5 ms·

Why NYC is not Palo Alto cc: MikeBloomberg

71 points by ajayjapan 15y ago

ntolia 15y ago
Unfortunately, the blog post is somewhat flawed. In the CA law he references, it clearly states that the exception to you owning your code/ideas is if they "relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer." While IANAL, the consensus on a number of websites is that, while working for a tech startup, anything that you do in your free time could technically belong to the company you work for as its related to your "employer's business."
- boucher 15y ago
  You're misreading the law. As an example, if you work for a software company that makes iPhone games, and you write an iPhone game in your spare time and with your own resources, that game could be at risk of being owned by your employer. If, however, instead of making an iPhone game you make a photo sharing website, there's very little risk that your work could be owned by your employer. There are obviously lots of gray areas in between. If you're planning to try and make money off something you built in your spare time, you should talk to a lawyer.
  - nbpoole 15y ago
    As you pointed out, it's a gray area. http://answers.onstartups.com/questions/19422/if-im-working-at-a-company-do-they-have-intellectual-property-rights-to-the-stu/20136#20136 http://answers.onstartups.com/questions/19422/if-im-working-... "Not related to your employer's line of work. Um, wait. What's the definition of related? If my employer is Microsoft, they do everything. They made a goddamn BARNEY PLUSH TOY with a computer in it once. Are plush toys related? Obviously operating systems, compilers, desktop applications, search engines, and games are related to Microsoft's line of work. Hmmm." "This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV."
    - michaelochurch 15y ago
      This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV. I don't think it's this devious. It's simpler than that. Strategically and legally speaking, you never don't want rights, even if those are rights you shouldn't, by any reasonable moral judgment, have. Companies ask for aggressive terms not to be malevolent and devious but because the lawyer's job is to get the most aggressive terms (i.e. the most rights) possible. If it were legal for a company to assert rights over an employee's work for 2 years after employment, shareholders would expect executives, and executives would therefore expect lawyers, to push for those terms. The game, at least in theory, is about getting the most aggressive (and yes, often unfair) terms upfront and letting the courts sort it out.
  - ntolia 15y ago
    The gray areas were exactly my point. There are sometimes clear-cut cases but generally things can be very vague to us non-lawyer types. Look at this earlier HN thread for more info - http://news.ycombinator.com/item?id=2208056 http://news.ycombinator.com/item?id=2208056 . It talks about all the potential ramifications and that one should almost always talk to a lawyer.
- Dornkirk 15y ago
  By chance do you (or anyone) know what the law is regarding side-projects in Illinois?
  - pash 15y ago
    Illinois generally follows the more permissive Cali-style model. The IEEE put out a publication that gives a solid overview of the differences in state laws; it mentions Illinois law specifically in a few places and includes a citation to Illinois statues that you can consult: http://www.ieeeusa.org/members/IPandtheengineer.pdf http://www.ieeeusa.org/members/IPandtheengineer.pdf
    - Dornkirk 15y ago
      Cool thanks!
- mahyarm 15y ago
  Nevada and Washington also have similar laws. In CA, non competes are also unenforceable, unlike washington for example.
  - danssig 15y ago
    Do you have an examples of a non compete being enforced?
    - tzs 15y ago
      http://www.geekwire.com/2011/judge-rejects-exmicrosoft-gms-latest-proposed-job-salesforcecom http://www.geekwire.com/2011/judge-rejects-exmicrosoft-gms-l...
      - danssig 15y ago
        Thanks for the link. That is literally insane. Modern day slavery. There is no logical basis for stopping someone from being in sales up to a year after leaving their previous company. Research is about the only area such a thing would make sense, and even then the restriction should just be on company secrets. Yet another reason I will never work in the United Corporations of America again.
andrewpi 15y ago
Nothing is stopping NYC startups & employees from drafting an appropriate contract to make ownership of side-project work belong to the employee.
- bluedanieru 15y ago
  Why would any employer agree to that?
  - photon_off 15y ago
    If it were a condition to hire a well-suited candidate. It's surprisingly difficult to find good programmers in NYC.
    - thomasgerbe 15y ago
      Where is it easy to find good programmers?
      - pagekalisedown 15y ago
        Montreal, Canada. And anywhere else where you have a high concentration of universities and a low cost of living.
  - boucher 15y ago
    Many employers operating outside of California have a policy very similar to the California law. There are some companies with even more generous policies, though I'm not familiar with any major tech companies with a more generous policy.
