9 ms·

Ask HN: I've been asked to sign a IP Assignment Deed as an employee

39 points by mordrax 10y ago

So I used to work for a company, being one of two employees that created a piece of software. I was hired as an employee of the company with no share holding, and signed a fairly standard contract where my time and anything I created during the time I was employed belonged to the company. Just recently, the company is selling it's product and the purchasing company has asked that all employees sign a IP Assignment Deed. My understanding is that, since I've already assigned all IP to the company that I worked at, I don't have any legal rights to assign my IP to this new entity... well because, I don't actually own any of it. Is it common for past employees (not shareholders or founders) to have to sign these when products are being purchased? I was made redundant 2 years ago.

deedubaya 10y ago
If you're no longer employeed by the selling company, it would seem that you have nothing to gain by signing.
- mordrax 10y ago
  I guess my angle isn't: What is there to gain for me. Even though I was made redundant, the employer is nice and I'd have no problems signing it. But it's the first time I'm asked to sign one of these things and some of the things I'd be agreeing to doesn't even sound like it's in english. I don't want to inadvertently sign over any side project I was working on in that time or IP for the industry I was working in or even future IP as some of it seems to be worded without time constraints. But take all that with a grain of salt, no legal background. The sale of the business is predicated on all former employees signing the deed.
  - xenadu02 10y ago
    This is all risk for you... why would you take on that risk with no compensation for an employer that fired you?
    - notyourwork 10y ago
      Some times it can behoove one to keep a relationship amicable and not be hostile or hold a grudge.
      - deleted 10y ago
        [deleted]
    - tempestn 10y ago
      There is something between doing it out of the goodness of your heart and milking them for all they're worth though. He could reasonably ask that they pay his legal fees and compensate him for his time dealing with this. (A couple hundred an hour, say, or whatever he feels is reasonable.) Then choose a good IP attorney to look over it. That's based on the fact that he says he's on good terms with the previous employer and would like to help them out.
      - dvfjsdhgfv 10y ago
        This is the most reasonable solution and I hope the OP chooses it.
  - sokoloff 10y ago
    You should feel free to draft alternative language that you are comfortable signing. It's then up to the lawyers and bankers in the deal to figure out if that's good enough for them. What they're trying to guard against is an Oculus Rift type situation. You signing a clear statement of "mordrax has no further interest in any IP that's part of this deal" is probably good enough for them. You don't have to sign exactly what they put in front of you, especially if you can't understand it.
  - bthornbury 10y ago
    Don't feel pressured. Sounds like you're trying to do the right thing and should be worried about signing an agreement you don't understand. If you're worried, get an attorney (who understands software IP) to read it. Get the company to reimburse you for the attorney fee (and maybe your time).
  - ams6110 10y ago
    I would refuse to sign without hiring an attorney to review it. That will cost you something but at least you will know what you are signing.
    - DoofusOfDeath 10y ago
      How about this? Say you're more than happy to consider signing it, but the company will need to reimburse you for reasonable lawyer fees so you can hire a lawyer to review the proposed assignment. IANAL, but I suspect a key detail here is that you are hiring the lawyer, no your former employer, because that's crucial to having the attorney bound to represent your interests. But again, IANAL, so I could be totally wrong.
  - sulam 10y ago
    Typically these are signed upon employment, not after you've left employment. But the reason they are usually signed then is specifically to avoid the situation the seller is now in, so it's reasonable for them to want this. The usual way to deal with side projects is to specifically list the things you own and want to protect that should not be included. This is often a very small set of identifiable things. If you're worried this might be an overly broad set, then you can go the other way and try and list all the work you did while there. They will then need someone to review it to make sure that's everything they need, and then the buyer will need to review it to make sure that's everything they want. If this is an asset transfer, they will also need to make another list which is the things they are specifically not buying. So you make things more complicated doing it that way, but it's certainly your right to do that since they don't have an agreement with you already. Their fault for not giving you something when you started.
  - general_ai 10y ago
    Have your lawyer review it. $200 at most.
  - droithomme 10y ago
    They laid you off. You owe nothing to either party. You should not sign the contract. If you must sign it, you have to have a qualified IP attorney do a contract review. A qualified IP attorney is expensive. A contract review of this nature should cost you a few hundred an hour. It won't be done by your family attorney, and probably not by an attorney in your town unless you live in a major metro area that is an IP hotbed.
