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Are NDA 'Prior Inventions' Clauses Safe to Sign? 300

BenderMan asks: "I own a small consulting company. Today I was asked by yet another corporate customer to sign an NDA with the increasingly popular 'Prior Inventions' clause. The gist of it is they want you to provide a list of all your past and current inventions and/or ideas so they can define and protect the intellectual property that they have hired you to build. Like many of us that lay awake at night, whilst the hamster wheel spins new ideas, I've got a number of un-patented works in various stages of development. Given that mutual NDAs only provide one year of protection, I don't feel obligated, nor do I have sufficient time and energy, to fully and properly document my inventions for an NDA. While these clauses are written with good intentions, the reality is that these valuable ideas would be placed in the hands of people that could potentially profit with impunity (Have you priced patents lately?). Unfortunately many companies are not willing to strike this clause from their contracts. Does Slashdot agree that this is a concern, and how have you dealt with these situations?"
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Are NDA 'Prior Inventions' Clauses Safe to Sign?

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  • Prior Art (Score:4, Insightful)

    by The MAZZTer ( 911996 ) <megazzt@NoSpaM.gmail.com> on Thursday August 24, 2006 @11:24PM (#15975771) Homepage

    IANAL, but the document itself would be proof of Prior Art, allowing for easy invalidation of their patent... right? But then again, not everyone has laywers, time, and money to chase patents with... :(

    • On second thought, I suppose it'd have to be something concrete to be Prior Art... and they'd have to make something concrete to patent it, right? As in actually implement/create something, not just spout off words... although lots of patents are doubtless based on just words...
      • On second thought, I suppose it'd have to be something concrete to be Prior Art
        Nope, I think you were right the first time.

        Prior art generally has to be and idea published to the public, which means that [Your] patentable invention/idea is not protected if no one knows about it.

        Even though the NDA isn't 'public', for the specific company, anything tacked onto that NDA would probably qualify as prior art, since it was 'published' to them.
        • Re:Prior Art (Score:4, Interesting)

          by mrbcs ( 737902 ) on Friday August 25, 2006 @12:38AM (#15976045)
          If the idea is in the public domain, it can't be patented. Once patented, it becomes available for all to see. That's part of the process, you get the "patent protection" and the rest of the world gets to see what you did and how you did it. IMHO, disclosing any ideas would be very unwise. They could easliy steal the idea and you have no protection or proof.

          I also believe the whole patent system is a complete sham. Patents are good as long as you have tons of cash for lawyers to fight and protect it. Any good lawyer can subvert a patent. Yes I have personal experience in this and I'm kinda bitter about it. Wasted a lot of money for this information.

          If you guys are bored and want some shits and giggles, search the US Patent office. There's all kinds of stupid ideas there that will never fly and/or never be able to produce. Doesn't stop some lawyer from taking 10 grand from a bozo though.

    • Re: (Score:3, Insightful)

      by qbwiz ( 87077 ) *
      There's not just the risk of them patenting, but also the risk of them stealing the idea and developing it faster than he would. Remember what happened with Stacker and Microsoft?
      • Re:Prior Art (Score:4, Interesting)

        by letxa2000 ( 215841 ) on Friday August 25, 2006 @12:42AM (#15976059)
        I would never specify in a contract what my prior art is. My contracts always specify that anything belonging to the client prior to the contract remains theirs and anything belonging to me prior to the contract--or that I come up with during the contract but not materially related to the contract--remains mine. No lists are necessary. If there's a dispute over who owned what when, that's what courts are for. I'm not going to enumerate my property because it then implies nothing else was mine. No way. Let the contract stipulate the spirit of the contract (that no-one is trying to rob anyone else's idea) and if someone believes that spirit was violate, take it to court and let it get worked out there.
        • Re: (Score:2, Interesting)

          by iocat ( 572367 )
          A lot of it is, say you get a contract to build X, but you are going to use tools, Y, that you already have. Since it's a work for hire, they want to know exactly what Y is, so that they understand the scope of what X, which they're going to own, will be.

          In practice, we usually say things like "Tool Z, which provides a propriatary method for generating ABC" -- fairly broad and non-specific, but clear. Then we make it clear that they are getting X, but not Y, and nor are they getting any improvements to Y t

        • Re: (Score:2, Insightful)

          by Skrynesaver ( 994435 )
          In a perfect world not specifying your own prior art would be ideal, however I have seen employment contracts where the employee is asked to submit a list of prior art before starting employment with the company. I have been told that in cases of direct employment these contracts can be negated because the employee is efectively under duress, ie. sign this or no job, with the usual IANAL caveat I'd be interested in hearing what other people think of the enforcability(word?) of such a contract.
          • I would like to think that such a contract would be unenforcable. Indeed, here in the UK we are in the middle of the Gowers Review of intellectual property, and I raised this very issue with them.

            In the meantime, though, I wouldn't go near such a contract without a lawyer.

            • Re:Prior Art (Score:4, Informative)

              by BVis ( 267028 ) on Friday August 25, 2006 @08:28AM (#15977497)
              The difference is that employees actually have rights in the UK. More specifically, there are rules about employer/employee relations that are actually ENFORCED in the UK. Over on this side of the pond employees are generally treated no better than disposable diapers - shit all over 'em, throw them away when you're done. It's the norm here for an employee to be terminated with no stated reason, because 1) the employer is not obligated to provide a reason and 2) if they do, they might have to answer for the fact that the reason is complete bullshit.

              This attitude is carried over to IP in a lot of cases. More than once, a company has laid claim to an invention that an employee has developed on their own time, using no company resources, even in the absence of an "all your IP are belong to us" clause in their job description. (Not that job descriptions are enforceable by the employee here anyway; they almost always include "other tasks as assigned by management", which means that even if you're hired as a Java developer, your employer can require you to clean toilets. Then if you leave "voluntarily", you're ineligible for any unemployment insurance benefits, since you walked off the job. Theoretically you can appeal by asserting that the job was not as represented, but the burden of proof is on you.) The employee almost always cannot afford to defend themselves against this predatory action; tort law over here doesn't have that clause in it that the loser pays the winner's legal fees, which means that the employee will quickly bankrupt themselves defending the case.