    - enjo 15y ago
      Its a small sample (5 times), but I've been asked to sign an invention clause at 100% of jobs I've held. All outside of CA.
  - FaceKicker 15y ago
songexe 15y ago
I'm reminded of Joel (Spolsky's) excellent commentary on this matter. http://answers.onstartups.com/questions/19422/if-im-working-at-a-company-do-they-have-intellectual-property-rights-to-the-stu/20136#20136 http://answers.onstartups.com/questions/19422/if-im-working-... tl;dr from the post: "So... to answer your question. There is unlikely to be substantial difference between the contracts that you sign at various companies in the US working as a programmer or in the law that applies."
- tghw 15y ago
  Joel's main point is that, even with CA's labor code, it can still come down to a gray area around what a company's "business" is. What I think the OP is pointing out is that in NY a company is able to set up a more restrictive contract than a company. At the very least (and from personal experience), companies in NY can introduce more gray areas in the contract (making it more difficult for entrepreneurs to feel safe in working on weekend projects) while still making it seem as if they follow the spirit of the CA labor code.
dblock 15y ago
Has anyone with a successful w/e project been successfully sued over this in NY state and lost?
- zedshaw 15y ago
  Yes, IBM is in NY state. If you want me to do your homework for you and buy a license for WestLaw then I'll pass. I'll leave it to you to prove a negative.
michaelpinto 15y ago
I recently took that startup genome quiz and I hit upon a truth that I sort of already realized: To launch a successful startup you need to do it full time. So yes your weekend project could be the next Facebook, but the odds are really against you. I think the real issue with Silicon Alley (having been a part of the scene since the early 90s) is that Wall Street still swallows quite a bit of the top tech talent — that with a super high overhead can get in your way. It's better than it was years ago, but that's more of the big issue for NYC as I see it.
- mahyarm 15y ago
  To experiment the waters in the first place, before you go full time, that weekend project can be very helpful.
kschrader 15y ago
At my company in NYC (Intent Media) the founders specifically spent time writing a clause into our standard employment agreement granting everyone the rights to their side projects. I'm not sure how common this is, but it seems like something that everyone should look at before signing on with a company, especially with the battle for talent that's going on right now.
- danssig 15y ago
  It's a show of good faith but they would have no claim to your side projects anyway (unless you produced a direct competing product that they could reasonably demonstrate you had stolen from them). At least that's my view of it. If anyone has an example of some programmer having his side project legally taken (i.e. a judge made him hand it over. Getting intimidated into handing it over outside of court doesn't count) by a company I'd love to see it.
  - bluedanieru 15y ago
    It's easy to brush off intimidation when you forget that fighting it often involves a huge investment in legal fees that few individuals have the resources to spend in a battle with a large corporation. Especially when the law probably isn't on your side and you signed a contract giving away your IP anyway. How about analyzing the situation for what it is: failing to protect independent innovation may result in less independent innovation. All the legal speculation and contract theorizing in the world will do no good if the facts of the matter tell a different story.
    - danssig 15y ago
      My point about intimidation was that if it is used then it still isn't proven that the case would hold water. You can't sign yourself into literal slavery, you can only be tricked into giving up rights that you have.
adamtmca 15y ago
While interesting, this seems like an insignificant piece of minutia, considering the title.
rickyjoshi01 15y ago
I think its not really about the law - most startups don't even realize it exists. Its much more about the culture. Investors in the Valley have had phenomenal success for some time directly investing in start-ups and firms are willing to take a bet that they will invest in the next big thing. NYC firms aren't as accessible, and even the big events (Disrupt) tend to be Valley based. Also NYC has a talent issue (although I think this is changing), for a very long-time NYC start-ups had to compete with banks to get tech talent and there isn't a huge pool of schools feeding into the city. Finally NYC is expensive, so its harder to get a "garage" to work from and 2K a month is tough to live on. That said a lot of these issues are being resolved, and I see both founders and investors making a very big dent this time around particularly with mobile start-ups.
- zmitri 15y ago
  I built a hack during the hackathon at Disrupt and was shocked to see that even though we were in New York, there were very similar traffic numbers from California (Disrupt was using an ISP in New Jersey so I am summing NY and NJ).