  - deleted 10y ago
    [deleted]
  - rhizome 10y ago
    IANAL, but you sound like you're in the catbird seat. They need all formers to sign this, they laid you off, you have side projects and a life, and so why devote a thought to their needs? Charity? Turn it around and tell them your needs: you don't want to lose rights to your own work. Leave at that at first, and see if they come back with anything, such as a list of the specific works they want you to disclaim prior to their acquisition. You get the open end, not them. And charge them for laying you off, I assume you don't have equity that will act as any kind of redemption in the sale.
sokoloff 10y ago
First of all, you don't HAVE to sign anything now. It is very common in due diligence to try to chase down details like this. If you feel like cooperating, but are just uncertain of your standing, you can sign a quitclaim assignment, essentially stating that whatever IP claims that you might have (which might be none), you assign to the new entity. If you don't feel like cooperating, you could ask for compensation now in exchange for signing or just tell them to cram it with walnuts.
gregmac 10y ago
It seems like you have nothing to gain, but potentially something to lose by signing. On the other hand, do you have anything to lose by not signing? IANAL, but from your description it does indeed sound like you have no IP rights to assign. If they really want you to sign anyway, and you are ok with the terms, at least get compensation for it - that at least gives you an upside.
dontJudge 10y ago
They are probably following a process on autopilot. Maybe just being extra safe, covering all their bases. Just ignore it until they offer money for your supposed IP.
salsakran 10y ago
Chances are they messed up the paperwork somehow. Either the agreement you signed wasn't acceptable to the buyers or they just lost them. I would definitely run it by a lawyer before you sign anything. It's unlikely they're being nefarious, but realize that you'd be doing them a favor. It's up to you to decide if that's something you'd want to do.
mongol 10y ago
What is in it for you? I can not see a reason to bother.
mongol 10y ago
What is in it for you? I can not see a reason to bother.
iaw 10y ago
In order for a contract to be considered enforceable both parties must receive consideration[1]. When you worked at the company your consideration was continued employment. Were I in your shoes I'd ask for an amount of consideration with what you believe is commensurate with a "reasonable" value. If this is a small sale, something like $10,000. If it's a large sale, $100-200,000. The point being that if they want you to sign away your ownership rights (real or imagined) they have to give you something in return or it's not a legal contract. Contracts absolutely require that both parties get something of value out of the exchange. [1] http://study.com/academy/lesson/rules-of-consideration-in-contract-law-elements-case-examples.html http://study.com/academy/lesson/rules-of-consideration-in-co...
- vacri 10y ago
  For those not in the know, this is what 'peppercorn' contracts are about, where one side pays $1 (the 'peppercorn', ie: not worth much) in exchange for the other side's stuff. Usually it's done for things that are considered an overall net liability.
  - Terr_ 10y ago
    Amusingly, peppercorns have at some times/places been worth their weight in gold.
    - vacri 10y ago
      heh, I thought you were talking about the contracts (which is also figuratively true) at first, rather than actual peppercorns... :)
- ajdlinux 10y ago
  The words "IP assignment deed" would suggest it's a deed, not a contract, and a deed does not require consideration (though it may include some consideration that allows it to be enforced as a contract if a court finds that the requirements of a deed were not met) (IANAL, I've had to get lawyers to write up IP assignment paperwork before though)
ChuckMcM 10y ago
In general, there probably isn't an issue. However, it is very important that you understand anything you sign. In IP assignments the thing I am most careful about is the indemnification clause or clauses. It is fairly boilerplate to include language that says "you assert that you have the right to sign off this IP, and if someone later challenges that right you will indemnify they buyer against any infringement action brought against them." That is what is think of as an "open ended" indemnification which is to say, you sign this over, then later someone sues them for patent infringement. Even though you had no idea somebody had patented the idea, you might be on the hook to pay the legal costs or licensing fees to make the buyer whole again. So make sure the document doesn't say indemnify anywhere :-) And as others have said consider having a lawyer look at it.
bb88 10y ago
Some people have mentioned that you might want to stay on good terms with the company. The problem is that you're dealing with lawyers, and they want only one thing. They don't really care about you once they have what they want. The other problem for them is that your legal relationship ended when your employment ended. So they don't have any power, other than what you choose to give to them. I'm guessing they lost the original contracts and need the Deed to be on solid legal ground. So I'd make them squirm a bit.
