Legal, Tax, & Accounting May 19, 2020

Employer claiming my on and off hours' IP


Hi guys,

I'm currently in my first year of a CS course and I've heard that most developer employment contracts include a clause that says that the employer owns any IP you create during your employment, on and off hours.

As I would probably enjoy building things to monetise while working for someone else, do you think it'd be realistic to assume I can ask employers to change the contract so it doesn't include off hours' IP created.

Have any of you not been able to change this clause in your contract? And if so, did you still moonlight?

If I assume worse case, it feels like I have a countdown on the freedom of creating new IP - that ends when I 'need' a developer job to earn money. I'm even considering working in another kind of role once I graduate that doesn't feature this kind of clause in their employment contracts.

  1. 2

    This is fairly common but there’s a subtle context I believe you’re missing. The clause usually only applies to ip that exists in a competing space with your employer.

    If the contract actually states All ip then you should probably avoid that employer or get it changed.

  2. 1

    thank you for all of your guys' advice - it's put my concerns to rest

  3. 1

    As others have said, it's fairly common. I think it's a pretty reasonable clause for employers to have in your contact. I believe it's mostly to cover their ass if you start moonlighting with a non-competing business and it starts effecting your work. I've seen people do this before, but I've never seen a company actually use that clause.

    Most companies don't care about your side projects, so long as it's non-competing and it's not negatively effecting your work. At my current company (a FAANG company), there is even a formal approval process for side projects so that you can retain ownership and they can stay protected. Open source projects, I think, are automatically approved in my contact. Even if a company doesn't have such a process, it should be fine so long as you get written approval (where they sign off property rights.)

    Definitely don't take a non-programming role for fear of this. You can easily just get a job at a company that has a more lax policy.

  4. 1

    If by 'off hours' you mean hours after work when you do not work on your employer's projects, it is very unreasonable for the employer to claim IP on that work of yours.
    The employer has IP over the work you do for their projects, no matter what time of the day you do it. They cannot claim IP over your personal side projects you create in off hours unless you agree to that in the contract. Make sure you read the contract and, if there is such a clause, ask them to remove it. It is unreasonable and unfair.

  5. 1

    It does depend on your employer. Some employers will reach as far as they can and others will be more reasonable. I'd suggest reading your employment contract (most people don't). If it includes such clause try and get an amendment that says anything outside of your employment that doesn't compete is exempt. Any good employer would be ok with that.

    As someone with little experience, you probably won't be in a great negotiating position, unfortunately. Do your best and know that currently, software engineers have a lot of opportunities (even in the current climate). If you can't get a favorable contract, know that you will have more opportunities.

  6. 1

    It's common practice unfortunately. If you have a specific project that you are working on, you can exclude that project specifically from that contract as well. When in doubt, ask an attorney. These things dramatically vary by legal jurisdiction.