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I'm in process of starting a new job, and the employment contract contains a clause that states any intellectual property I created before (!) signing the contract becomes the property of the company once I sign the contract, only excluding the IP listed explicitly.

Is this a normal practice in some places, or is it something unusual? I've never heard of a requirement like this.

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  • 37
    @use_ok, No, not at all. I was just wondering if they felt entitled to the IP you created for all your previous employers/clients, or to any IP you created during your academic career. Sep 3 '21 at 20:41
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    I'm not sure about IP law in Mexico, but isn't everything you do in life creating some kind of IP? Do they really think they should own your Tweets, or the love notes you sent to your sweetheart in elementary school? What about the things (like StackExchange questions) that are otherwise licensed under Creative Commons or other open licenses. Could this be a mistake? A test to see if you are paying attention?
    – Theodore
    Sep 3 '21 at 20:58
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    No, this is not normal. Even the more severe contracts I've seen specifically leave a place to list prior IP. (Which is also obnoxious, since it requires violating confidentiality of previous counterparties to be protected, but I digress). Anyway, unlike other questions of this type, in your case they should not be surprised at all if you push back.
    – Pete W
    Sep 3 '21 at 21:23
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    @JoeStrazzere I've written a lot of code in my career, and listing it all is pretty much impossible.
    – user_ok
    Sep 4 '21 at 16:03
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    I think it's unlikely that it actually says what you think it says, because that would be so obviously insane. If it does say that, they need to fire their lawyers and you should absolutely not sign it, just on principle. Sep 5 '21 at 19:35
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Is this a normal practice in some places, or it's something unusual? Because I've never heard of the requirements like this.

This depends a bit on the wording of the phrasing. Asking to disclose prior IP is quite normal, but a wording like "all your prior IP is ours" feels unusually aggressive.

The company wants to protect against the following scenario: "employee invents something during work hours, company wants to patent it, employee claims they invented it prior to employment". That is a valid concern but the exact method is typically negotiable.

For example it should be restricted to IP that's within the "business domain" of the employer and not cover "any possible IP".

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107

Strike that clause out of the contract, initial the change, and send it back to them unsigned asking them to initial the changes you've made.

I suppose you could consult a lawyer, but consulting a lawyer costs money.

To me, this contract is a red flag. And if they're not willing to initial and countersign your changes, I would walk away from them.

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    I wouldn't sign a total IP clause anyway. Only relinquish IP related to your employer's problem domain. Other stuff you create should belong to you.
    – Dúthomhas
    Sep 4 '21 at 20:45
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    I think contracts people are slowly getting better about IP.  My last couple of jobs claimed copyright only on stuff I actually did for my job.  But for a couple before that, I had to contact the company pointing out that I wasn't going to sign over to them unrelated personal projects, music, holiday snaps, etc.; and I suggested wording tweaks limiting their claim to IP created on company business, time, or resources; in both cases they promptly sent me an amended contract (which I signed), and no more was said.  If they can see your changes are reasonable, there shouldn't be a problem.
    – gidds
    Sep 4 '21 at 21:03
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    I agree it is a red flag, but it could just be an overzealous external law firm who drafted the contract (common in smaller firms). Definitely I'd encourage you to push back, and if they are not yielding, then it's a biggie. But I'd start off with giving benefit of the doubt.
    – Bennet
    Sep 6 '21 at 11:23
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    +1 @gidds Anyway people who worked for universities, contract research labs, etc will have any work they did there using their equipment claimed by the employer for some period beyond which if the employer doesn't register it, it reverts to the employee. The independently-achieved IP is the employee's own and, notwithstanding what clauses may be in a contract or even signed, that cannot reasonably (hence legally) be claimed by a new employer. It would be even more unreasonable than having a golfer's agent claim a % of on-course earnings - where only his caddy may be able to help a bit.
    – Trunk
    Sep 6 '21 at 11:24
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    One place I worked for wanted to have "first right to refusal" on anything I made, and I do mean anything. I told them about my side business and they let me submit documents proving my ownership of business and products as well as limiting the IP to only what I made/designed/built during business hours. If they hadn't let me do that, I wouldn't have worked for them. So I made sure that I didn't do anything on "company time" that I wanted to use for my business. Sep 6 '21 at 17:39
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Not only is this not normal and totally unreasonable, it is beyond insane.

Take this question, for example: you licensed it to Stack Overflow, Inc. under an irrevocable, perpetual license. Therefore, it is impossible for you to legally sign this contract:

  • If you don't transfer ownership of this question to your employer, you violate the Terms of your employment contract.
  • If you do transfer of ownership of this question to your employer, you violate the Terms of Use of Stack Overflow, Inc.

Whatever you do, you will violate someone's Terms.

Similarly for everything you created for any of your previous employers. You cannot legally transfer ownership of that IP to your new employer. Only your old employer can do that. So, you have to go to every single one of your former employers, and ask them to transfer ownership of every product you worked on to your new employer.

Say you did an internship at Microsoft after school and fixed some bug in Explorer? Congratulations, your new employer is now the proud owner of Windows, and Microsoft is no longer allowed to sell it!

That is just ridiculous.