Illniyar 10y ago
They want you to sign something after you left? Don't be a fool, you shouldn't sign anything. Its a hit and miss tactic, some will sign and the lawyers will have a little bit more gurantee, but many won't and it will not hold up the sale.
- mdotk 10y ago
  agreed, why sign anything after you've left. you don't owe them jack
ImTalking 10y ago
Not a chance. The terms of this new deed may be more onerous than the original employment contract, and might land you on trouble if, for example, you did some programming outside of this company while you were employed.
kstrauser 10y ago
Did they voluntarily sign any nice contracts for you when they fired you? Sure, your manager was cool and you liked your coworkers, but the company itself fired you. Call it "laid off", "rightsized", "RIFfed", or whatever you choose, but the end result is the same: you were out on the street. What are they willing to do for you, now that they're asking a favor? I'm not trying to be a hardass, or suggest you try to retire off this one thing. But obviously it's valuable to them or they wouldn't be asking. Why should you - who they fired - do them a large financial favor for nothing?
solidsnack9000 10y ago
> My understanding is that, since I've already assigned all IP to the company that I worked at, I don't have any legal rights to assign my IP to this new entity... This seems basically right. I would ask them, was something wrong or incomplete about the previous agreement?
amorphid 10y ago
If you don't own any of it, at least in your mind, it's interesting that someone is selling the software that you don't own, and asking you to confirm that. If it wouldn't cost you anything you care about, consider countering with "to save time, make me your best offer." See what they do!
sauronlord 10y ago
This sounds like work to me. Best to provide an estimate and send them an invoice for this project. 200/hr with minimum billing increment of 2 hours PLUS legal expenses to even understand what the heck it is they want you to sign. Easily a 4-8 hour gig. $800-1500 is a reasonable price to be paid for such a job.
raleighm 10y ago
(Not legal advice.) M&A practitioners aren't paragons of virtue but still it'd usually be considered uncool to go to a former employee years after the fact, ask them to sign a doc to facilitate a deal he'd get no upside from, and not offer to pay his legal fees - especially if he's someone the company let go. It's possible this is just a junior associate at the purchaser's law firm insisting on something technically correct but practically low-risk, getting poor supervision, and your former company not shielding you as they should. It's also possible that if the company tells the purchaser you don't want to sign it, the purchaser just says "ok was worth a shot" and that's it. If the purchaser truly does care, it's the company's problem not yours that the documents you signed years ago weren't different. Not something you should incur time, expenses or risk now to fix for them. An example of risk is the scope of the deed being too broad and covering other projects of yours that should be out of scope. You can say no with a clear conscience. If you feel bad about it, something like the following is a totally fair response: "Sorry I can't be more helpful, but I take legal documents seriously and don't review/sign anything unless it's necessary for something I'm currently working on. It's just a personal policy of mine."
colin1006 10y ago
If I were in your situation (where I liked the company, and had decided that I didn't want to try to ask for a portion), say that you're not going to sign anything without having a lawyer look over it with you, and ask them to reimburse you for your lawyer. That way if they need you to sign it, then they can pay for your trouble, and you can find out if there's anything important and get all of your legal questions answered (including finding out if you have any bargaining power). If they don't need you to sign it, then they won't pay for your lawyer, and you can go on without signing something you don't understand.
jason_slack 10y ago
You were made "redundant" 2 years ago. You don't owe your past employer anything and you sure as hell don't owe anything to a company trying to minimize their headache in the future if something with their deal with your past employer has a hole in it. I'd just wash your hands of the whole thing and ignore it. If they come back with some $$ then perhaps revisit. Life is to short to be wasted being a 3rd wheel.
mordrax 10y ago
Thank you all for the wide range of thoughtful responses. I don't want to leave the impression that this company with a private owner is a bad company. The employer did look out for me when I had difficult family issues and at one point, being way over-burdened with the workload, I told him to either fire me and get a support person at half my salary or give me more resources. Being laid off there was quite good for me. I felt indebted to keep the product afloat but it was burning me out constantly so after I left, I got a higher paid, much more reasonable hours job with peers that also have passion for coding. But I still remembered him looking out for me so I want to do the right thing and help him get some closure on this business. To that end, I think getting a IP lawyer to put any of my worries to rest at a small expense to him or the purchasing company is the most reasonable option as someone else had said below.