              In the meantime, though, I wouldn't go near such a contract without a lawyer.
              Is it worth it to pay a lawyer $5000 to tell you "yeah, you don't have any rights here, you can either agree to this or not get the job"? I don't know many people who are looking for work who have that kind of cash.
              • Re:Prior Art (Score:4, Insightful)

                by The Spoonman ( 634311 ) on Friday August 25, 2006 @09:25AM (#15978007) Homepage
                It's the norm here for an employee to be terminated with no stated reason, because 1) the employer is not obligated to provide a reason and 2) if they do, they might have to answer for the fact that the reason is complete bullshit.

                Not exactly...it's much worse than that. The employer is not obligated to provide a reason, because an employer doesn't NEED a reason. They can come in an fire you on a whim, and it would be legal. The basic idea is that you should be able to quit without reason or repercussion, so employers should be able to fire you similarly. The problem is, it's not reciprocal in any way. If you quit a company out of the blue, you're more than likely not going to cause any kind of financial difficulty to the company. They'll get along just fine without you. If, however, your employer decides to go skeet shooting with pink slips you're pretty much fucked. They also have all these nifty policies and agreements you have to sign before employment, all of which are designed to lock out any fringe chance you might have had for suing for wrongful termination. It's a wonderful system we live under, and people wonder why employees are so frustrated. Here's a clue: we're bent over teh barrel, our pants are down and you've just walked in the door with a donkey. You tell ME why I'm so worried!

                Under these laws, though, it should be legal for me to walk into a place and when told I have tons of paperwork to sign, I hand over a pile of my own. I think it should be fair that a company not hold me responsible for the failure of a system if I haven't been trained in how to use that system. Seems reasonable. I also shouldn't be held responsible for failures due to management mistakes or procedural processes. If I'm expected to follow a set of rules, then they should, too. Why not?

    • Re:Prior Art (Score:5, Informative)

      by Aneurysm9 ( 723000 ) on Thursday August 24, 2006 @11:42PM (#15975859)
      If my memory of Patent Practice and Procedures serves correct, only publicly disclosed inventions can be prior art. Inventions disclosed under an NDA would likely not be considered public and, thus, could not constitute prior art.
      • by edwdig ( 47888 )
        I think they're in the process of changing this, but at least for now, aren't patents awarded to the first to invent, not the first to file? If you were to file for your own patent, wouldn't the agreement demonstrate that you invented it first? It's not quite the same as invalidating their patent.
        • Yes, first to invent but there is a limitaiton on that. You basically have a year between inventing something and filing for the patent. So if you file a patent, if someone else comes along within that year and files, and can show they invented before you then yours is invalid. If there are no filings within that time and there are no other issues then your patent claim stands.
    • Re: (Score:3, Interesting)

      by simong_oz ( 321118 )
      I wish people would get a clue about IP protection, and patents in particular.

      The entire point of an NDA is that the disclosure is not public, but private, which means it is NOT admissable as prior art. Even if you deliberately go and disclose the idea in public, i.e. violate the NDA to try and make it prior art and thereby invalidate a patent, in many countries this will still be admmissable.

      Every NDA is different - you need to examine the clauses in the actual NDA in front of you. In practice if you're no
  • by chris_eineke ( 634570 ) on Thursday August 24, 2006 @11:33PM (#15975817) Homepage Journal
    Either bend over backwards to please your customers or bend over forwards to be pleased by your customers.

    How will you decide?

    Film at 11!

    (Every time someone puts you in a position where you have to choose between two lesser evils, take the third one or make one up yourself.)
  • by petard ( 117521 ) * on Thursday August 24, 2006 @11:34PM (#15975820) Homepage
    It's tough to say without seeing the clause whether you really have the problem you imagine. And, ob. disclaimer, IANAL. TINLA.

    I've solved this in the past by making sure that their ownership of my ideas is restricted to items produced in the course of (as opposed to during the term of) working for them. This gives them ownership of IP created as a result of executing their project and no more. In terms of the "Prior Inventions" clause, I'd attempt to rename it "Prior published inventions" and give them a good list if they won't strike it. If they really want a list of unpublished inventions as well, maybe you could extend the term of their NDA to something insane like 10 years?

    If your ideas are valuable, they won't strike the prior inventions clause and won't amend it as I describe, and they won't restrict the IP transfer clause to items produced in the course of your contract, you may be dealing with a client that you should turn down. Those exist, and, though it's painful to turn away business, sometimes it's good sense to do so.
    • by jours ( 663228 ) on Friday August 25, 2006 @12:26AM (#15976022)
      Here's a sample of a 'prior inventions' clause: http://www.rhs.com/web/blog/PowerOfTheSchwartz.nsf /d6plinks/RSCZ-6NY3U9 [rhs.com]

      Like this guy says, I don't see how I could sign this, especially if I'm working with other customers at the time.
      • by petard ( 117521 ) *
        Like this guy says, I don't see how I could sign this, especially if I'm working with other customers at the time.
        Yeah. If he's up against one that bad, the only options are arguing him down or walking away. You'd think with a clause like that particular one, though, that the company just couldn't get anyone to do work for them :-).
        • Re: (Score:3, Informative)

          by Svartalf ( 2997 )
          Eventually they don't. My previous day job (not the current one) is probably going to find out
          that their dismissal of me is going to be very unpleasant- because they can't prove that I was
          dismissed for NOT signing one of these things and worked over a 12 month period for them.

