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Naive question by someone who’s never started a business: when bootstrapping companies while keeping your day job, how do you deal with intellectual property cl

by willj 7y ago

Naive question by someone who’s never started a business: when bootstrapping companies while keeping your day job, how do you deal with intellectual property clauses in employment contracts, such that your employer owns the “inventions” you create in your free time, on your own equipment, unrelated to the business area you work in? I know laws vary by state, but I would find it especially disheartening if you spent years of effort and sacrificed your social life only to have your product snatched away from you once it finally became profitable or popular. My non-lawyer reading of the internet’s opinions suggest that you need to discuss it with your company, or possibly edit your employment contract before signing, but the latter seems a bad suggestion if you’re afraid of not getting a job. I’ve also read that these kinds of clauses can even apply several months after you terminate at your day job, which suggests that you can’t even start on the product until months after you’ve left. All of that makes me unlikely to try to build a business in tech, since I would never have the capital to take such a long break away from a company, nor to build a product for a long time before it’s profitable without having a day job to support me.

pid_0 7y ago
>how do you deal with intellectual property clauses in employment contracts, such that your employer owns the “inventions” you create in your free time, on your own equipment, unrelated to the business area you work in? By not signing those things, plain and simple. I have never signed an employment contract and I never will.
- icebraining 7y ago
  Does that mean you never worked for a company (in an IP-related job), or actually managed to find companies who hired you without signing a contract? If the latter, what kind of companies do that?
  - pid_0 7y ago
    I literally have never once signed an employment contract. I only work in devops/cloud/security consulting firms
giarc 7y ago
My employer (not a tech company but a healthcare provider) has a system whereby I submit a Potential Conflict of Interest document. They review and either give me their blessing to continue work (outside work hours obviously) or further review is to be conducted.
par 7y ago
most of the time you just roll the dice. As long as what you're doing is not in the same line of business as your employer, and you part on good terms, most of the time it's fine.
- jacurtis 7y ago
  This is actually a good distinction. If your side project is related to your employer's line of work then it is easy for your employer to argue that they own that creation, even if you used a personal computer and did it at night, etc. So for example if your employer makes inventory management software for coffee shops, and you decide to make an inventory management tool for grocery stores... then your employer will easily own your creation. On the other hand if you work for a search engine platform (ie Google), and you invent an API tool that parses recipes, and you did it all on your personal laptop and personal time, then you should be fine.
roland35 7y ago
Another important thing to keep in mind is to not use company resources in any capacity - your work laptop, work 3d printer, work time. This actually came up in the first season of silicon valley!
henryfjordan 7y ago
Your intuition is correct, you really should try to make sure your employer is aware of your intent to work on your own IP and you have some written document acknowledging that fact. Many companies have a form you fill out on your first day listing such projects. You owe your employer a duty of loyalty and so your projects cannot compete with them, and it helps to have them review the scope of the project and sign off on that fact. If you don't get this agreement from your employer, you might still technically be fine to work on your own business but you risk a court battle about it. > I’ve also read that these kinds of clauses can even apply several months after you terminate at your day job, which suggests that you can’t even start on the product until months after you’ve left. These would be non-compete clauses, illegal in California but legal in many other states. Your employer doesn't own any IP you create once they stop paying you, but if you are bound by a non-compete you'll need to be more careful.
- scaryclam 7y ago
  So much this. Don't rely on just not using company time or resources. Be open and honest. Get it in writing. If they won't give it to you, there's no chance of them being ok with it just because it's not on company time or resources. Know the boundaries before committing. Then you and your employer can keep a trustful and productive relationship while you try things out.
patchworkguilt 7y ago
Agree with what has already been said (dont use company resources like a work laptop, dont work on it during typical work hours, dont build a product that might in any way compete with your employer, etc.) As far as work contract goes, (I am NOT a lawyer, just based on experience), it's worth reading over and seeing what the language is around IP. Most states protect your right to build stuff on your own time (enables innovation, also you aren't the property of your company) making some more draconian contracts unenforceable. But it is always better to be proactive, rather than assuming a court battle will be unlikely because 1) who knows and 2) court is never cheap. If you want to work on something and you are worried about the language in your contract, talk to your employer about the project and getting some form of written exception for it. Side projects generally make for more capable, satisfied employees, so if a company made a massive stink about literally owning anything you make anywhere in your life, I'd be very very wary, as that mindset is a scary sign.
jacurtis 7y ago
Generally, when an employer owns your "inventions", this only applies to "inventions" created while using the employer's resources. Most employement contracts will make it sound like they own every waking thought, but in most cases when this has been taken to court, the precedent has been set, that it really only applies to inventions or ideas that happen in relation to and using employer's resources. So this means that an employer can argue they own software that you build: - On a company-issued computer - Using contacts you garnered through work - On company time (this is complicated for salary employees, but definitely applies to time in the office, or standard business hours when you are expected to be working) - Work collaborated on with other co-workers Now I should clarify, I am not a lawyer. None of this is legal advice, yada yada... But generally you can work on side projects and skirt around intellectual property clauses as long as you make sure to distinguish work time and work resources from your personal projects. The biggest thing is to avoid doing it while at work (or when expected to be actively working if you are remote), and avoid using a company computer or piggybacking off company resources (for example making a sub-account in your employer's CI/CD tool to run tests for your software). So make sure you have seperate accounts for everything, avoid doing it on company time, and use a personal computer (not a work-issued computer) and you should be absolutely fine with working on a side project.
- adventured 7y ago
  > Most employement contracts will make it sound like they own every waking thought, but in most cases when this has been taken to court, the precedent has been set, that it really only applies to inventions or ideas that happen in relation to and using employer's resources. A simple example of this that I like to point out to people in tech to help them understand that an employer doesn't inherently own your soul, is picture yourself starting a Pizza Hut franchise (convenience store, or anything equivalent) strictly on your own time and dime entirely outside of work. Does your employer get to own that business, get to take it away from you, just because you work for them 9 to 5? Nope and it sounds particularly absurd when you frame it with something more traditional. Or imagine starting a real-estate renovation business, where you renovate houses in your own spare time; same thing, does IBM get to own your house renovation business just because you pull 9-5 for them? Hell no they don't. The only serious risk difference re starting tech businesses (vs other traditional businesses) while working in tech is in cases of competitive issues if you start something directly in the employer's wheelhouse. Then you better lawyer up well ahead of time and navigate it very carefully.