39 points by mordrax 10y ago

deedubaya 10y ago

If you're no longer employeed by the selling company, it would seem that you have nothing to gain by signing.

mordrax 10y ago
I guess my angle isn't: What is there to gain for me. Even though I was made redundant, the employer is nice and I'd have no problems signing it. But it's the first time I'm asked to sign one of these things and some of the things I'd be agreeing to doesn't even sound like it's in english. I don't want to inadvertently sign over any side project I was working on in that time or IP for the industry I was working in or even future IP as some of it seems to be worded without time constraints. But take all that with a grain of salt, no legal background. The sale of the business is predicated on all former employees signing the deed.
- xenadu02 10y ago
  This is all risk for you... why would you take on that risk with no compensation for an employer that fired you?
  - notyourwork 10y ago
    Some times it can behoove one to keep a relationship amicable and not be hostile or hold a grudge.
    - deleted 10y ago
      [deleted]
  - tempestn 10y ago
    There is something between doing it out of the goodness of your heart and milking them for all they're worth though. He could reasonably ask that they pay his legal fees and compensate him for his time dealing with this. (A couple hundred an hour, say, or whatever he feels is reasonable.) Then choose a good IP attorney to look over it. That's based on the fact that he says he's on good terms with the previous employer and would like to help them out.
    - dvfjsdhgfv 10y ago
      This is the most reasonable solution and I hope the OP chooses it.
- sokoloff 10y ago
  You should feel free to draft alternative language that you are comfortable signing. It's then up to the lawyers and bankers in the deal to figure out if that's good enough for them. What they're trying to guard against is an Oculus Rift type situation. You signing a clear statement of "mordrax has no further interest in any IP that's part of this deal" is probably good enough for them. You don't have to sign exactly what they put in front of you, especially if you can't understand it.
- bthornbury 10y ago
  Don't feel pressured. Sounds like you're trying to do the right thing and should be worried about signing an agreement you don't understand. If you're worried, get an attorney (who understands software IP) to read it. Get the company to reimburse you for the attorney fee (and maybe your time).
- ams6110 10y ago
  I would refuse to sign without hiring an attorney to review it. That will cost you something but at least you will know what you are signing.
  - DoofusOfDeath 10y ago
    How about this? Say you're more than happy to consider signing it, but the company will need to reimburse you for reasonable lawyer fees so you can hire a lawyer to review the proposed assignment. IANAL, but I suspect a key detail here is that you are hiring the lawyer, no your former employer, because that's crucial to having the attorney bound to represent your interests. But again, IANAL, so I could be totally wrong.
- sulam 10y ago
  Typically these are signed upon employment, not after you've left employment. But the reason they are usually signed then is specifically to avoid the situation the seller is now in, so it's reasonable for them to want this. The usual way to deal with side projects is to specifically list the things you own and want to protect that should not be included. This is often a very small set of identifiable things. If you're worried this might be an overly broad set, then you can go the other way and try and list all the work you did while there. They will then need someone to review it to make sure that's everything they need, and then the buyer will need to review it to make sure that's everything they want. If this is an asset transfer, they will also need to make another list which is the things they are specifically not buying. So you make things more complicated doing it that way, but it's certainly your right to do that since they don't have an agreement with you already. Their fault for not giving you something when you started.
- general_ai 10y ago
  Have your lawyer review it. $200 at most.
- droithomme 10y ago
  They laid you off. You owe nothing to either party. You should not sign the contract. If you must sign it, you have to have a qualified IP attorney do a contract review. A qualified IP attorney is expensive. A contract review of this nature should cost you a few hundred an hour. It won't be done by your family attorney, and probably not by an attorney in your town unless you live in a major metro area that is an IP hotbed.
- deleted 10y ago
  [deleted]
- rhizome 10y ago
  IANAL, but you sound like you're in the catbird seat. They need all formers to sign this, they laid you off, you have side projects and a life, and so why devote a thought to their needs? Charity? Turn it around and tell them your needs: you don't want to lose rights to your own work. Leave at that at first, and see if they come back with anything, such as a list of the specific works they want you to disclaim prior to their acquisition. You get the open end, not them. And charge them for laying you off, I assume you don't have equity that will act as any kind of redemption in the sale.

