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I am a Computer Science student and I applied to multiple companies for a job. One had offered me a contract which has some clauses that seem a bit harsh (I have rejected that offer for other reasons, but I am still interested in what implications such clauses might have). The company is in UK, if that is relevant.

1, They specified in the contract that if I create any design or invention that can be patented, I must not apply for a patent without the company's consent.

  1. Also, "all works which you create during the course of employment in which copyright or design right can subsist shall belong to the Company".

  2. "You must not involve yourself in any activities or employment outside the normal duties under your contract which might conflict or overlap with any of the activities undertaken by the Company or which might detract from proper performance of your duties, unless you have express written permission."

It seems I cannot work on things like open source projects in my leisure time and if I work on a personal project, the copyright belongs to the company to which I am employed (also, personal projects might also conflict with clause 3 above).

This seems a bit far fetched to me. To what extent these rules are applied/enforced and how common are they in employment contracts?

closed as off-topic by Lilienthal, Chris E, Jim G., gnat, scaaahu Jul 23 '16 at 3:10

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  • "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – Lilienthal, Chris E, Jim G., gnat, scaaahu
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  • "it seems I cannot work on things like open source projects in my leisure time" - why? Does working on such a project conflict with your duties? If not, I don't see the problem. – Brandin Jul 19 '16 at 22:16
  • First step is to ask manglement. There may be specific exceptions for noncommercial efforts which are not in competition with your employer, though they may ask you to read and sign a few more documents to certify that you understand the boundaries and that if in doubt you should ask again. That's certainly how my employer has handled it for the past three decades. – keshlam Jul 19 '16 at 22:33
  • @keshlam - It is quite advantageous to the company. Doing a bit of programming in a different field can lead to cross fertilization. Pick up one technology at home and use in the work setting. – Ed Heal Jul 19 '16 at 22:35
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    It can be quite advantageous to the company. Not every company sees it that way, and some have specific restrictions involving things like which license the code is offered under. Don't assert, don't guess, ask. – keshlam Jul 19 '16 at 22:37
  • Note that copyright is not at odds with Open Source. Plenty of engineers even work in company time on Linux and other Open Source projects, and therefore definitely have the copyrights assigned to their employer. IIRC, the GPL even has suggested wording how an employer can permit employee contributions. – MSalters Jul 20 '16 at 8:28
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Unfortunately, this is getting to be more and more common.

I have always asked for an exclusion agreement (signed by someone with the authority to do so, of course) when I've been presented with this. Only one company ever refused to do so, and I stopped working with them (contract) as a result.

You may have difficulty getting this being a brand-new graduate, but it's worth asking for. If you able to at all, get some legal advice on such an agreement. It cost me about $600 to get one drawn up, but that was several years ago. I keep re-using it.

If your university has a law college, you may swing by there and ask one of the professors. Sometimes you'll find someone with a bar card and a heart. It is statistically possible.

  • Thank you for your advice. Can you please give more details on what is an exclusion agreement and how it is used? – Paul92 Jul 19 '16 at 22:15
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    This is walking right up to the line on offering legal advice, so understand I am not a lawyer, and advise you to confer with one. Essentially it is an addendum to your employment agreement that you are allowed to continue working in non-competitive areas and retain your intellectual property rights. Again - you REALLY need professional legal advice. There's enough here that a competent attorney will know exactly what you're after. – Wesley Long Jul 19 '16 at 22:17
  • @WesleyLong - You really should bear in mind the person is in the UK. Not everybody in the world gets legal advice at the drop of a hat. – Ed Heal Jul 19 '16 at 22:23
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    @EdHeal - Perhaps, but if you're signing a contract that pledges your intellectual property even for work you're not paid to do, you'd better fully understand what it is you're getting into. If the company weren't prepared to take it to court, they wouldn't have drafted a contract. You can certainly just acquiesce, but you don't sign and then break the terms and expect no repercussions. THAT would be foolish. – Wesley Long Jul 19 '16 at 22:25
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    I don't understand why you would be so averse to just addressing the issue up front and being done with it. The fact this clause is in the contract means the U.K. is not somehow "magically immune" from this. Just adjust the contract to what you can both live with, and honor it. Don't lie about it just because you think your culture will let you "get away with it." – Wesley Long Jul 19 '16 at 22:39
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There are two levels to be aware of here, the technical and the practical.