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    @JoeStrazzere that is quite a burden, which will pass the "insane" threshold instantly. Unless listing it as "any IP created before signing" is acceptable? That clause is just insane.
    – Chieron
    Sep 4 '21 at 12:16
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    @JoeStrazzere Do you personally know all TOS you'd break by signing this? Including stuff from your youth? Generating the exhaustive list is basically impossible, even though neither company will actually ever enforce their IP ownership. The clause is just ridiculous, and most likely void in many jurisdictions.
    – Chieron
    Sep 4 '21 at 16:45
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    @JoeStrazzere, to give you an idea of the complexity, when I was in second grade, I made a poster for my science-fair entry. I estimate that it will take fifteen minutes of research to find out if it is (a) an unpublished work, and thus in need of listing, or (b) a work published in the US prior to 1989 without a copyright notice, and thus in the public domain.
    – Mark
    Sep 4 '21 at 21:53
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    You can give a license of the IP of anything you wrote on SE to anyone else. I imagine you can even give full ownership (to the extent that you own it) of that IP (even though SE will retain the rights to it they already have). If they claim ownership over your past IP, I doubt this would apply to what you created while working for other employers, because that IP isn't yours in the first place. It would be like saying you claim ownership over any assets someone currently owns, and asserting that would apply to anything they sold in the past as well. It just doesn't make sense. Sep 5 '21 at 10:18
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    SE isn't even the problem. IP that he created before for other employers is. I'm not sure about Mexico, but in most jurisdictions, IP created on the job, for the job, by law belongs to the employer. So he would be not just in breach of some contract or TOS, but breaking the law.
    – Tom
    Sep 6 '21 at 4:46
13

the employment contract contains a clause that states that any intellectual property that I created before (!) signing the contract becomes the property of the company once I sign the contract, only excluding the IP listed explicitly. Is this a normal practice in some places, or it's something unusual?

I've also never heard of such clause before... and even if I did, it sounds like something I wouldn't sign without consulting my lawyer first.

Usually it's more common to see that you waive the IP on what you create after signing the contract or with their resources... but things you created before that... strange... what about things you made with former companies?...

It's better to consult and get legal counseling than whatever we may say here... but yes definitely something what would trigger my alerts. Do consult a lawyer about your contract.

Edit: I see you tagged this with Mexico. Given this then I can say with more certainty that this is not usual around here. Nor in other Mesoamerican Countries... Never heard of a thing like that here in Guatemala, nor from any Mexican contacts I know...

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    I've seen this before in a contract, and I've previously written about it here (Workplace) before too. Short version: they got it the wrong way round, assigning their IP to me. Man, that was funny A.F. when the slimebag CTO realised it. But yeah; don't sign before taking advice.
    – Justin
    Sep 3 '21 at 20:26
  • @Justin so it was a mistake. No wonder, as it's something that doesn't make sense...
    – DarkCygnus
    Sep 3 '21 at 21:15
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    Voted up as consulting a lawyer is absolutely essential when you get contract problems. If this was a deliberate act (not a mistake) then the contract could be hiding all sort of nasty surprises. People make the mistake (and it always is) of not consulting lawyers and this is a surefire route to problems down the road. And IANAL and detest the profession but if it's a case of don't bring a knife to a gun fight.
    – StephenG
    Sep 5 '21 at 11:09
  • @StephenG yup. Although I agree with the top voted answer, just ammending it and sending it bac leaves it open for other "nasty things" to come out as you say... if things are starting like this, and the very first contract is quite odd, then Consultin a lawyer is a mist... yes, they cost money (as everything in life), but it's money well spend and it it means saving your back and avoiding problems in the future I think it's worth it
    – DarkCygnus
    Sep 6 '21 at 17:52
  • How could that be normal? Sep 7 '21 at 4:21
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I do not know about Mexico, but in France the contract could say that you are expected to fly bare-handed to the Moon and you can still sign it.

This clause, not being backed by Labour Law, simply does not exist. In itself, it does not automatically invalidate the contract, but you can use it as a reason for invalidating it if you initiate the request.

The important part here is that there is not much of a discussion if the requirement makes sense or not - if it is not part of Labour Law, it is invalid. This includes things that would be valid in other places in the world.

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  • Will, in Europe you can’t write off your IP rights anyway. But still I would not sign Such a blanket statement
    – eckes
    Sep 6 '21 at 16:38
  • Do you have any sources for that? Sure, such a clause would be deemed abusive and would probably be invalidated, but a) it would probably not invalidate the rest of the contract automatically and b) it's probably not because it's not part of the Code du travail.
    – jcaron
    Sep 6 '21 at 22:43
  • @jcaron: I checked with an expert, and this was explicitly changed (the clause is not valid, but the contract still is). It used to be that you could invalidate the contract (this was what I remembered, similar to the law related to renting) but now you can challenge the point (or simply ignore it) but not use it as a reason to break the whole contract. Thanks for pointing thou out (I crossed the relevant part in my answer)
    – WoJ
    Sep 7 '21 at 9:23
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It's not only "not normal", where I leave it would certianly be illegal.

Work contracts are quite standardized and they can't require you to sell the employer your kidney or first-born child for example. Or everything you've done so far.

I would check if it's legal in Mexico. If it's not, you have one more reason to deny signing.

But the fact they gave you this contract is a huge red flat in itself and you should consider if the employer is not a scamer.

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I think they're worried that you might work on projects of your own after you started with them, and have a credible argument that you did the work beforehand. You could tell them that, as they know, your entire working life has been creating intellectual property, but none of it is your own: it belongs to your previous employers. In fact, most employment contracts in the US say all the IP you create while employed, on and off the job, is theirs.

Even so, you should just sign. Whoever you'll be working for in the new company probably gritted his teeth and signed himself. Be cooperative. The clause was written by someone without a clue. It will never come up again.

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    Or, more likely, they didn't pay any attention to what's written in there.
    – user_ok
    Sep 7 '21 at 2:03

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