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Comment by rogerbinns | Hacker News Reader

One thing that is rarely stated is a California law that things you do on your own equipment and time belong to you, not your employer. (Conflicts of interest aside.)

This let people experiment on the side, which sometimes failed, but sometimes discovered something useful. It takes some of the risk out of startups in the very early stages. By contrast my employer in the UK at the time claimed that anything I invented while employed by them (eg new cat food) would be owned by them, no matter how unrelated and no employer equipment used.

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In Canada, IP assignment only is for work done on company time & equipment unless otherwise assigned in your employment contract.

I've almost always excluded specific prior built or in-progress IP from my employment agreements without issue, as long as my employer's HR knows about it. Informing your employer of what you've created or are creating independently is almost always the best policy as it's unlikely they'll argue against it when it's early-stage (and you're protected if it becomes suddenly valuable).

More info http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic....

In California you aren't dependent on your employer being nice, or have any requirement to even inform them.

That is misleading. I've worked in California.

Firstly, obligatory invention disclosures are often enforceable if they're related to your employer's business, as they often exist to protect your mutual interests.

http://www.startupcompanylawyer.com/2009/01/08/what-do-you-n...

Secondly, IP assignment is related to this entry in the CA labour code:

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&gr...

Which clearly states that if you're working on the same area your employer is paying you for, it's not going to be trivial to claim it as your own even if you did it on your own time.

In short, California has the benefit of making IP assignment unenforceable if it's on your own time, in an unrelated area to your employer. But it's not carte blanche.

Not a lawyer, but talked to one about this with respect to Google's employment contract. His assertion was that you would be protected if your home project was not in conflict with your duties at the company, even if the company has other branches or departments working on something similar. He referenced some case law which involved an employee at either DEC SRC or DEC WRL who was working on his own thing, started a company and DEC tried to claim ownership based on the 'we do that' variant. Except he wasn't part of the group that did the conflicting work or involved with it. It has been like 5 years now since I did that research but if I can find it I'll see if I can add it to this thread.

Note - the other interesting bit here is that if you're worried you might be at risk, just quit. After all nobody who is suing their employer for ownership of their work stays an employee (at will work clauses). Even though I had confirmed that work on my project could not legally be claimed by Google by the time I had done the research and ascertained that it would end up in a lawsuit I was already convinced it wasn't going to be a good long term fit for me. That simplified the question immensely :-)

Note I did state "conflicts of interest aside". Something search related while at Google or accounting related while at Intuit would clearly fall in that category. A new pet food would not.

Sure, I just thought the suggestion that you don't even need to disclose it, while true in theory, can be risky.

My original post wasnt intended as criticism, it really just trying to provide commentary that while Canada doesn't have the full protections of Cali, the typical contract only assigns specific areas relate to your work.

Also, related, non-competes in Ontario at least are largely unenforceable.

> In Canada, IP assignment only is for work done on company time & equipment unless otherwise assigned in your employment contract.

That's true, but it's usually part of the boilerplate. I'm not suggesting it's related to the perceived problem, but every research position I've been in has had a clause like that. One place even offered to change it for me, saying "oh that's just some boilerplate the lawyers used."

I've worked for four different companies here in Canada—two of them startups—and none of them asked for anything except standard IP assignment (e.g., time/equipment) and disclosure of in-progress or previously created works.

I work for a Canadian company and IP assignment is written in the standard contract boilerplate. AFAIK it's never been enforced, but it's there.

It was in my employment contract the last time I switched jobs. I got it taken out.

Were they research positions?

That's a pity. Surprisingly, a lot of what makes innovation work has to do with the law.

Bankruptcy law for example really plays a big role when it comes to innovation.

If you're willing, would you please explain the bankruptcy connection? That's kinda cool!

Hey Wyatt,

I would argue that you need two things for the average person (rather than the independently wealthy) to be an entrepreneur: limited liability and bankruptcy. Without limited liability, an entrepreneur would be saddled personally with the debt of a failed venture. Without being able to declare bankruptcy as a last resort, they would not be able to discharge the debt and start fresh. Instead, they would be a debt slave to their financiers until it is repaid, which could be for the rest of their lives.

That's a lot of risk for an entrepreneur to take on, and too much for all but the most reckless -- I know my wife would never let me do that -- or those with the ability to bootstrap the venture without debt or outside investment.

I don't know about Canada, but the US has very lenient bankruptcy laws and the importance of that to innovation (as you noted) cannot be understated.

BK law in the US one case where, because things work well, people take it for granted and assume the laws work well everywhere. (They don't.)

Europeans probably think the same about healthcare. (For those not in the know, U.S. healthcare is awful and insurance companies kill thousands per year.)

I'd say that as of 2005's Bankruptcy Abuse Prevention and Consumer Protection Act our laws aren't so lenient anymore, specifically aimed at pushing most people from discharge of debts (ch7 bankruptcy) to being forced to repay a negotiated amount (ch13 bankruptcy). Theoretically it aims at snaring people who were bankrupting out of their credit card debt, but its definition of "consumer debt" is broad enough that if you took on any personal debt during the birthing of your business, odds are pretty good you can't bankrupt out of it.

