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I've been actively coding for many years, including freelance works, open source works and etc. I'm joining a new tech company as their software developer which has the clause below in their contract,

Any work or inventions made in the course of your employment shall be the property of the Company.

Does this mean all my work, even my personal work outside my normal duties will be theirs?

Will I be well within my rights to ask them to reword it to say any work I do for my duties or using companies resources will be theirs, but everything outside of it will be mine?

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    Where are you located? The answer differs for different countries. – Lehue Nov 27 '20 at 7:37
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    Unanswerable without knowing the legal jurisdiction, not sure why anyone has... – AakashM Nov 27 '20 at 13:17
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The clause is common in every job I've had. In the last few jobs I've raised the broad language as an issue for the same reasons (personal work, open source, etc.) and it's never been an issue to get the wording narrowed to exclude my personal work, or removed entirely. Just ask, you may get the contract changed. Of course, as Nelson raised in their answer, this may mean a retraction, but if it's a show-stopper for you, make your demands as it's better to lose an offer than to lose your IP.

  • These clauses are now illegal in California. law.justia.com/codes/california/2010/lab/2870-2872.html – D. SM Nov 27 '20 at 16:02
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    @D.SM That reference seems irrelevant. I think you misunderstood what "in the course of your employment" means. Basically it means "everything that your employer tells you to do", not "everything you do 24/7/365 while you are employed". – alephzero Nov 27 '20 at 16:48
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In Australia, at least, "in the course of employment" does not mean 24/7 continuously from the day you're hired to the day you leave the company. Roughly speaking, it means while you're on the clock, with some nuances explored in these two cases:

http://eresources.hcourt.gov.au/downloadPdf/2013/HCA/41

https://www.kwm.com/en/au/knowledge/insights/federal-court-clarifies-meaning-course-of-employment-20151026

By that definition, work you do at home in your personal time shouldn't be considered "in the course of employment". But I don't know whether the law is the same where you are, or (also important!) whether your employer sees it this way.

Therefore, I would advise sending an email along the following lines:

Hi, I just wanted to clarify something in my contract. Currently I am involved in various freelance and open-source work [insert details] in my personal time. I would like to confirm my understanding that this is not considered "in the course of my employment" with you and that the Company would not claim IP rights to the results of this work.

And keep a copy of your email and their reply!

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    I work as a web dev, and my contract had a non-compete. I did get legal advice, and they basically said it would only really apply if I had an executive position. As a non executive, the non compete would only stop me from going after company clients, not prevent me from working in the same domain with my own clients or for another company in the same domain. – flexi Nov 27 '20 at 12:50
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    @JanDorniak Isn't that the definition of "work for hire"? I think that's in most copyright laws that work you create as an employee belongs to the employer. – Barmar Nov 27 '20 at 14:57
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Of course. It is within your rights to negotiate the contract. It is also within their rights to retract the offer.

Whether they would do that or not is something we cannot possibly know. Maybe they have had bad experience with previous employee taking company IP, so they want to legally make sure it doesn't happen again.

This is where proper negotiation comes in and neither of you can make a "hard" demand. Of course, the company can simply move to candidate 2, and you can move to company 2, but note that neither of you are legally bound to accept the contract. However, if you do accept, then you are legally bound to it, whatever it may be (within legal constraints).

Do not take this legal clause lightly. Non-compete conditions are extremely hard to beat against a company that really wants your stuff, and they can absolutely destroy you.

  • This is not true everywhere. Which country are you talking about? – Chris Nov 27 '20 at 18:51
  • What part is not true? You cannot negotiate a contract in some countries? – Nelson Nov 28 '20 at 2:12
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How broadly they can claim your work as their IP may depend not only on your country, but also on finer grained jurisdictions within your country. Within the United States, this can vary from state to state.

California generally says that if you develop the work entirely on your own time with your own resources, then it's yours. There's a big caveat, however: If the invention relates to an existing business or area of research of the employer, then the employer can still claim it. Even if you weren't aware of the fact that your employer pursing that line of business.

If you work for a massive tech company with their fingers in everything and with all sorts of (sometimes secret) projects in development, then it's very hard to create anything that clearly escapes the caveat. The company will probably just assume they own everything.[*]

These big companies are more likely than smaller ones to have an internal review process, where you disclose your work to them and ask them to waive their copyrights. (I don't know of any company that will let you keep a patent, regardless of the field.) Most big tech companies also support open source work, so if you want permission to contribute to a couple favorite projects, ask.

If you join a small company with one or two well-known lines of business, even the broad claims are easier to navigate, and you can be reasonably certain your personal project doesn't overlap with the interests of your employer.

The contracts I've seen with broad claims also have a form you can fill out to list your prior works which are then explicitly excluded and the form is made part of the contract as an addendum.

Finally, if you are an independent contractor (as opposed to an employee), make very sure your client claims only the work they are paying you to create. If they try to claim more than that, point out that you might have multiple clients at any given time and that broad claims would be incompatible.

[*]: This leads to all sorts of absurd contradictions. Here's one example: You're a software engineer for Foo Tech, which assumes everything you create belongs to them. You use a vacation day to interview with Barsoft. Barsoft asks you to write a code sample as part of the interview. Who holds the rights to that code sample? Have you violated your current employment contract? Does the contract infringe upon your right to free expression? Does it interfere with your right to seek employment in your field?

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This is standard language. Let's look at it from the company's perspective. They are paying you to create a product. They want the ability to monetize that however they see fit without needing to worry about employees filing copyright or other intellectual property claims demanding royalties or input on the strategic direction of the company. This clause in the employment contract makes it un-ambiguously clear that the things you are paid to produce are the sole property of the company.

The other thing they want to prevent is you quitting and taking your work with you to your new employer. This clause makes it un-abmibuous that this would be theft because you don't own your work.


I'm a fan of a variation of this clause that goes like this:

Any work or inventions made during the course of employment on paid hours, using company resources, or using knowledge gained from proprietary company sources shall be the property of the Company.

I personally think that's a fairer boundary: don't do open source or freelance work using the company laptop or servers, and don't implement a feature for the company and then go home and implement the same thing for an open source project, thus undermining the company's value proposition.

This wording leaves you open to do freelance or open source work, as long as it's unrelated to the work you're doing for the company.

  • Does "on paid hours" hold up for workers on salary? – Geoffrey Brent Nov 28 '20 at 0:22
  • @GeoffreyBrent I think so. I'm on flexible time salary, and there's still a distinction between my scheduled business hours (or makeup hours) and my personal time. – Mike Ounsworth Nov 30 '20 at 14:42
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This phrase or a phrase like it, are very common in software employment contracts; almost every job I've had has had one. It usually is restricted to things you do on work hours, for work purposes, with work equipment, so that's probably what it means.

However, you should definitely ask. Recruiters are often friendly about this sort of thing, so definitely shoot them an email and ask "does this include stuff I do on my personal time?", and they'll probably say no, and that's fine, but make sure you have that in writing in case you ever need it in a legal situation.

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