My company is asking me to sign away ownership of any intellectual property conceived by me

Question

I'm entering an internship with an office of a global company in India. In the offer letter of my internship, the company states that I will convey ownership of any intellectual property conceived by me in the future, even after the termination of the internship.

[I understand that companies sometimes ask you to convey ownership of intellectual property if done during working hours or if made using the company's resources. But this talks about intellectual property made after the termination of internship as well.]

To quote from my offer letter: (1)

All Intellectual Property, irrespective of whether made, devised or discovered during normal working hours or using the facilities of the Company, whether alone or jointly with others, shall be the exclusive property of the Company. You hereby convey ownership in all such Intellectual Property to the Company upon inception or development. To the extent that the Company is not the immediate owner of the Intellectual Property, you irrevocably assign all Intellectual Property to the Company, in perpetuity and on a worldwide basis.

And then: (2)

You shall always, whether during the course of, or after the termination of your internship:

a) Not (unless with the prior written consent of the Company) apply for any patent, design or other registration as the case may be, either in India, or in any other part of the world for any Intellectual Property conceived or made by you.

And then later on in the letter: (3)

d) Waive all moral rights arising from any such works or material so far as you may lawfully do so in favor of the Company.\

Towards the end of the section, the company does state this: (4)

Nothing in this Internship offer shall oblige the Company to seek patent or other protection for any Intellectual Property or to exploit any such Intellectual Property.

It shall be presumed (but subject to proof to the contrary) that the subject matter of any application for a patent, design or other Intellectual Property registration filed by you or any assignee or agent of yourself within 12 months after the termination of your internship, and relating to goods or services of a kind with which you were concerned in the course of your internship, is Intellectual Property made by you during your internship with the Company.

(1), (2) and (3) have no mention of this "1 year" deadline -- (4) talks of this 1 year period but (4) alone does not exactly mean that the company can't exercise (1), (2) and (3). (1) even specifically says "in perpetuity".

Is this even legal? I know I should probably ask the company, but it looks if I take this up with the company, I'll be the only one doing so from my cohort of interns.

Answer 1

This is terribly exploitative. I have seen clauses like this for people working in research & development where they are employed to create intellectual property, but not for anything after the employment, and definitely not for an internship.

In the EU and in California this would be very unlikely to hold up in court, so you would never accept this in a contract. In India, I unfortunately can’t tell you what happens if you refuse to accept this. If you have more offers, I’d have a good look for a better position.

Now assume Bill Gates had taken up an internship before starting Microsoft...

PS. If any IP that you create 12 months after your internship belongs to this company, there is no way I would hire you during these twelve months. So this is really unacceptable.

Answer 2

Signing off intellectual property rights to work you created as part of practicing your employment functions is pretty standard. But this contract goes far further than usual, at least in my jurisdiction (I do not know about what's usual in India).

But a contract is the result of a negotiation. When a contract has clauses you can not accept, then you can just propose changes.

What I would do is take this contract, make the following amendments to it, and send it back:

(1) All Intellectual Property, irrespective of whether made, devised or discovered during normal working hours in the course of your internship or using the facilities of the Company, whether alone or jointly with others, shall be the exclusive property of the Company.

(2) You shall always, whether during the course of, or after the termination of your internship: a) Not (unless with the prior written consent of the Company) apply for any patent, design or other registration as the case may be, either in India, or in any other part of the world for any Intellectual Property conceived or made by you in the course of your internship.

(4) It shall be presumed (but subject to proof to the contraryunless stated otherwise by you in form of a written affidavit) that the subject matter of any application for a patent, design or other Intellectual Property registration filed by you or any assignee or agent of yourself within 12 months after the termination of your internship during the internship, and relating to goods or services of a kind with which you were concerned in the course of your internship, is Intellectual Property made by you during your internship with the Company.

(3) is an interesting case. As far as I understand copyright law (but I am not a lawyer) the whole point of moral rights is that they can not be legally waived, which would make the whole paragraph meaningless. But you might want to do some research about the legal interpretation of this in your jurisdiction.

If they reject my amendments and insist on the standard contract, then I would ask them why they insist to own intellectual property I create in my freetime, including property which has no economical value for them (like a love letter to my girlfriend or the music I play with my garage band) and ask them to make a counter-counter proposal which protects their legitimate interests without infringing on my private life. If they still refuse to do that, then I would refuse to sign.

Answer 3

Sign it or don't sign it. It really depends whether you think you're going to do anything really worthwhile in the 12 months after you leave.

And that's assuming it's something related to the "goods and services" you were working on at this company.

Years ago, I worked for a startup which did something similar. A few weeks after signing, when I had created something of beauty, the CTO waived the document in my face, laughing that the libraries I had used, crafted over years, now belonged to the company.

I had actually read every word of it before signing and thoroughly understood what it said. It was a boiler plate contract that they had hacked about and added to, to "save" money.

When I pointed out they'd got the clauses the wrong way round, and the entirety of that company's IP and products now belonged to me - The look on the smug ba5tard's face was priceless.