by willj 7y ago

pid_0 7y ago

>how do you deal with intellectual property clauses in employment contracts, such that your employer owns the “inventions” you create in your free time, on your own equipment, unrelated to the business area you work in? By not signing those things, plain and simple. I have never signed an employment contract and I never will.

icebraining 7y ago
Does that mean you never worked for a company (in an IP-related job), or actually managed to find companies who hired you without signing a contract? If the latter, what kind of companies do that?
- pid_0 7y ago
  I literally have never once signed an employment contract. I only work in devops/cloud/security consulting firms

giarc 7y ago

My employer (not a tech company but a healthcare provider) has a system whereby I submit a Potential Conflict of Interest document. They review and either give me their blessing to continue work (outside work hours obviously) or further review is to be conducted.

par 7y ago

most of the time you just roll the dice. As long as what you're doing is not in the same line of business as your employer, and you part on good terms, most of the time it's fine.

jacurtis 7y ago
This is actually a good distinction. If your side project is related to your employer's line of work then it is easy for your employer to argue that they own that creation, even if you used a personal computer and did it at night, etc. So for example if your employer makes inventory management software for coffee shops, and you decide to make an inventory management tool for grocery stores... then your employer will easily own your creation. On the other hand if you work for a search engine platform (ie Google), and you invent an API tool that parses recipes, and you did it all on your personal laptop and personal time, then you should be fine.

roland35 7y ago

Another important thing to keep in mind is to not use company resources in any capacity - your work laptop, work 3d printer, work time. This actually came up in the first season of silicon valley!