          1) These clauses, typically, are unenforceable- they only have rights to what is relevant to them.
          2) Typically, they're bundled with a Non Disclose/Non Compete- this is an IP assignment agreement;
          you're really not supposed to combine
    • Re: (Score:3, Interesting)

      by mcrbids ( 148650 )
      I've solved this in the past by making sure that their ownership of my ideas is restricted to items produced in the course of (as opposed to during the term of) working for them.

      Wow. That sucks!

      I've solved this in the past by making sure that none of my ideas are ever owned by anybody but me. I produce software and routinely borrow code and ideas from past projects. It's called "experience" and it's a big part of what I bring to the table. In exchange, I don't do work unless I get ownership of the resulting
      • Re: (Score:3, Informative)

        by simong_oz ( 321118 )
        Software is usually covered by copyright law, not patent law. It is rare (except in the US) for software to be patentable, so by default, if you create the code, then you get the copyright automatically (and hence the IP).

        Many companies will not hire consultants unless they get the IP out of the end, and most are happy to limit this to the IP they actually paid for (although some will try and slip clauses like "future/past IP" in as well so watch out).
      • by petard ( 117521 ) *

        I've solved this in the past by making sure that none of my ideas are ever owned by anybody but me. I produce software and routinely borrow code and ideas from past projects. It's called "experience" and it's a big part of what I bring to the table. In exchange, I don't do work unless I get ownership of the resulting code. Then, I grant whatever license is appropriate for the use of the resulting code.

        That's a nice approach. But if you can do that, you're talking about a different kind of consulting busines

      • by Lord Grey ( 463613 ) * on Friday August 25, 2006 @07:59AM (#15977321)
        I've solved this in the past by making sure that none of my ideas are ever owned by anybody but me. I produce software and routinely borrow code and ideas from past projects. It's called "experience" and it's a big part of what I bring to the table. In exchange, I don't do work unless I get ownership of the resulting code. Then, I grant whatever license is appropriate for the use of the resulting code.

        My company does exactly the opposite, with one clause: Any code we produce under contract is owned by the customer, but we reserve the right to excerpt algorithms or functions for reuse in other code (under contract or not). There are a couple of big advantages to that:

        1. Code ownership matches customer expectations. Very, very few people understand the whole licensing issue, and if you try to explain it to them then they think you're trying to pull one over on them. The vast majority of people expect to own the software they've paid to be produced.
        2. Sales tax. Sales tax should be charged when transferring "property" via a sale. Creating software is creating a "property" under the eyes of the government, owned by the programmer's employer (or the programmer, if self-employed), and if the software is sold to another entity then you have to charge sales tax. Writing software under a Work For Hire type of contract makes you (if effect) a temporary employee of the customer. The customer is the default owner of the created property, sales tax doesn't apply, and that saves a huge amount of time and money for all concerned. (BTW, I'm not a tax guy at all. I'm speaking through the direct experience of going through a Texas sales tax audit that was easily the worst six weeks of my entire life. I learned a lot, but I never want to do that again.)
  • I signed one (Score:5, Insightful)

    by MobyDisk ( 75490 ) on Thursday August 24, 2006 @11:37PM (#15975834) Homepage
    I asked my would-be employer about it, and they pointed to the sentence that constrained the clause to inventions applicable to what the company produced. Since the company sold health care software I didn't feel threatened. My personal inventions don't deal in that area.
    • Re:I signed one (Score:5, Informative)

      by hyfe ( 641811 ) on Friday August 25, 2006 @01:47AM (#15976231)
      I asked my would-be employer about it,
      A contract holds you to what it says, not to what the other party think it says. Always.
    • Re: (Score:3, Interesting)

      by Angostura ( 703910 )
      Now lets see - what "might be applicable to healthcare products" - how about any kind of software?

      "but it's a real time operating system designed to run an oil drilling rig" ..." yes, and it may well be applicable to our dentistry products. It is ours. Thank you".

      "It's an e-mail client" ... "yes, our healthcare clients use electronic messaging. Thank you".
  • by patio11 ( 857072 ) on Thursday August 24, 2006 @11:37PM (#15975836)
    Odds are they are using boilerplate language and have even less desire to hear about your velcro detachable sideburns than you have to tell them. Just ask them if they're wedded to having that clause in the contract, and if not strike it. Alternately, specify that the clause only applies to a certain problem domain (e.g. "With respect to image processing, we warrant that the following is an exhaustive list of our IP: blah blah blah" and then your Sideburns 2.0 get to remain your own secret.)

    IANAL, DTAYROS (don't trust anything you read on Slashdot).
    • by Dr. Awktagon ( 233360 ) * on Friday August 25, 2006 @12:10AM (#15975964) Homepage

      velcro detachable sideburns

      Shit.

      *crumples and throws away patent application*

      • by Secrity ( 742221 )
        Magnetic attachable sideburns (pat. pend.) are MUCH better anyway, except the magnetic capsules embedded under the skin on my face keep setting off the metal detectors at airports.
    • by Baki ( 72515 )
      but even then, "for 2 years thereafter" which is part of the clause that someone pointed to here, is not acceptable.
      who knows what you do in 1 year, and who your next customer is.

      luckily, in many european countries any clause that may limit the ability of a person to get a job is automatically illegal and void. many companies have you sign some clause for non-competition, e.g. you may not quit and take a new job in a similar company within x miles distance for 2 years etc. you can sign but plainly ignore su
    • by Otter ( 3800 )
      Odds are they are using boilerplate language and have even less desire to hear about your velcro detachable sideburns than you have to tell them.

      Exactly. These clauses are there so employees don't develop projects in the course of their job, leave and take the IP with them. It's theoretically possible that there is a company that lives by grabbing its employees' prior inventions and an employee who is such a whirlwind of invention that he doesn't have time to document everything. But in the real world, any

  • by Anonymous Coward on Thursday August 24, 2006 @11:39PM (#15975844)
    I was co-owner of a small company that was bought by a larger company for some technology we designed. They hired us to further develop it. I had to sign one of these prior inventions things.

