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How concerned should I be about IP agreement with a large company?

Over the past six months I've been developing a web app that I'm planning on beta testing very soon, and launching soon after. At the same time, as a means to make a living I've accepted a position with one of the big four consulting firms and am currently going through the on boarding process. The company is aware of the startup as it was something that was a part of my resume and also discussed during the interview process. While signing various documents and agreements as part of the on boarding process, I came across the following clause in the confidentiality agreement, which I have not yet signed, which is concerning to me.

" Iagree to disclose and assign promptly, completely and in writing to the Firm any inventions, whether or not patentable, and including but not limited to, any innovations on processes, methodologies, software applications or products which I discover, conceive and/or develop, either individually or jointly with others, during the term of my employment with the Firm ("Inventions"). I understand that all inventions which I do hereby assign are and shall become the exclusive property of the Firm, whether or not patent applications are filed thereon, and I agree to treat such inventions as Firm proprietary and confidential information and to use such solely for the benefit of the Firm."

I understand that this is a standard agreement, but I certainlydon't want to lose ownership of my work because I have to take a job to support myself. I understand that inCalifornia, this isn't technicallyenforceable, but this agreement adheres to New York State law, and Ihaven't been able to find anythingdiscussing it. Has anyone dealt with a similar issue? What have you done to resolve this? Alternatively are there any technicalities that I fall back on should I find myself in a situation at some point where the company is claiming legal ownership of the web app?

12 Replies

Nick Gray
4
0
Nick Gray Entrepreneur
Co-Founder / Sales / Data Architecture
I'd ask your prospective new employer to just include the specific fact that your web app. is excluded from that clause of the agreement or even better, anything you have been demonstrably working on prior to accepting their offer of employment.
I can't see them moaning about it if they are, as you say, already aware.
Sikender Singh
0
0
Sikender Singh Entrepreneur
Founder & CEO at Catalyst, Senior Consultant at EY
Thanks Nick
Clynton Caines
0
0
Clynton Caines Entrepreneur
SharePoint Developer at Discover Technologies
"during the term of my employment" - This already addresses your immediate concern, but you could also get them to clarify in writing (email or document amendment/addendum/edit/etc) that the statement relates to their content space only.

Also consider that even if you create something in direct competition and they come after you once you've left and become successful, you can consider the resulting legal/licensing fees to be a cost of doing business as you continue forward. In either case, it helps your case to develop on your own time and your own resources.

Good luck
Jason Oliver
1
0
Jason Oliver Entrepreneur • Advisor
Founder and Technology & Product Executive
It is quite standard to have a "carve out" - that explicitly excludes certain IP/inventions - such as that of your startup idea.

Usually its an exhibit outlining the IP - be very broad - it works in your favor.

good luck
Brian Gannon
0
0
Brian Gannon Entrepreneur • Advisor
Owner at Gannon Law, LLC
You should definitely disclose your prior inventions to your employer and have them expressly excluded, in writing, from any invention assignment requirements in your employment arrangement documents. You should also consider the impact of such provisions on inventions made by you going forward, including any improvements made to your App. If you plan to make any new inventions during the term of your employment, outside of the scope of your employment, you should take steps to make sure that you will own such new inventions and not be required to assign them to your employer. You should consult an attorney regarding these issues.
Sikender Singh
0
0
Sikender Singh Entrepreneur
Founder & CEO at Catalyst, Senior Consultant at EY
Jason,

That makes a lot of sense, can you elaborate on what you mean when you refer to an "exhibit". By being broad, I imagine that this will give me latitude for any future ideas that I may start while employed by the company.
Sridhar Yerramreddy
0
0
Sridhar Yerramreddy Entrepreneur • Advisor
Founder & CEO at Oculus Health
I would suggest to consult a lawyer. Legal counsel will be able to search your documents for seemingly innocuous legal terms which could impact your current state and how it impacts with your employment contract.

Depending on how much value you will create with your startup, I don't believe any employer would give up their own interest to protect you. So, please connect all the dots and protect yourself.
Jason Oliver
1
0
Jason Oliver Entrepreneur • Advisor
Founder and Technology & Product Executive
Sikender,

Just that they generally have language in the body that will point to an exhibit to the agreement (attached at the end and enumerated - ie. Exhibit A, etc) that outlines your IP. This way the main agreement sticks with the legal language and the Exhibit deals with the details.

By broad, I am speaking to the description of your idea - don't be too specific as that can be limiting, as you will most likely expand the scope of your idea. If you have other startup ideas, feel free to list them even if you haven't done anything about it yet.
Sikender Singh
0
0
Sikender Singh Entrepreneur
Founder & CEO at Catalyst, Senior Consultant at EY
Thanks Jason!
Marc Stevens
1
0
Marc Stevens Entrepreneur
Senior Associate at Austin Technology Incubator
It is also extremely important to completely segregate all future work on your app from any new work activity or resource. This means, you shouldn't answer app-related emails or do app-related research on your work computer, office phone, or company-provided mobile. And, you shouldn't use company research material or resources to assist in the future development of your app.
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