henryfjordan 7y ago

Your intuition is correct, you really should try to make sure your employer is aware of your intent to work on your own IP and you have some written document acknowledging that fact. Many companies have a form you fill out on your first day listing such projects. You owe your employer a duty of loyalty and so your projects cannot compete with them, and it helps to have them review the scope of the project and sign off on that fact. If you don't get this agreement from your employer, you might still technically be fine to work on your own business but you risk a court battle about it. > I’ve also read that these kinds of clauses can even apply several months after you terminate at your day job, which suggests that you can’t even start on the product until months after you’ve left. These would be non-compete clauses, illegal in California but legal in many other states. Your employer doesn't own any IP you create once they stop paying you, but if you are bound by a non-compete you'll need to be more careful.

scaryclam 7y ago
So much this. Don't rely on just not using company time or resources. Be open and honest. Get it in writing. If they won't give it to you, there's no chance of them being ok with it just because it's not on company time or resources. Know the boundaries before committing. Then you and your employer can keep a trustful and productive relationship while you try things out.

patchworkguilt 7y ago

Agree with what has already been said (dont use company resources like a work laptop, dont work on it during typical work hours, dont build a product that might in any way compete with your employer, etc.) As far as work contract goes, (I am NOT a lawyer, just based on experience), it's worth reading over and seeing what the language is around IP. Most states protect your right to build stuff on your own time (enables innovation, also you aren't the property of your company) making some more draconian contracts unenforceable. But it is always better to be proactive, rather than assuming a court battle will be unlikely because 1) who knows and 2) court is never cheap. If you want to work on something and you are worried about the language in your contract, talk to your employer about the project and getting some form of written exception for it. Side projects generally make for more capable, satisfied employees, so if a company made a massive stink about literally owning anything you make anywhere in your life, I'd be very very wary, as that mindset is a scary sign.

jacurtis 7y ago

Generally, when an employer owns your "inventions", this only applies to "inventions" created while using the employer's resources. Most employement contracts will make it sound like they own every waking thought, but in most cases when this has been taken to court, the precedent has been set, that it really only applies to inventions or ideas that happen in relation to and using employer's resources. So this means that an employer can argue they own software that you build: - On a company-issued computer - Using contacts you garnered through work - On company time (this is complicated for salary employees, but definitely applies to time in the office, or standard business hours when you are expected to be working) - Work collaborated on with other co-workers Now I should clarify, I am not a lawyer. None of this is legal advice, yada yada... But generally you can work on side projects and skirt around intellectual property clauses as long as you make sure to distinguish work time and work resources from your personal projects. The biggest thing is to avoid doing it while at work (or when expected to be actively working if you are remote), and avoid using a company computer or piggybacking off company resources (for example making a sub-account in your employer's CI/CD tool to run tests for your software). So make sure you have seperate accounts for everything, avoid doing it on company time, and use a personal computer (not a work-issued computer) and you should be absolutely fine with working on a side project.

adventured 7y ago
> Most employement contracts will make it sound like they own every waking thought, but in most cases when this has been taken to court, the precedent has been set, that it really only applies to inventions or ideas that happen in relation to and using employer's resources. A simple example of this that I like to point out to people in tech to help them understand that an employer doesn't inherently own your soul, is picture yourself starting a Pizza Hut franchise (convenience store, or anything equivalent) strictly on your own time and dime entirely outside of work. Does your employer get to own that business, get to take it away from you, just because you work for them 9 to 5? Nope and it sounds particularly absurd when you frame it with something more traditional. Or imagine starting a real-estate renovation business, where you renovate houses in your own spare time; same thing, does IBM get to own your house renovation business just because you pull 9-5 for them? Hell no they don't. The only serious risk difference re starting tech businesses (vs other traditional businesses) while working in tech is in cases of competitive issues if you start something directly in the employer's wheelhouse. Then you better lawyer up well ahead of time and navigate it very carefully.