    The main thing I was worried about was that these guys were going to buy our company to get our techology then fire us. The project we were working on before we were bought was based off some hobbyist stuff I had built before starting the company. In fact, the core valuable parts remained exactly the same in both the hobby projects and the project we were selling.

    Without going into details, I listed the hobby projects as prior inventions. They never really thought twice about it because they looked so inocuous.
  • IANAL (Score:5, Insightful)

    by Bitsy Boffin ( 110334 ) on Thursday August 24, 2006 @11:40PM (#15975852) Homepage
    IANAL - and that's really the crux of the matter, neither are you, neither are 95% (ass pluck statistic) of Slashdot. If you're worried, take the contract to a lawyer (preferably experienced in intellectual property things), explain to them your concerns, have them examine and make any proposed alterations they think would be necessary.

    Don't be pressured into signing something you're not satisfied with, in most civilised countries a (potential) employer cannot hand you a contract and say sign now or sign out, you can and should take the time you need to properly examine the contract, by professionals if necessary.
    • Re:IANAL (Score:4, Informative)

      by damsa ( 840364 ) on Thursday August 24, 2006 @11:59PM (#15975928)
      I am a lawyer. Seeing how you spelled civilized, I see you do not live in the USA, a potential employer in the US can and do hand you a contract and sign now or sign out. There are a certain juridictions that are an exception to this rule.
      • Re:IANAL (Score:5, Interesting)

        by Skippy_kangaroo ( 850507 ) on Friday August 25, 2006 @12:18AM (#15975998)
        How can they claim that there is any meeting of the minds or that all terms in the contract were fully understood by the 'employee' if it comes up in court later. Can the employers insist that you sign it without giving you time to properly review it (even without a lawyer)?

        Because I would consider an employer insisting I sign a contract and denying me the opportunity to review it an abusive employer. But moreso, such conduct would seem to render the contract unenforceable. Can such employment contracts signed under such conditions be upheld by US courts?
        • by arivanov ( 12034 )
          It is not only that. You are expected not to read the small print and not get interested in the details. You are supposed to be passionate about what you do (and definitely not caring about such minor details like the way your employer can rape your ideas and throw you out). Just read this old slashdot article [slashdot.org] and you will see why. The really scary part is that this is starting to filter across the pond and infect labour relationships on this side of the continent as well.
        • IAAL (Score:3, Insightful)

          by ChrisBush ( 893416 )
          How can they claim that there is any meeting of the minds or that all terms in the contract were fully understood by the 'employee' if it comes up in court later.

          Because you signed it. If you sign a contract, it is presumed you understood what you were doing and becomes your burden to proove otherwise. This is a difficult, expensive, and time-consuming level of proof to meet. You can't just say, "I didn't understand it" and expect a court to rule in your favor.

          Can the employers insist that you sign it

      • "I am a lawyer...There are a certain juridictions that are an exception to this rule."

        Which law school did you say you graduated from again? Let me guess, they didn't have an emphasis on legal writing...

        • by damsa ( 840364 )
          Actually my school is ranked high in legal writing however they are ranked low in the use of the delete key.
    • Sure they can (Score:5, Insightful)

      by Sycraft-fu ( 314770 ) on Friday August 25, 2006 @01:34AM (#15976195)
      They aren't under any obligation to hire you, just as you aren't under any obligation to work for them. In general though, it doesn't matter. The main reason being that they probably WON'T say that is they are honestly interested in you. Taking a hard line with new recruits is an excellent way to not get the people you want. Now maybe they have a ton of people lined up and you are just here because your name came first in the stack, but usually it's because they like you best. Also you'd have to ask yourself if you really want to work for someone who says "Do this now with no thought or we fire you"? If they are going to give you such shitty treatment in the hiring process, it's not likely to get any better later.

      I think you'll find most job offers have a bit of shelf life to them. You can say "Sounds pretty good, I just need a couple days to think about it," and the offer will probably be valid after those couple of days. If it's not, chances are that you probably didn't want the job. Either they are colossal assholes, or they are hiring you as a replaceable cog and they intend to use you up and throw you out.

      Now of course the situation may be different if you are desperate for work, however in that case perhaps you are willing to put up with the crap so perhaps you are also willing to put up with the crappy contract with no thought. However if that's not the case you should ask for time to think and review it, and if they won't allow that, it's a pretty good sing you didn't want that job anyhow.
    • Re: (Score:3, Interesting)

      IANAL - and that's really the crux of the matter, neither are you, neither are 95% (ass pluck statistic) of Slashdot. If you're worried, take the contract to a lawyer (preferably experienced in intellectual property things), explain to them your concerns, have them examine and make any proposed alterations they think would be necessary.

      Don't be pressured into signing something you're not satisfied with, in most civilised countries a (potential) employer cannot hand you a contract and say sign now or sign o
  • by foniksonik ( 573572 ) on Thursday August 24, 2006 @11:42PM (#15975860) Homepage Journal
    Just add a similar clause for them on to the contract and see them groan... why should you bear the burden of discovery alone? You've got ideas you want to develop later right? So they need to disclose ALL of their ongoing development efforts in all areas of their business and don't let them off easy... if it looks like they're skimping on areas you know they're doing work in call them out.

    Or you could follow the letter of the law and disclose a bunch of dumb ideas you had when you were ten and let them know that it might take you a while to get up to the present day.

    Hmmm I once had this idea about how to train a monkey by dipping his feet in red paint so he'd know not to climb on the table anymore, then there was my GIJOE para-glider apparatus... it almost worked too!

    • Almost forgot... you could take a page out of SCO's book and disclose your obfuscated copy of the Linux kernel ;-p That might keep them busy drooling for a while until they realize what they're looking at hehehe
  • Naive suggestion. (Score:4, Interesting)

    by Lux ( 49200 ) on Thursday August 24, 2006 @11:45PM (#15975873)
    This is probably a naive suggestion, but if your business is specialized enough, you might be in a relatively small pool of entities competing for these contracts. Perhaps you could take a few of your competitors out to lunch and ask what they think about these clauses?

