a product called 'Project management" and you are the super duper Java, PHP coder assigned to write a new piece of the same product. Since you are so efficient, now you have a lot of spare time in the evening. You know you can develop a project management application in a short period and maybe better than the product at your employer. So will you be loyal to your employer?

So ethically speaking, even if you decide to side projects and your employer allows you pick a niche that does not clash with your employer's product.

answered Feb 18 '11 at 06:54
Blank
Nilesh
420 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Employees Intellectual Property