sokoloff 10y ago

First of all, you don't HAVE to sign anything now. It is very common in due diligence to try to chase down details like this. If you feel like cooperating, but are just uncertain of your standing, you can sign a quitclaim assignment, essentially stating that whatever IP claims that you might have (which might be none), you assign to the new entity. If you don't feel like cooperating, you could ask for compensation now in exchange for signing or just tell them to cram it with walnuts.

gregmac 10y ago

It seems like you have nothing to gain, but potentially something to lose by signing. On the other hand, do you have anything to lose by not signing? IANAL, but from your description it does indeed sound like you have no IP rights to assign. If they really want you to sign anyway, and you are ok with the terms, at least get compensation for it - that at least gives you an upside.

dontJudge 10y ago

They are probably following a process on autopilot. Maybe just being extra safe, covering all their bases. Just ignore it until they offer money for your supposed IP.

salsakran 10y ago

Chances are they messed up the paperwork somehow. Either the agreement you signed wasn't acceptable to the buyers or they just lost them. I would definitely run it by a lawyer before you sign anything. It's unlikely they're being nefarious, but realize that you'd be doing them a favor. It's up to you to decide if that's something you'd want to do.

mongol 10y ago

What is in it for you? I can not see a reason to bother.

mongol 10y ago

What is in it for you? I can not see a reason to bother.

iaw 10y ago

In order for a contract to be considered enforceable both parties must receive consideration[1]. When you worked at the company your consideration was continued employment. Were I in your shoes I'd ask for an amount of consideration with what you believe is commensurate with a "reasonable" value. If this is a small sale, something like $10,000. If it's a large sale, $100-200,000. The point being that if they want you to sign away your ownership rights (real or imagined) they have to give you something in return or it's not a legal contract. Contracts absolutely require that both parties get something of value out of the exchange. [1] http://study.com/academy/lesson/rules-of-consideration-in-contract-law-elements-case-examples.html http://study.com/academy/lesson/rules-of-consideration-in-co...

vacri 10y ago
For those not in the know, this is what 'peppercorn' contracts are about, where one side pays $1 (the 'peppercorn', ie: not worth much) in exchange for the other side's stuff. Usually it's done for things that are considered an overall net liability.
- Terr_ 10y ago
  Amusingly, peppercorns have at some times/places been worth their weight in gold.
  - vacri 10y ago
    heh, I thought you were talking about the contracts (which is also figuratively true) at first, rather than actual peppercorns... :)
ajdlinux 10y ago
The words "IP assignment deed" would suggest it's a deed, not a contract, and a deed does not require consideration (though it may include some consideration that allows it to be enforced as a contract if a court finds that the requirements of a deed were not met) (IANAL, I've had to get lawyers to write up IP assignment paperwork before though)

ChuckMcM 10y ago

In general, there probably isn't an issue. However, it is very important that you understand anything you sign. In IP assignments the thing I am most careful about is the indemnification clause or clauses. It is fairly boilerplate to include language that says "you assert that you have the right to sign off this IP, and if someone later challenges that right you will indemnify they buyer against any infringement action brought against them." That is what is think of as an "open ended" indemnification which is to say, you sign this over, then later someone sues them for patent infringement. Even though you had no idea somebody had patented the idea, you might be on the hook to pay the legal costs or licensing fees to make the buyer whole again. So make sure the document doesn't say indemnify anywhere :-) And as others have said consider having a lawyer look at it.

bb88 10y ago

Some people have mentioned that you might want to stay on good terms with the company. The problem is that you're dealing with lawyers, and they want only one thing. They don't really care about you once they have what they want. The other problem for them is that your legal relationship ended when your employment ended. So they don't have any power, other than what you choose to give to them. I'm guessing they lost the original contracts and need the Deed to be on solid legal ground. So I'd make them squirm a bit.