    If enough people in your market find them distasteful and decide to stop accepting such contracts, the contracts will probably become more mutable than they seem to be now. A vocal minority willing to tighten their belts for a few months and offering lucid objections to the clause might be sufficient to effect some flexibility in your clients.

    Of course, that will involve passing up work/money. Might be cheaper to just document the stuff.
    • IANAL, never played one on TV, nor even dated one, but I think that what you are describing is a cartel [wikipedia.org], "prohibited by antitrust laws in most countries"... Not that I would not suggest to you, nor to the original poster, organizing in this particular way with your competitors, but maybe it is not entirely wise to post your intentions on /. ? :)

      Paul B.
      • Re: (Score:3, Insightful)

        by SuperQ ( 431 ) *
        And a cartel by another name is a union. Because of the nature of small busineses, this seems like it is on the border of worker's rights.
      • But wouldn't aren't there already plenty of organizations that do the same thing in lots of different industries? What about the (RI|MP)AA? The BSA? All these groups that /. loves to hate behave this way, and they aren't being investigated for antitrust. I'm sure if one went about it right one could probably create an organization of contractors to help contractors protect their rights. A quick look at Wikipedia indicates that such a group might be called a Trade Organization. Of course, if they could
  • Unless you put them into practice. People who keep their ideas secret even though they have neither the means nor the opportunity to implement them are just hoarding for the sake of hoarding.
  • Struck clauses (Score:5, Insightful)

    by Spazmania ( 174582 ) on Thursday August 24, 2006 @11:52PM (#15975907) Homepage
    I ran in to this situation. The company made me the offer, we negotiated and I said yes. They handed me the contract to sign. I read it. The employment contract had some wording about helping them secure intellectual property rights following the end of my employment. It was badly worded: as spelled out it created an indefinate obligation to do work for free following employment. So I said, "Look, I see what you're getting at here but this is bad wording. We should tweak it a bit." They said, "No, everybody signs it."

    Not everybody. I didn't. And a month later I got a much better job at a much better salary.

    My advice to you is this: If you're not important enough that they're willing to negotiate the contract then you're not important enough and while you work there you'll never be important enough. Walk away. Its a bad deal.
    • Re: (Score:2, Interesting)

      by UncleSocks ( 243734 )
      I concur. I've seen these on nearly every contract I've been offered. I strike them and they say essentially, "okay - no prob, we always try for this..."
  • by Anonymous Coward on Thursday August 24, 2006 @11:53PM (#15975911)
    The customer does not have ownership of anything not directly applicable to the work they are paying for. They acknowledge that they have no IP rights to anything you may invent on your own time, with your own equipment.

    I have had customers demand ownership and license of all our prior work. After I stopped laughing, which really pissed off the purchasing agent, I pointed out that they really didn't want to test that in court, so that clause was declined. They try other ways as well.

    Each customer will do their best to stake out territory in your mind. My approach has been to define for them what they may stake out, and what the limits are on it. If you control that conversation, they need to negotiate your terms. They claim they won't, but most reasonable ones will at the end of the day.

    For this reason, we don't sign non-competes, and we require mutual NDAs. We have been burned a number of times with others NDA documents, so if we find them insufficient, we force the customer to sign one of ours, or we simply refuse to discuss confidential material with them. Non-competes between organizations are funny, but some customers try to require this. Our response is uniformly that we will sign the non-compete under the requirement that the customer requesting the non-compete execution pay full wages, business expenses, etc. for the entire duration of the non-compete. When they tell you how ludicrous that is, it lets you tell them how ludicrous it is to request that your company not work in its field for a period of time, and if they are going to demand it, they are going to need to pay for what they ask for.

    We have had customers steal from us, "partners" lie to us and stab us in the back. It is part of business. Ethics and morality take a back seat to egos, and the pursuit of the almighty dollar.

    Your job is to demand certain core rights, and stick to your guns. Have a few you can negotiate away and get something in return for this, but if the customer understands that there are some red lines not to be crossed, well, they will either respect you for it and negotiate, or leave you for some other pushover.

    You create something outside of the contract domain, scope, with your own stuff, even if it was during the contract, as long as you did it on your own time and with your own stuff, you own it. You need to demand that. If you don't they are going to insist on owning everything in your head. If you let them push you around here, well, your compensation is going to suck as well.

    • But the main topic is what if your required to disclose all your ideas and every idea you heard since the beginning of time under an NDA they sign?
  • by Animats ( 122034 ) on Thursday August 24, 2006 @11:54PM (#15975913) Homepage

    If you're really consulting, not becoming a psuedo-employee, you definitely don't want to sign that. That's an employee kind of thing, where the assumption is that you have no other customers. If you do have multiple clients, you don't want to limit the areas in which you can work. Such NDAs must be very narrowly drawn. You can work this out. Ask them what NDAs they ask from, say, McKinsey people.

    I once turned down consulting at Xerox PARC for that reason. They wanted an overreaching agreement for a part time deal.

    • by hughk ( 248126 )
      Ask them what NDAs they ask from, say, McKinsey people.

      Do they ever have to sign anything beyond a standard confidentiality clause? They are business process strategy consultants *not* technical (or arguably, even useful other than a security blanket for the board at the shareholder meetings).

  • by Morgaine ( 4316 ) on Thursday August 24, 2006 @11:55PM (#15975917)
    Your good ideas are your lifeblood. If you have been honing and developing methods and techniques over the years, then you've been building a priceless (or at least highly valuable) personal resource, to be metered out in small, controlled, and non-exclusive amounts to your clients.

    For any single client to want the whole lot, nicely gift-wrapped and handed to them on a plate, is the height of impertinence, even if they say that they are going to use the document merely as reference and to give you proper accreditation. This is the real world --- that won't happen. And you probably don't want to spend 6 figures in court to enforce it.

