Developers’ side projects

This is a complex topic and IANAL but I've been through some legal cases regarding this topic. The most recent ruling about employee duties came in Ransom v Customer Systems Plc in 2012 which cleared up some conflicting precedent and established ground rules.

Long story short: employees have no implicit "duty of loyalty" except for directors and fiduciaries who are responsible for reporting accurate facts (without which limited liability entities could not function). Companies can make a variety of responsibilities explicit in the employment contract but the core principal is that the employee must agree to those responsibilities when they sign up. This is why we have noncompetes/circumvents and moonlighting clauses: if it aint on paper, it aint going to hold up in court.

The big exception is the criminal code. There are a variety of things an employee can do that arent against their employment contract but could be prosecuted as fraud, creating a virtual duty of loyalty.

Lawyers are as varying as doctors, and for the same reason.

It's irreducibly complex because it involves humans.

As an engineer at a defense contractor, I recently had to go through the process of having my company waive my 100% IP ownership clause so that I could work with a startup on my own time without fear of putting them in jeopardy. It took about 3 weeks to process the paperwork, and answer a lot of questions, but eventually the paperwork was signed. It only allows me to work freely with the one startup.

However, the important issue here is the opportunity companies are missing by not offering any significant profit sharing from disclosed inventions. If I submit IP to my company and it gets patented, I get a $500 check. That's idiitic because it dissincentivises significant innovation, but it's unfortunately commonplace.

To solve the dilema, companies simply need to get their greedy heads out of their rears and offer inventors a profit share percentage such as 10%. If they don't accept, the inventor should be able to do with the invention as they please, which includes selling or licensing.

I've been a contractor and entrepreneur for many years. I do like the higher income that I can command as a contractor, but it's also a matter of principal that any work I do on my own for my own endeavors belong to me.

My current client and I have talked about going "full-time" and I've even discussed it with their legal department. The problem is they have a culture of standard employment contracts and are extremely uncomfortable with the idea of someone having a non-standard employment contract. They said it was "possible", but I'd have to list the projects to be excluded from their interests.

That precludes any opportunity to pursue any new ideas I would come up with.

That's just a flat out non-starter for me. I come up with new ideas all the time and I pursue or network those ideas all the time.

This is definitely a problem with my client and other large corporations. They understand that entrepreneurship is a growing interest of my many technical people and it has become a barrier to attracting those types of people. Something every corporation needs...people who think outside the box.

Of course the primary issue is leverage. If you need the company/paycheck and don't have enough of a background to command a change in the standard employment contract, then you have to sign away all rights. Or you can just decide to be a contractor and explicitly state (where it's necessary), that the work you're assigning rights to is in some amendment and is listed in detail. All other creations/works are yours.

Or you have a strong background with proven results and the corporation is interested in your services enough so that they will work with you on a non-standard employment contract.

I find this mindset totally disgusting, but I'm glad it's been summed up in such a concise way.

> Being an employee of a high tech company whose product is intellectual means that you have decided that you want to sell your intellectual output, and maybe that’s OK, and maybe it’s not, but it’s a free choice.

Let's clarify that phrase, "sell your intellectual output". Keep in mind that earlier in the article we discovered that "during work hours" or "related to your work" are not limits on its scope. What are the limits? The evident conclusion is that there are none. You are selling all of your intellectual output.

A situation where every idea you come up with, everything you think, every last shred of creativity is owned by someone else is one of the most profoundly dystopian things I can imagine. But this isn't a sci-fi story, this is standard business practice.

Selling all your intellectual output is selling yourself, and I think it's unconscionable. If you don't even own your own thoughts, what do you have left?