71 points by ajayjapan 15y ago

Unfortunately, the blog post is somewhat flawed. In the CA law he references, it clearly states that the exception to you owning your code/ideas is if they "relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer." While IANAL, the consensus on a number of websites is that, while working for a tech startup, anything that you do in your free time could technically belong to the company you work for as its related to your "employer's business."

boucher 15y ago
You're misreading the law. As an example, if you work for a software company that makes iPhone games, and you write an iPhone game in your spare time and with your own resources, that game could be at risk of being owned by your employer. If, however, instead of making an iPhone game you make a photo sharing website, there's very little risk that your work could be owned by your employer. There are obviously lots of gray areas in between. If you're planning to try and make money off something you built in your spare time, you should talk to a lawyer.
- nbpoole 15y ago
  As you pointed out, it's a gray area. http://answers.onstartups.com/questions/19422/if-im-working-at-a-company-do-they-have-intellectual-property-rights-to-the-stu/20136#20136 http://answers.onstartups.com/questions/19422/if-im-working-... "Not related to your employer's line of work. Um, wait. What's the definition of related? If my employer is Microsoft, they do everything. They made a goddamn BARNEY PLUSH TOY with a computer in it once. Are plush toys related? Obviously operating systems, compilers, desktop applications, search engines, and games are related to Microsoft's line of work. Hmmm." "This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV."
  - michaelochurch 15y ago
    This ambiguity is meant to create enough of a chilling effect on the employee working in their spare time that for all intents and purposes it achieves the effect that the employer wants: the employee doesn't bother doing any side projects that might turn into a business some day, and the employer gets a nice, refreshed employee coming to work in the morning after spending the previous evening watching TV. I don't think it's this devious. It's simpler than that. Strategically and legally speaking, you never don't want rights, even if those are rights you shouldn't, by any reasonable moral judgment, have. Companies ask for aggressive terms not to be malevolent and devious but because the lawyer's job is to get the most aggressive terms (i.e. the most rights) possible. If it were legal for a company to assert rights over an employee's work for 2 years after employment, shareholders would expect executives, and executives would therefore expect lawyers, to push for those terms. The game, at least in theory, is about getting the most aggressive (and yes, often unfair) terms upfront and letting the courts sort it out.
- ntolia 15y ago
  The gray areas were exactly my point. There are sometimes clear-cut cases but generally things can be very vague to us non-lawyer types. Look at this earlier HN thread for more info - http://news.ycombinator.com/item?id=2208056 http://news.ycombinator.com/item?id=2208056 . It talks about all the potential ramifications and that one should almost always talk to a lawyer.
Dornkirk 15y ago
By chance do you (or anyone) know what the law is regarding side-projects in Illinois?
- pash 15y ago
  Illinois generally follows the more permissive Cali-style model. The IEEE put out a publication that gives a solid overview of the differences in state laws; it mentions Illinois law specifically in a few places and includes a citation to Illinois statues that you can consult: http://www.ieeeusa.org/members/IPandtheengineer.pdf http://www.ieeeusa.org/members/IPandtheengineer.pdf
  - Dornkirk 15y ago
    Cool thanks!
mahyarm 15y ago
Nevada and Washington also have similar laws. In CA, non competes are also unenforceable, unlike washington for example.
- danssig 15y ago
  Do you have an examples of a non compete being enforced?
  - tzs 15y ago
    http://www.geekwire.com/2011/judge-rejects-exmicrosoft-gms-latest-proposed-job-salesforcecom http://www.geekwire.com/2011/judge-rejects-exmicrosoft-gms-l...
    - danssig 15y ago
      Thanks for the link. That is literally insane. Modern day slavery. There is no logical basis for stopping someone from being in sales up to a year after leaving their previous company. Research is about the only area such a thing would make sense, and even then the restriction should just be on company secrets. Yet another reason I will never work in the United Corporations of America again.

andrewpi 15y ago

Nothing is stopping NYC startups & employees from drafting an appropriate contract to make ownership of side-project work belong to the employee.