    By all means produce such a comprehensive document. I suggest that the MINIMUM price under which you would offer it to a client should be US$50,000, under non-exclusive NDA and with all your rights reserved. And that would be utter peanuts for this kind of thing.

    You might like to consider the lengths to which companies go in search of valuable advice or ideas, in the form of hiring consultancies or even industrial espionage. Useful information is not cheap, so don't undersell your own.
  • Just Modify It! (Score:4, Insightful)

    by Fringe ( 6096 ) on Friday August 25, 2006 @12:00AM (#15975937)
    I've seen such contracts frequently. In every case, I simply rule-out (scratch through) those lines. And sign the resulting contract. I have NEVER had it become an issue or come back for negotiation; it has always been accepted.

    You'll never know until you try.
    • by Anonymous Coward
      IANAL, but if you strike out paragraphs from a contract without the other side knowing from it (ie. if it was already signed previously by the other side), you simply invalidate the contract or worse.

      I think you at least need a signature from the other party on the contract to indicate they have witnessed the changes to it.
      • um, if they accept it and pay you, does it matter if it's valid or not? If it's not valid then they can't take you to court for breach of contract. If they accept it and pay you it's pretty much a sign that they're happy with it.

         
    • IANAL but I've done this too. If you must make any change like this to a contract, both
      parties should sign the changes, but as a minimum, make sure you:
      (a) Initial, or sign, your changes
      (b) Keep a 'photocopy

      Otherwise, how are you going to demonstrate what you changed?

  • by HangingChad ( 677530 ) on Friday August 25, 2006 @12:02AM (#15975942) Homepage

    No other company is going to sign something that one-sided. Where are they going to find staff? It's not going to end until NDA's and assorted silliness get to the point no one wants the job. I have slid piles of paper like that back at customers and said we're either going to trust each other or we're not doing business. Surprisingly effective, but not 100%. If they're that stupid about their paperwork, how are they going to be smart about development? YMMV but I've never seen a contract worth having that had that much paperwork involved.

    Drug tests are another one. One company I interviewed with, a telecom in Arkansas, wanted one and I said it was no problem if I could have access to the drug test results of everyone on the management team all the way up to the CEO. That was a head scratcher, no one had asked for that before. I responded that if they wanted to look behind my kimono, I wanted to see behind theirs. Then they had to fess up that the execs didn't get drug tested. Ha! No tickey, no washy buddy. If they didn't, I didn't. Told them to call me when the CEO decided to get tested. They went out of business a couple years later...see what happens when you don't hire me? ;)

    It's all really quite insane. I mean I'm sorry that somewhere back in the past you got burned by some former employee but I'm not paying that tab. And if you let lawyers run your life you're not someone I want to work for anyway. People leveraged to the hilt and desperate for a job may have to eat shit like that, but, fortunately, I don't.

    • Re: (Score:3, Interesting)

      The day an employer asks me for a blood test is the day they get my resignation letter*.

      And the strongest non-medicinal drugs I take is sometimes a soft-drink with caffine in it. (No tea, coffee or alcohol.)

      * Actually, I probably wouldn't let them off so easily. I'd probably refuse, and look to sue for unjustified dismisal if they fired me for it.
    • A little off-topic but the drug testing stuff really gets to me. I don't do drugs, but what the hell right is it of the company to know about what I do in my free time off the clock. They don't give employees breathalyzer tests everyday and trust me, there are a few at my company who would probably fail those if taken during the day.

  • by Anonymous Coward on Friday August 25, 2006 @12:14AM (#15975984)
    I've had to sign documents like that a couple of times. I have never had a problem in practice; my feeling is that the intent of the document is to give them a basis to fuck with you if they feel you did something bad. Since you'd generally have to do something extraordinarily bad to get a company to actually try to go after you -- there's a lot of burden of proof on them, and it would involve significant legal costs -- they probably won't ever do anything and it may not be worth worrying about.

    That said, after receiving significant doses of reality early in my career, I prefer to cover my ass when dealing with large corporations. And I agree, most of the forms I've seen are bullshit. (Some even assign all ideas you've EVER had, even before being employed, to the company. Insane.) So I have a general technique that I've adopted.

    The basic gist is that you fill out the form, but list a bunch of projects and use codenames for them. "Homer", "Olivia", "Butter", whatever. Throw in nice vague and general descriptions that cover a very broad field that you think you might ever be interested in -- "multimedia application", "browser", "engineering tool" -- and there you go. Put in a good half dozen or more. Don't worry: whatever you put on there, they'll sign it! Your manager doesn't give a crap. It's only the lawyers that want it filled out, and conveniently the lawyers aren't the ones signing off on what you put in there.

    Later on, in the unlikely event that they do decide to go after you for something you create, which I've almost never seen, it will be trivially easy to claim that this "multimedia application" was already disclosed to them as "Homer", is thus exempt from the agreement, that you therefore retain all rights, and nyah nyah nyah.

    Vagueness is a contract weasel's best friend.
  • You must be working with multiple clients even if sequentially over the course of a year. If one wants to claims something you do later is owned by them, seems like they would have to fight all your other clients for it. I'd be interested to see what an attorney would say about the multiple client issue.
  • I'm currently transfering my business and need to draw up NDAs and other contracts. I knew I needed to protect myself for transfering more than necessary but I hadn't considered this issue at all, thanks for bringing it up.
  • You then get a year to put up or shut up, but you're protected during that year.
  • by BadAnalogyGuy ( 945258 ) <BadAnalogyGuy@gmail.com> on Friday August 25, 2006 @12:31AM (#15976035)
    Dear Bender,

    Take the advice of my good friend Gary Kildall and refuse to sign anything like an NDA. Nothing good can ever come from it.

