Disputing Intellectual Property Section in Contract

Question

I know its pretty standard for companies to add an IP section to the contract, but the one I have received for the new job I have accepted seems pretty full on to me:

Intellectual Property 19.1 You acknowledge and agree that any work created or developed by you (whether alone or jointly) during your employment will belong to the Company or any Group Company if it:

19.1.1 is capable of exploitation by us in the normal course of the Company’s or any Group Company’s business; or 19.1.2 is so created or developed during the course of or in connection with your employment by the Company.

19.2 To the extent that they do not vest automatically, you assign to the Company or any Group Company all copyright, design rights and other intellectual property rights in any such work and undertake to do anything reasonably required to ensure that such rights belong to or are assigned to the Company or any Group Company and to assist the Company or any Group Company in protecting or maintaining them.

19.3 If any moral right under the Copyright Designs and Patents Act 1988 arises in respect of any work created or developed by you (whether alone or jointly) in the course of or in connection with your employment you will:

19.3.1 waive such rights as against the Company or any Group Company and their employees; and

19.3.2 exercise such rights against any third party only as the Company or any Group Company requests and in accordance with the Company’s or any Group Company’s directions.

So I want to ask for changes in the most polite and (legally) correct way, this is my current email:

Thank you for getting back to me, I am afraid I can not sign the contract in its current form.

I participate in the Open Source community, develop games and small applications in my spare time that would make me feel uncomfortable with section 19.

With section 19.1

"You acknowledge and agree that any work created or developed by you (whether alone or jointly) during your employment will belong to the Company or any Group Company if it: "

I would suggest

"You acknowledge and agree that any work created or developed by you (whether alone or jointly) on behalf of the Company will belong to the Company or any Group Company"

This would ensure you own the IP you have right to, and I would keep mine.

Section 19.2: "To the extent that they do not vest automatically, you assign to the Company or any Group Company all copyright, design rights and other intellectual property rights in any such work and undertake to do anything reasonably required to ensure that such rights belong to or are assigned to the Company or any Group Company and to assist the Company or any Group Company in protecting or maintaining them."

To

"To the extent that they do not vest automatically, you assign to the Company or any Group Company all copyright, design rights and other intellectual property rights in any such work directly related to the industry (data science solutions) of the company and undertake to do anything reasonably required to ensure that such rights belong to or are assigned to the Company or any Group Company and to assist the Company or any Group Company in protecting or maintaining them."

This would cover anything in the data science domain, stopping me from developing rival applications etc but would allow me to have ideas for and create games and noddy applications in my spare time.

Section 19.3 I would refuse to waive my moral rights to IP unless it was framed to specifically mean work for the company, but in that respect the 'creator' would be the company anyway so I personally don't see a need for section 19.3 but I am willing to consider an alternative.

I understand its a standard contract and I know it can be awkward to arrange different terms for different employees, however IP is something I take quite seriously and as a personal recommendation I know there are lots of great developers staying away from companies purely on IP rights (especially when it comes to being able to participate in open source software).

-Thanks, [name]

Does anyone else have experience with this kind of request? Am I approaching this in the right manner? Am I overreacting? I already made a point of mentioning IP in the interview and I believe the hiring manager is in line with my thinking.

p.s. I believe that if I took this role under the current contract (which has not yet signed by me) I would feel obligated to find alternative employment. It would be too late financially for me to reject the offer outright.

Answer 1

I think you should take the matter seriously. If you sign it like this, it would be effective and no informal clarification you may receive now would in fact matter in future.

I think it never hurts to ask. I once suggested a similar change and they agreed. Maybe you would be better to call HR or whoever and discuss possible cases and will or will not they insist on exersizing this clause, then adjust them accordingly. If they refuse to change anything, then you will have something to think about - will you agree with these terms or not.

I've heard that some companies say something like "We like your proposal but cannot change because of lawyers etc." I don't know how to react to it but tend to think that it is just an excuse to shut you up now, and keep control on you. So it is stil option 2 in my previous paragraph.

Answer 2

I was once in a similar situation -- the company I worked for was acquired, and the new owners required that we sign various contracts as conditions of continued employment, including one about intellectual property.

What worked for me was to present my problem in a short message initially. Instead of sending a longer message with specific wording changes, send a short message along the following lines:

Regarding section 19, I currently develop games and participate in open-source projects about X in my spare time. These projects are unrelated to $comapny's business interests. What do we need to do so that I can continue working on these kinds of outside projects? Is there a provision for an exclusions list?

In my case there was, in fact, a place for me to declare outside pursuits in which I would retain full IP. I listed them, they reviewed, and we both signed. They even agreed on a category listing (like games would be for you), so I didn't have to enumerate everything I might pursue while employed.

Answer 3

You're probably over-complicating this a little.

I'd simply seek to clarify that any personal work you do in your own time isn't covered by this contract. If it is, then seek to work out under what circumstances and move forward from there.

Also seek to understand what

alone or jointly

Actually means, because this seems to be the key phrase that's not fully understood here.

Insisting on changes to a contract before signing to it can result in delays or your application simply being rejected - a hiring manager isn't going to say "Yes, great" to your changes without going through the Legal department first (and that's not something that people generally relish).

Answer 4

Honestly, if you have a specific project in mind ask for an exception to for that, rather then altering the nature of the contact to give you free range in almost anything that not related to the company.

The problem (with free range) is you are shifting the burden of proof on them should the two of you disagree on what is "related to there business", and what if they want to enter that business later? Also, they have no idea what you are doing, so its up you to decide for them if you are in bounds with the agreement. See: https://www.joelonsoftware.com/2016/12/09/developers-side-projects/

Go to you boss and say something like, "I started dabbling in Games programming as a Hobby and would like to put out a few phone games, but my contact does not allow for that, Can you grant me an exception for these 3 games?" - He will have to run it by legal.

Answer 5

In addition to negotiating with the company, it may help you to know your rights. That contract would be fine in Texas but not in California (to the best of my knowlege; IANAL, TISNLA). A short consult with an IP or employment lawyer will probably not cost much money, and will tell you how much you need to worry about the clauses you dislike.

There should be no problem with asking for them to be changed. The company is unlikely to do anything worse than say, "No changes". They've already invested a significant amount of work into deciding on you. If they do refuse changes, you have to decide whether to sign anyway or walk away.