Illniyar 10y ago

They want you to sign something after you left? Don't be a fool, you shouldn't sign anything. Its a hit and miss tactic, some will sign and the lawyers will have a little bit more gurantee, but many won't and it will not hold up the sale.

mdotk 10y ago
agreed, why sign anything after you've left. you don't owe them jack

ImTalking 10y ago

Not a chance. The terms of this new deed may be more onerous than the original employment contract, and might land you on trouble if, for example, you did some programming outside of this company while you were employed.

kstrauser 10y ago

Did they voluntarily sign any nice contracts for you when they fired you? Sure, your manager was cool and you liked your coworkers, but the company itself fired you. Call it "laid off", "rightsized", "RIFfed", or whatever you choose, but the end result is the same: you were out on the street. What are they willing to do for you, now that they're asking a favor? I'm not trying to be a hardass, or suggest you try to retire off this one thing. But obviously it's valuable to them or they wouldn't be asking. Why should you - who they fired - do them a large financial favor for nothing?

solidsnack9000 10y ago

> My understanding is that, since I've already assigned all IP to the company that I worked at, I don't have any legal rights to assign my IP to this new entity... This seems basically right. I would ask them, was something wrong or incomplete about the previous agreement?

amorphid 10y ago

If you don't own any of it, at least in your mind, it's interesting that someone is selling the software that you don't own, and asking you to confirm that. If it wouldn't cost you anything you care about, consider countering with "to save time, make me your best offer." See what they do!

sauronlord 10y ago

This sounds like work to me. Best to provide an estimate and send them an invoice for this project. 200/hr with minimum billing increment of 2 hours PLUS legal expenses to even understand what the heck it is they want you to sign. Easily a 4-8 hour gig. $800-1500 is a reasonable price to be paid for such a job.

raleighm 10y ago

(Not legal advice.) M&A practitioners aren't paragons of virtue but still it'd usually be considered uncool to go to a former employee years after the fact, ask them to sign a doc to facilitate a deal he'd get no upside from, and not offer to pay his legal fees - especially if he's someone the company let go. It's possible this is just a junior associate at the purchaser's law firm insisting on something technically correct but practically low-risk, getting poor supervision, and your former company not shielding you as they should. It's also possible that if the company tells the purchaser you don't want to sign it, the purchaser just says "ok was worth a shot" and that's it. If the purchaser truly does care, it's the company's problem not yours that the documents you signed years ago weren't different. Not something you should incur time, expenses or risk now to fix for them. An example of risk is the scope of the deed being too broad and covering other projects of yours that should be out of scope. You can say no with a clear conscience. If you feel bad about it, something like the following is a totally fair response: "Sorry I can't be more helpful, but I take legal documents seriously and don't review/sign anything unless it's necessary for something I'm currently working on. It's just a personal policy of mine."

colin1006 10y ago

If I were in your situation (where I liked the company, and had decided that I didn't want to try to ask for a portion), say that you're not going to sign anything without having a lawyer look over it with you, and ask them to reimburse you for your lawyer. That way if they need you to sign it, then they can pay for your trouble, and you can find out if there's anything important and get all of your legal questions answered (including finding out if you have any bargaining power). If they don't need you to sign it, then they won't pay for your lawyer, and you can go on without signing something you don't understand.

jason_slack 10y ago

You were made "redundant" 2 years ago. You don't owe your past employer anything and you sure as hell don't owe anything to a company trying to minimize their headache in the future if something with their deal with your past employer has a hole in it. I'd just wash your hands of the whole thing and ignore it. If they come back with some $$ then perhaps revisit. Life is to short to be wasted being a 3rd wheel.

mordrax 10y ago

Thank you all for the wide range of thoughtful responses. I don't want to leave the impression that this company with a private owner is a bad company. The employer did look out for me when I had difficult family issues and at one point, being way over-burdened with the workload, I told him to either fire me and get a support person at half my salary or give me more resources. Being laid off there was quite good for me. I felt indebted to keep the product afloat but it was burning me out constantly so after I left, I got a higher paid, much more reasonable hours job with peers that also have passion for coding. But I still remembered him looking out for me so I want to do the right thing and help him get some closure on this business. To that end, I think getting a IP lawyer to put any of my worries to rest at a small expense to him or the purchasing company is the most reasonable option as someone else had said below.