You got a job, now what?

Even with last week's job report steady employment is still difficult to find for a lot of people. One of the demographics having a slightly easier time achieving the employment dream are those young people with hard science and engineering degrees. regardless of if you are going to work for Microsoft or some garage stat-up, you should keep in mind what is being slipped into your employment contract.

A good illustration of the pitfalls of not properly reading your employment contract can be found in Picture Patents, LLC v. Aeropostale, Inc.  (Google Scholar is a god send for cheap Attorneys who hate to use the Westlaw accounts).  While this case is not new (April 2011) it does provide 2 key point I want to make about employment contracts and keeping your rights.  


A bit of back story. Ms. Baker, a student at Columbia, got an job working for IBM. Excellent right! Well, IBM being a huge, 100-year old multinational corporation who builds Jeopardy winning supercomputers in its spare time, is not an entity to let something like an employment contract be a Staples brand boiler plate. The employment contract has all the obvious provisions about not showing up drunk and sexually-embarrassing your co-workers in the breakroom.  In addition it has this doozy of a IP assignment section. The relevant part states: 

4. I hereby assign (emphasis mine) to IBM my entire right, title and interest in any idea, invention, design of a useful article (whether the design is ornamental or otherwise), computer program and related documentation, and other work of authorship (all hereinafter called "Developments"), hereafter made or conceived solely or jointly by me, or created wholly or in part by me, whether or not such Developments are patentable, copyrightable or susceptible to other forms of protection, and [sic] the Developments: (a) relate to the actual or anticipated business or research or development of IBM or its subsidiaries, or (b) are suggested by or result from any task assigned to me or work performed by me for or on behalf of IBM or its subsidiaries....

The above provisions concerning assignment of Developments apply only while I am employed by IBM in an executive, managerial, product or technical planning, technical, research, programming or engineering capacity....

Humm... restrictive. You invent a newer, better algorithm. It belongs to IBM.  You invent a better toaster, IBM is making your toast. You invent a slightly tastier pancake (impossible you say!, pancakes are already at maximum tastiness! Bah!), IBM is slathering Aunt Jemima all over it. An important note here is "hereby assign" this means today, not some point in the future. So when you develop something in the future, it is already assigned (in a temporal paradox no doubt) to IBM.  You are binding future you to assign things, i.e. you don't get to renege later.

I am pretty sure you know what happens next. Ms. Baker comes up with an idea (not important what) that she developed with the resources of IBM, while at IBM. IBM declined to advance the project further. Ms. Baker decided to take the technology on the road, do some more developing and file some patents.  Later, she decides that a whole bunch of people are infringing said patents, and brings suit....and looses.  Why?

Cause those patents belong to IBM.  Yea, she paid all the maintenance fees, all the filing fees and all the attorney time, but BIG BLUE takes the prize. Ms. Baker failed (or Ms. Baker's attorney failed) on two accounts. One, when the IBM's employment agreement asked her to list all currently developed(ing) projects that were outside the scope of the the IP agreement she wrote "None".  While it was possible that at the time of her signing, she had zero conception of the project, it is not likely. More likely, she didn't think the idea was worth putting down on paper at the time.

What's the lesson?  Always divulge (in confidence, so as not to be considered a disclosure under sec 102 et seq. ) all of you concepts. Sure some of them might sound stupid, or half baked, but you never know when you will develop them into the next killer app, only to have Megacorp take all the cash.  This is easily done with something like a spread sheet that gives a basic description that lists the things you are working on and thinking about. The downside to this is that if you are too descriptive, you run the risk of narrowing your room to claim broader inventions.

Two, do not use your corporate resources to pursue personal inventions or discoveries. They hate that. More importantly, using their equipment lends credence to the fact that you were doing it for them, and it belongs to them (while else would a company let you do stuff, if not for their benefit).

The back-up lesson you kids who skipped to the end is to make sure you read your employment contract thoroughly. If you don't understand something, ask a lawyer. If you are working for a place that has this kind of contact, and you develop something on your off time, as your lawyer how to make sure it does not instantly get grabbed by the boss.