bluedanieru 15y ago
Why would any employer agree to that?
- photon_off 15y ago
  If it were a condition to hire a well-suited candidate. It's surprisingly difficult to find good programmers in NYC.
  - thomasgerbe 15y ago
    Where is it easy to find good programmers?
    - pagekalisedown 15y ago
      Montreal, Canada. And anywhere else where you have a high concentration of universities and a low cost of living.
- boucher 15y ago
  Many employers operating outside of California have a policy very similar to the California law. There are some companies with even more generous policies, though I'm not familiar with any major tech companies with a more generous policy.
  - enjo 15y ago
    Its a small sample (5 times), but I've been asked to sign an invention clause at 100% of jobs I've held. All outside of CA.
- FaceKicker 15y ago

songexe 15y ago

I'm reminded of Joel (Spolsky's) excellent commentary on this matter. http://answers.onstartups.com/questions/19422/if-im-working-at-a-company-do-they-have-intellectual-property-rights-to-the-stu/20136#20136 http://answers.onstartups.com/questions/19422/if-im-working-... tl;dr from the post: "So... to answer your question. There is unlikely to be substantial difference between the contracts that you sign at various companies in the US working as a programmer or in the law that applies."

tghw 15y ago
Joel's main point is that, even with CA's labor code, it can still come down to a gray area around what a company's "business" is. What I think the OP is pointing out is that in NY a company is able to set up a more restrictive contract than a company. At the very least (and from personal experience), companies in NY can introduce more gray areas in the contract (making it more difficult for entrepreneurs to feel safe in working on weekend projects) while still making it seem as if they follow the spirit of the CA labor code.

dblock 15y ago

Has anyone with a successful w/e project been successfully sued over this in NY state and lost?

zedshaw 15y ago
Yes, IBM is in NY state. If you want me to do your homework for you and buy a license for WestLaw then I'll pass. I'll leave it to you to prove a negative.

michaelpinto 15y ago

I recently took that startup genome quiz and I hit upon a truth that I sort of already realized: To launch a successful startup you need to do it full time. So yes your weekend project could be the next Facebook, but the odds are really against you. I think the real issue with Silicon Alley (having been a part of the scene since the early 90s) is that Wall Street still swallows quite a bit of the top tech talent — that with a super high overhead can get in your way. It's better than it was years ago, but that's more of the big issue for NYC as I see it.

mahyarm 15y ago
To experiment the waters in the first place, before you go full time, that weekend project can be very helpful.

kschrader 15y ago

At my company in NYC (Intent Media) the founders specifically spent time writing a clause into our standard employment agreement granting everyone the rights to their side projects. I'm not sure how common this is, but it seems like something that everyone should look at before signing on with a company, especially with the battle for talent that's going on right now.

danssig 15y ago
It's a show of good faith but they would have no claim to your side projects anyway (unless you produced a direct competing product that they could reasonably demonstrate you had stolen from them). At least that's my view of it. If anyone has an example of some programmer having his side project legally taken (i.e. a judge made him hand it over. Getting intimidated into handing it over outside of court doesn't count) by a company I'd love to see it.
- bluedanieru 15y ago
  It's easy to brush off intimidation when you forget that fighting it often involves a huge investment in legal fees that few individuals have the resources to spend in a battle with a large corporation. Especially when the law probably isn't on your side and you signed a contract giving away your IP anyway. How about analyzing the situation for what it is: failing to protect independent innovation may result in less independent innovation. All the legal speculation and contract theorizing in the world will do no good if the facts of the matter tell a different story.
  - danssig 15y ago
    My point about intimidation was that if it is used then it still isn't proven that the case would hold water. You can't sign yourself into literal slavery, you can only be tricked into giving up rights that you have.

adamtmca 15y ago

While interesting, this seems like an insignificant piece of minutia, considering the title.

rickyjoshi01 15y ago

I think its not really about the law - most startups don't even realize it exists. Its much more about the culture. Investors in the Valley have had phenomenal success for some time directly investing in start-ups and firms are willing to take a bet that they will invest in the next big thing. NYC firms aren't as accessible, and even the big events (Disrupt) tend to be Valley based. Also NYC has a talent issue (although I think this is changing), for a very long-time NYC start-ups had to compete with banks to get tech talent and there isn't a huge pool of schools feeding into the city. Finally NYC is expensive, so its harder to get a "garage" to work from and 2K a month is tough to live on. That said a lot of these issues are being resolved, and I see both founders and investors making a very big dent this time around particularly with mobile start-ups.

zmitri 15y ago
I built a hack during the hackathon at Disrupt and was shocked to see that even though we were in New York, there were very similar traffic numbers from California (Disrupt was using an ISP in New Jersey so I am summing NY and NJ).