Technically, yes, the company would like to be able to claim ownership of anything you write while you're employed there. One of the problems with employing people like developers is that a lot of what you're paying for are ideas and ideas don't reliably show up just during business hours while the employee is sitting in the office. If you're employed by, say, a hardware vendor writing code to manage a SAN and you happen to have a brilliant idea at 2am on a Saturday morning for a better way to deal with compression in the SAN, the company doesn't want to go off on your own to patent/ implement it and then sell the idea back to the company. Trying to come up with workable definitions of what ideas might compete with the company you're working for and what ideas you're free to develop on your own-- particularly where that company is very large with lots of groups doing lots of different things-- is pretty challenging. So it's not uncommon that the employer wants the ability to claim very broad ownership. Similarly, the company generally wants the very broad ability to determine what might detract from or overlap with your duties because those things are generally hard to define in advance.

But that's where the practical side comes in. Sure, the company might technically be able to make broad claims. But practically, they generally have no interest in ticking off a productive employee over something that obviously does not compete with the company. If you're contributing to an open source role-playing game while employed at the hardware vendor, it is exceptionally unlikely that anyone would bat an eye unless you started coming in late because you're spending all your time working on the game. If at some point your company decided that a particular extracurricular activity was getting too close to your actual duties, they would realistically tell you that they'd like you to stop contributing to that particular project. For most people, that would be a disappointing conversation but it would be an easy decision to abandon the open source project in favor of your regular day job.

You have to figure out how comfortable you are with the ambiguity between the practical and the technical. If you want to start your own company that might tangentially compete with your current employer, for example, it's almost certainly worthwhile to talk with a lawyer to draft an amendment to the contract that gives you the rights to certain ideas that you might have during your employment. If your day job is just to pay the bills but your real passion is a particular open source project that you care about, it makes sense to amend the contract to specifically exclude that project. If you just want the option to occasionally contribute code to projects you find interesting or to be able to publish personal projects from time to time, it may be perfectly reasonable to accept that your employer might have the ability to claim ownership of some of that code but it would never be worthwhile for them to do so.

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To what extent these rules are applied/enforced and how common are they in employment contracts?

Well done for reading the contract.

Such rules are very common (in my experience in Canada at least).

Before signing one I've (successfully) asked for a specific exclusion:

I want to work on such-and-such software which does so-and-so. For this-reason and for that-reason, (your company wouldn't be interested in this software and) this isn't a conflict of interest. Please therefore give me permission to develop this software in my spare/personal time, and exclude it from the Intellectual Property Assignment (Work for Hire) specified in my employment contract and renounce your interest in it.

Ideally you might get a letter back (from someone who's senior enough to "bind the company") saying,

The software you describe, developed in your own time and without using our equipment, is not a conflict of interest etc.

See the bit at the end of your contract which you quoted in the OP, which says,

... unless you have express written permission

  • Anyone senior enough to sign the employment contract (which includes default IP terms) should be senior enough to sign the specific IP addendum. And given how common this particular type of exception is, you can conditionally accept such an employment offer contingent on their permission. – MSalters Jul 20 '16 at 8:34
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The UK bit is relevant. The Americans love paying lawyers. Must be some sort of perversion.

Basically the contract means that:

  • Do not do stuff that may be in competition with the company (i.e do not bite the hand that feeds you)
  • Stuff you do at work belongs to the company - does not belong to you - this includes patents
  • If you are doing stuff outside work that may lead to a patent - best ask them first
  • Do not come to work unable to do your job.

All the companies in my experience will be happy for you to participate in your own projects including open source (as long as this does not conflict). Some companies even encourage it.

In my experience working for UK companies if in doubt have a chat. Lawyers should be the last resort

  • Projects which you perform on your spare time that does not utilize company resources: computers, raw material, etc. and is not in direct competition with the company's core business cannot be regulated that hard in Scandinavia. I have a hard time seeing that a company producing medical software e.g. would claim copyright or patent if you developed an android game in your spare time? That said however, I have been wrong before and contractual law is finicky. – Charles Borg Jul 20 '16 at 5:57
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    -1 You cannot say what the contract means without the full contract in front of you – James Fenwick Jul 20 '16 at 7:46

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