    Sincerely,

    Bill Gates III Esq.
  • This is always the approach I take. I've been an independent consultant for 4 years. Most of the consulting contracts I have handed to me have something outrageous in them. eg 3 hours termination notice for a 12 month contract. They just try it on.

    Never ever fall for the line "It's just a standard contract". There's no such thing. Make sure you have a lawyer to help you, but the vast majority of the time you can generally just pull the silly stuff out and the client won't put up a fight.
  • Start your own shell corporation. License all your inventions prior to date X to this shell corporation. Sign an NDA with the shell corporation saying that you will not disclose these ideas to another client. Write on any new contract that your prior ideas and inventions are already owned and under NDA by a prior client, so cannot be disclosed, just as your current contractor would not want their trade-secrets invented by you exposed to your future clients.

    But IANAL. Would this work?

    • Re: (Score:3, Informative)

      by vodhner ( 525801 )
      While laid off from my software development job in 2001 and 2002, I saw two really excellent NDAs.

      The one for my "night job" acknowledged that, like every programmer, I probably have a portfolio of commonplace utility routines that I will carry away from the job as long as it is not specific to the application being developed.

      My full time employer's NDA allowed me to do any unrelated work, as long as it was not for a competitor and not directly applicable to the employer's field. I did in fact continue the
    • This is just a way of saying "NO" but being able to shift the blame to someone else.

      Trouble is, if the client doesn't like it, you've shot yourself in the foot. "ummm...yeah..I do really need to eat so just...ahhh.. forget what I said about that other corporation...cos I really need this gig!".

      If you want to say NO just stand up and say it.

  • First off,I have a really short NDA/agreement that basically says that we will trust each other, make reasonable efforts to protect each other's IP, etc. I offer customers a 12.5% discount if they just go with my agreement.

    For other customers, I remove any contract clauses that don't seem right to me.

    One thing that "raises a red flag" about potential customers is if they just send me signed contracts for my signature without bothering to email me a copy of the agreement first to read over. This rarely happe
  • You're a businessman. So act like one.

    1) Discuss the matter with your lawyer. You DO have a lawyer, don't you?

    2) Negotiate. Strike out clauses you don't like. Add in ones you want. You are the equal of the guy on the other side of the contract. Don't let him bully you.

    3) Walk away from bad deals. Always. You don't need to take every job that comes your way. If the job is nice but the contract isn't, highball them to make up for it.

    4) The ideas in your head are none of their concern. Protect them with ample
  • by yppiz ( 574466 ) on Friday August 25, 2006 @01:42AM (#15976222) Homepage
    A "prior inventions" list is normally just a list of invention titles and a brief description of what the invention does. For example: "Invention: A method for exercising rodents via a wheel constructed from rigid wires. Description: The device is in the shape of a wheel. The rodent climbs inside the wheel and runs, spinning the wheel."

    When signing a legal document, it's important to know why the company wants you to sign it. In this case, it's not so that they can take all the inventions you've thought of. Instead, it's to limit their liability to you. What they are trying to protect against is the scenario where you work for them on a contract, and without their knowledge, embed one of your prior inventions into their product, and four years later, when they've become the next Google, you step up and ask for a massive amount of money because they are infringing on something that you wound up patenting.

    With that in mind, I suggest that this one isn't worth fighting over. The best way to deal with it is to list everything you've ever thought of, and let their lawyer decide whether he really wants to spend hours going over each one with you. In the end, the lawyer will probably decide that it's not worth while to do so, and you can get on with your work.

    --Pat
    • Thank you. Easily the most insightful comment on a thread which is generally just demonstrating how clueless the average slashdotter is about IP.
  • Make a project on sourceforge called, say, Gramoetric and then just say "All of the code, past present and futere under the Gravometric project."

    Done.
  • Similar situation... (Score:4, Interesting)

    by cardpuncher ( 713057 ) on Friday August 25, 2006 @02:12AM (#15976292)
    I've been in a similar situation. I'd done some development work for a public (but non-government) body without any such NDA stipulations; the body was then taken over by a government agency which then tried to impose these kind of conditions retrospectively to complete the small remaining part of the work. As soon as I consulted a lawyer they freaked out because their procedures didn't allow for anyone to question their standard terms and conditions, even when they had not applied at the start of the contract.

    They certainly had no intention of negotiating and ultimately attempted to redevelop the entire system for themselves (3 people for 2 years) before deciding that it wasn't the job of a government agency to be a software house and so scrapped their development effort. They then went out to buy a different package from a 3rd party over which they could assert no rights as it was entirely developed prior to their purchase of it. As I write they'are at least a year behind in the rollout of this new package.

    So don't underestimate the stupidity of your potential clients. They may well be prepared to spend vast sums of time & money and have no ultimate stake in the IPR of their solution provided that they can demonstrate they have stuck to the standard terms and conditions their lawyers worked dilligently to produce.

    From my point of view, the fact they walked away was a good deal in the short term: I got more revenue from supporting the original system than I ever expected to get out of the project simply because they couldn't afford to be without it while they figured out how to get rid of me. Bad news in the long term, though, because this is a part of the world where most work is government-funded in one way or another and you mysteriously stop being asked to tender for work if you seem to be "difficult".

    How much of a business are you likely to have if you make it a policy not to accept contract of this kind? If you've plenty of other work, then fine; if not, it comes down to your need to feed versus your self-esteem.

    One of the things too few people allow for in their business plan is the "fuck you" factor. Businesses tend to be highly geared to secure growth and it can be difficult to walk away from potential clients because you need the money to service your borrowing and pay for your staff. I've always made sure there was a reserve account to make it easier to say "no" now and again. However, there's always some stuff you just have to swallow if you want an income: having a business is worse than being employed in that respect because at least an employee has rights...
  • Usually that sort of thing is kind of like a pre-nup. They are trying to make clear what each side had before getting together. The assumption is that they will have lots and you'll have almost nothing, so consequently you list all your stuff and assume anything else is theirs. Should there be any "trouble" in the "marriage" it makes clear who had what.

