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I've been employed at my current workplace for a few months now. This month all employees received an updated employment terms document, with one clause reading as follows:

IP Ownership

This raises several questions for me, the most important of which are as follows:

  1. Is this even a fair ask, professionally, especially for work done outside of Employment Hours, and for work completely unrelated to the Employer's domain of business?
  2. Will this be legally binding, should this be violated?
  3. What am I not permitted to do under such a clause? Can I or can I not...
    a. Contribute to existing open-source projects?
    b. Start a new open-source project of my own?
    c. Start a new closed-source project of my own, resulting in a freeware?
    d. Start a new closed-source project of my own, resulting in a proprietary software?
  4. Does this include currently on-going work started...
    a. Before my employment with the company?
    b. Before this revised terms document was rolled out?

Lastly, will contesting this with my employer put me in a spot where I am either forced to accept the terms, or forfeit the job?

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  • 3
    Yes. This is common boiler plate for many companies.
    – Joel Etherton
    May 4, 2021 at 19:39
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    @JoelEtherton: I see. How then does the world of open-source / freeware / commercial software progress, if individuals are locked down by such terms of companies? Do the contributors all operate under pseudonyms / anonymity? ;)
    – SNag
    May 4, 2021 at 19:45
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    Section 1 covers inventions that "relate... to the business [or R&D] of the Company", not "work completely unrelated to the Employer's domain of business". If you work for a software company and build a better mousetrap, the Company doesn't own it.
    – Nuclear Hoagie
    May 4, 2021 at 19:45
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    1, It's completely normal. 2, it's inconceivable they will change it for you or anyone. 3, you are slightly misinterpreting it; to simplify this just covers "their" technology.
    – Fattie
    May 4, 2021 at 20:33
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    Usually there is another section with an appendix to list items you believe to be excluded and have them agree to it, I've done that with every job I've started in more than a decade.
    – mxyzplk
    May 4, 2021 at 22:10

3 Answers 3

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The first clause contains the conditions. It's saying that if you use company resources (equipment, supplies, facilities, trade secrets) either during working hours or outside of them to create something, or if you recreate the company's inventions ("reduction to practice"), either existing or proposed, then the company owns that work.

It's pretty standard. It's basically to stop IP theft, to stop you from using their resources to make money, and to stop you from attempting to patent work in your name which they paid you to do.

If you exclusively use your own resources, and don't do it on company time, and don't recreate the company's work, then they don't own whatever you create.

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  • If you exclusively use your own resources, and don't do it on company time, and don't recreate the company's work, then they don't own whatever you create. -- this was what I was hoping to hear, thank you. Now I must get this by the company too, in writing.
    – SNag
    May 4, 2021 at 20:45
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    They will just tell you to take legal advice, which is what you should be doing anyway, not asking some randoms on the Internet.
    – Philip Kendall
    May 4, 2021 at 21:41
  • As long as its not "related" , if its related work actually not.
    – Neuromancer
    May 4, 2021 at 21:47
  • Even if I use my own resources, do it on my time, and it isn't an area that the company is currently in, there are companies that would attempt to claim ownership. So, it is best to get approval in writing before doing stuff on my own. It all depends on how much I am being paid. Sometimes, it is worth getting a different job if I want to do something on the side.
    – David R
    May 4, 2021 at 21:52
  • Read carefully. OP would have an obligation to disclose no matter what, specifically including even cases in which the company would not claim ownership. Once disclosed, company will de-facto assume power to approve or reject. They can pretty much shut down the flow of any independent project this way.
    – Pete W
    May 4, 2021 at 21:55
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It is standard operating procedure. As a professional, I expect that type of wording.

What this does is to give right of first refusal to the company for anything that you invent on the side, but may have benefited from what you learned while employed. We don't always know what can be profitable for the company to use. For example, Glidden Paint hired a guy named Percy Julian who invented a number of soy processes including the ones to create steroids. Glidden was able to profit from these for a while.

So, the rest of your questions really have to be answered by the company who hired you. These have to be answered on a case by case basis - and get the answers in writing.

How do people participate in open source? By getting written permission from their employers first. There are many companies who give up their rights in order to benefit the greater good.

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This has been asked before, but to keep it brief:

  • Completely standard
  • Maximalist wording by default
  • Negotiable if you are a high status employee (in some places this includes valued tech staff). In smaller companies, they may be in particular most concerned about the "business subcategories" of the various things under the "IP" umbrella, like industry specific "know-how" and vendor/client relationships. I have asked for and received specific exceptions in areas unrelated to company activity, after cleared by legal. How any employer reacts will vary obviously.
  • If your direct manager thinks this is reasonable, you can be sure there exists a process for customizing the language - the question is do they think it's worth the lawyer time for your particular level of employee.
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  • I feel it might be confusing, perhaps just plain wrong, to mention it is "negotiable by elite employees". I mean, on the planet, like "2" people would be able to negotiate this. Perhaps 1. It is, simply: non-negotiable.
    – Fattie
    May 4, 2021 at 20:35
  • Wasn't my experience. I was 0% elite anything, but was lucky enough to have supportive managers, and apparently the lawyer didn't think it was a big deal as long as the business and technology areas that remained exclusive to the company were neatly and broadly defined. Maybe the small company aspect should be emphasized.
    – Pete W
    May 4, 2021 at 20:53
  • Subsequent experience made me conclude it's more typically not available for everyone.
    – Pete W
    May 4, 2021 at 20:58

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