It's not too bad, of course, when coupled with limited liability from the start of the business venture. In that case, the bankruptcy reform doesn't really touch you - it's only there to catch private consumers.

I'm not the OP, but I'm assuming they're referring to the common philosophy that if you make the cost of failure too high, people will stop trying.

In the context of bankruptcy, this means that laws that are heavily punitive towards bankruptcies, and where declaring bankruptcy threatens the basics of your entire life, people become more risk-averse.

I mean when your company fails, you are not personally liable to pay off the debt.

In some countries, this is not the case, and it creates a big legal barrier for being entrepreneurial.

Also, WA: http://apps.leg.wa.gov/rcw/default.aspx?cite=49.44.140

This is extremely interesting to me. It completely conflicts with the Microsoft Employee Agreement. While Microsoft has some tolerance for moonlighting (conditioned on many things such as managerial approval), if the processes are not follow it defaults to assumed ownership of all IP created by employees.

It's not uncommon for employment contracts to claim rights/powers that are invalid. When I lived in California it was common to see rights assignment in contracts even though a case would never make it to court in most cases, as I understand it. (IANAL)

California is still own equipment, own time, lack of conflict, can't argue. Doesn't mean the employer can't make things difficult for you since they have the bigger pocket book.

The employee agreement I signed* a long time back basically reads like a contractual restatement of RCW 49.44.140. Manager approval used to be required for employees not based in Washington but that was eliminated years ago. The moonlighting and employment agreements are required reading for us prior to developing independent apps for Windows Phone.

* - I am a long-time (greater than 10 years) Microsoft employee.

Wow. You just sold me completely on WA > TX or NV.

I think that IP clause in the UK is the result of a boilerplate contract. I always get them to remove it. Employers should have no right to claim ownership of what you do as a hobby IMO.

Wow. I would never have expected that in other countries what you produce on your own time is the property of your employer. That is an absolute non-starter for entrepreneurship .

It's not 'other countries', or exactly what you're saying. It's that other locals (including other states) don't explicitly state otherwise in law. In many states it's either not mentioned, or left to your employment contract details - in California, it's enshrined in the legal code.

Do you know what the legal basis for this is in the UK? I'm curious and google doesn't seem to be giving me anything useful.

I also don't see how this could practically apply to all intellectual property you create whilst employed otherwise you would be open to being sued for posting on a blog since you are distributing the companies IP (i.e the words you wrote) without the companies permission.

I am not familiar with the UK, but even in the US it varies from state to state.

People who aren't explicitly protected by state law get fired for putting something on the internet that their employer doesn't like. There is an explicit carve out in California law (http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&gr...) I don't know if there are any other states that have this carve out, but that section combined with "Section 16600 of the California Business and Professions Code states that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." makes quitting your job, taking your own IP made on your own time, and competing with your employer. A protected activity. in California.

Some will tell you otherwise (Google does this) but I sought out advice from a labor law attorney on the legality of their claim and his opinion was that it was largely unenforceable. You couldn't use proprietary information in your gizmo but you could, for example, write a phone operating system on your own time and equipment, quit Google and start competing with Android and they would have a hard time preventing it. But only in California, the employment agreement would hold up in Boston for example.

The employment contracts will include clauses to that effect. All the company has to do is wait till you do something that appears successful and then jump in. When I worked in the UK all employment contracts I was given also prohibited any work elsewhere without company permission - eg you couldn't also work part time at a local supermarket. That is something I have never seen in California employment contracts.

An example of California law working is that the founders of Hotmail were working for other companies when they wondered why you couldn't access email in a browser. eBay was a similar hobby project.

I'm curious how enforceable this clause would be in the UK since it is usually considered to have more employee-favoured legislation than the US.

You forget that we're comparing employment law in one US state versus the employment law in a whole nation.

Huh? I'm just asking a question.

I am pretty sure an employer can't stop you working elsewhere, many of us are protected by human rights laws that void those sorts of terms.

Well as it was explained to me UK employment law descends from the "masters" and servants" act note the term "servant"

A quick Google seems to indicate the "Copyright, Designs and Patents Act 1988" is the relevant law

From my understanding (as told to me by a senior HR professional) is that the UK and CA are similar if your IP is "related" to your work your employer owns it.

Trying to claim that as an IT professional your new cat food belongs to them would not work but if it was anything to do with IT you might be in trouble both in the USA and UK (employment law is descended from the same roots in both countrys)

I've done moonlighting while working for two different employers in the past. In each case, I worked out an agreement in advance with my employer that the moonlighting work was independent of the employer.

Neither had any difficulty agreeing to it, and there was never any trouble later about it. I know others who have done the same.

Just ask.

This is fairly common in Europe and other countries as well. It is not matter of law, but contract signed with your employer.

But doesn't Cali law invalidate such terms? So it is a matter of law in that the law permits such terms. Its like the right to strike - in many countries that right can't be contracted away.

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