    I've signed something like that 4 times in the last 3 years. I write something like the following in that space:

    A large body of works identified as

  • All you get is pseudo informed opinions, guesswork and annecdotal "evidence". Ask you legal council, if you don't have one, find one, If this is the type of thing you are dealing with, hire a specialist. Get one you trust and can talk to.

  • by drphil ( 320469 ) on Friday August 25, 2006 @04:18AM (#15976587)
    Of course no one here knows the specifics of your case, but this type of clause is in place not to steal your inventions, but to protect both parties.

    The company's side: They pay you to help them develop a widgit or process that the company hopes to commercialize. During the process of your helping some valuable intellectual property is developed. Hopefully before the relationship you both decided who "owns" that property and how the company will get to use it - either by taking ownership from you or by getting a license from you for a reasonable cost. Now, what the company doesn't want to happen is to get that far and then have you pull dominating prior Invention #2 from your ass that you've kept hidden from them that prevents the company from practicing the art you've developed with them. This will gum up the whole commercialization process. - this happens a lot and several companies have been burned by it. Thus the company wants you to document related art up front so that the company can take into account that they'll have to negotiate the license of dominating prior Invention #2 in the work contract.

    Your side: You have lots of stuff running around in your head or in progress, but it's not protected by a patent or copyright or whatever. You are now entering a relationship with a company that could use those ideas, but are paying you for something else, i.e., the *field* of the NDA does not cover the field of these ideas. If you never disclose these other ideas, there's no issue. But if you do disclose them - they aren't covered by the NDA and you could be screwed. However, if those ideas are specifically stated in the NDA, even if they are outside the field, then you'll be OK as identifying them as covered - the ideas will still be "yours".

    The term of the NDA can be longer than 1 yr. That's negotiable. There's also usually two terms - one term during which you both can disclose info (if it's a two-way)- this usually is 1yr with some renewing mechanism. But there's a second term that is the length of time both of you need to hold the information secret - which is usually 5 yrs, sometimes as long as 10 yrs. The company cannot "steal" your ideas after the term. If you disclosed these ideas to the company *properly* you have now forever "poisoned" the company with respect to that idea. Proper disclosure should be explicitely defined in the NDA but usually means in writing on paper (not electronically) with CONFIDENTIAL written on the page and you keeping a copy. If the company tries to patent it without including you, you can go after them. However if you never patent the idea in a reasonable period, the company can, of course practice it - but they can't ever get a patent on it to exclude others without you being named as an (or the only) inventor. I work in R&D in a big company and we are paranoid at getting poisened in this fashion. It's one of the risks that needs to be managed before entering a relationship with smart people like you who can often greatly shorten development time. Of course, if the NDA is two-way the company can "poison" you in the same way - although this is rare since companies don't like disclosing anything outside of the NDA's field.

    Disclosure through an NDA does not start the clock ticking for getting a patent - it's a private disclosure, not a public disclosure. However, you do have the risk that the company will publically disclose the idea - they've violated the NDA and can be sued, but you will now not get a patent unless you apply within a year.

    In the end, the NDA is just a piece of paper - a good working relationship requires trust on both sides. If you feel the company is going to screw you, don't work with them. If the big company thinks you won't hold their disclosed IP confidential, or will not be upfront in disclosing potentially blocking ideas or art, they won't work with you.
  • Walk.

    I know those clauses. The "we own everything you've ever done unless you list it" ones. I'm in the unfortunate situation where it is completely impossible for me to list everything I've ever worked on, so I'm pretty much forced to decline such contracts. As such, I've never signed one.

    Personally, such things make me furious. Furious that such an absurd "protection" is becoming boilerplate, and furious that some people sign them without thinking how it will affect them in the future.

    Think about it. Do y
  • I signed on with a company to do in the operating room what I usually do in the lab -- monitor and analyze nerve signals in the body and brain. They wanted me to sign such a clause. I told them that as a scientist I had ideas in all stages of development, from ready to patent to pie-in-the-sky the-technology-doesn't-exist-yet. I also told them that some of my work involved other people, and was on going, and that some of those people had ideas or parts thereof. There was no way as a working, collaborating s
  • Every time I've ever been asked to make a list of my prior inventions I've written down something like "System and Method of Manipulating Data" figuring that in the extremely unlikely event the issue both came to litigation and the ridicululous document were enforced, my last resort would be to claim that I had in fact declared whatever invention it was beforehand. The one advantage that you have is that just as the average person just signs it without understanding, the average company who makes people sig
  • Real NDA's which is a BIG standard practice prevent you from talking about work for other contractors. If you are legally obligated you can't contract with companies requiring disclosure. If other fouls are signing that's their problem. Your a foul if you sign.

    Translation, life isn't easy. It's part of your work to find reasonable customers.
  • These NDAs, uncompensated non-competes, and overly-broad created-works clauses are a big concern to me.

    To me they boil down to:

    "Tell us everything you are working on so we can take it if we want"
    "We can control your work even after you leave our company and we are not going to pay you for it."
    "Anything you think of or build belongs to us"

    Last I checked I was a free American, not a slave. I would rather work for myself and be poor that have to deal with that crap.
  • by szembek ( 948327 )
    Find: NDA Replace: Non-disclosure agreement Find and Replace Complete. It seems that the only posts I make lately are the ones bitching about misuse of acronyms. They should be defined at least once at the beginning of the summary before using them. This is common sense, please abide by it.
  • by JumperCable ( 673155 ) on Friday August 25, 2006 @10:12AM (#15978461)
    Yes. List every recipe you have ever created. Have any funky dance moves? Put them in there too. Strummed some funky tunes on your guitar? Throw them in. Crap flood the document so they can't find anything of value.

In every hierarchy the cream rises until it sours. -- Dr. Laurence J. Peter

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