How to approach startup re: IP assignment agreements?

June 10, 2018 5:24 AM

I'm being recruited for a software-focused role at an early-stage hardware startup. I would like to take the gig, but I have an IP-related concern: Outside of my day job, I have a hobby building entirely unrelated things that includes an open-source software/hardware component. I would like to maximize my chances of being allowed to continue doing what I do for fun, insofar as it is orthogonal to what I would be doing for work.

I have not yet been told whether or not there is an "everything you do, even off-hours, belongs to us" IP assignment agreement, but I suspect it could be coming, given the type of work. How can I approach this to optimize my chances of being able to eke out an exemption for non-work-related IP?

Let's say that Potential New Employer makes high-end audio hardware, and my hobby is writing generative algorithms to design furniture that can be CNCed. These are not really the verticals, but, about as closely related -- they both involve hardware/software cleverness, but to very different ends. I think they would be within their rights to say "we are paying you to design cool amplifiers, don't tell people about your amplifier building tricks because that might diminish our competitive advantage" but hopefully "I want to modify my CNC router to be better, and talk about it with friends online/share code/share designs" is fair. Sure, someone could use a better CNC to build better amp enclosures, but that's pretty distantly related.

I have been very open with people from the company about "Oh yeah, this other thing I do is [x], and it makes me better at [skills you will benefit from] because [reasons], on top of [reasons related to formal training and prior employment]," so it wouldn't be coming out of the blue.

posted by anonymous to Work & Money (9 answers total)

Can't talk to contractual employment contracts but get it in writing. Then in your hobby keep page numbered and dated paper journal notes. That's what counts in patent issues and would help to resolve any issue later should there be conflict.
posted by sammyo at 6:10 AM on June 10, 2018 [1 favorite]

This varies by jurisdiction, so be sure any advice you get applies to your country/oblast/province/state. This thread lists this range:

The boilerplate IP contracts provided by most law firms usually claims one of:
* All software development work you ever do while employed by the company.
* All software development work you do using in any way any resource of the company, from computer to network connection.
* All software development work you do related to the business of the company that employs you.
* All software development work you do that isn't explicitly listed in an exhibit of exceptions you, the employee, fill out.

To this I'd want to add (but I know I'm dreaming):
* All software development work you do that is explicitly listed in an exhibit of areas the employer fills out.

Anyway, the short, expensive answer is: consult ap IP lawyer. The practical answer is: read the contract they offer, see what they propose, and if it's not to your liking, make a counterproposal.

The thread I linked to above talks about not being shy about saying you can't sign the contract as is, but could sign it if this certain clause in the contract were replaced by this clause I'm giving you. It talks about being looked at funny by the HR rep, who's offered this contract to hundreds of people and none have ever pushed back, but someone a couple of levels up will have seen this and won't blink twice to approve it.
posted by at at 6:23 AM on June 10, 2018

I read "early-stage hardware startup" and I think < 20 employees and (because hardware) not generating revenue yet. My guess is that the IP agreement is going to be pretty boilerplate, as I wouldn't expect them to have full time legal counsel. If it came through some of the VCs funding the startup (again, because hardware, I'm assuming VC money), it will also likely be very one sided in favor of the company, as at points out just above. The good news here is that no one in a start up has time to negotiate a nuanced agreement, and your prospective employer has a lot of better things to spend money on than the hourly rate for their contract legal counsel. I like your chances to get a clause added or a side letter or something to cover your hobby, especially if you have a narrow/specific carve out. I would start by just asking or relaying request to whomever in the company owns the engineering function (e.g. CTO, VP of Engineering, something like that). Again, because this is a startup, I'm assuming you are already directly in contact with them or someone reporting to them.
posted by kovacs at 6:39 AM on June 10, 2018

It's perfectly reasonable for you to ask for a specific written exclusion acknowledging you do this side project and it belongs to you. One thing you can do to help that process along is document what you've done so far.
posted by Nelson at 7:26 AM on June 10, 2018 [3 favorites]

Lots of good advice above. To reiterate:

Read the employment agreement. Understand the IP clause. Don't let your eyes glaze over. There is an obvious difference between "we own all your waking thoughts + your dreams" and "we own anything you do on company time with company equipment that is related to the company business".

Get advice/assistant from an employment lawyer who understands the tech field. If you don't know one, find one by asking friends or asking here.

Don't be shy about asking your new employer for a carve-out. In my experience most hiring managers understand that they don't need to own all your waking thoughts, even if their VC's lawyer put that in the company's standard hiring contract.

Be aware of the fact that laws vary from state-to-state in the US, so that needs to be taken into account. Some states don't allow companies to own your dreams. Your attorney should know all these rules.

posted by Winnie the Proust at 7:34 AM on June 10, 2018 [1 favorite]

Since this is all hypothetical, my recommendation is to refuse to sign it, because everything they have to protect is already protected in other ways (trade secrets and copyright). IP Assignment agreements are only used to go after your stuff, and why would you steal from your employer? They'll say it's boilerplate and "everybody signs it."

In short, talk to a lawyer but not before you have something in hand.
posted by rhizome at 10:54 AM on June 10, 2018

I've always been able to get some kind of exception, so definitely ask. In my experience people include those clauses as CYA rather than because they want to, and they're generally on your side about it. Sometimes I was asked to write up a list of specific projects I was working on that I wanted to be exempt, in which case I would use sufficiently skimpy and broad descriptions to cover current and potential future projects.

Because it's a startup, if you think the documents haven't even been written yet, that could be an opportunity to let the appropriate person know ahead of time that you'd like the agreement to avoid overbroad encroachment into personal projects. And while it shouldn't come to it in a healthy environment, you also have that point that your value to the company improves if you're not discouraged from developing your skills in your own time.
posted by Cusp at 11:13 AM on June 10, 2018

Get it in writing and be willing to walk if they won't provide it. Maintain strict separation of equipment at home. Don't copy to a flash drive or email anything that could apply to your personal work.

If your project is important to you, also consider how many hours that they're going to be expecting from you. Most of my friends that worked in that phase of startup found that it wasn't really an issue because they had so little free time to work on personal projects.
posted by Candleman at 11:36 AM on June 10, 2018

FWIW in California the law says that everything outside of company time and equipment is automatically yours. The company would have to prove on their own that you infringed in any way.
posted by rhizome at 12:13 PM on June 10, 2018