Invention Agreement for Contract Company 1

[Mechie10]

I've decided to take on some engineering contract work for a large company and I'd like to get some input on their Invention Agreement for Contractors. It looks like they are
claiming rights to ALL inventions I create, not just those related to their business. Below is the paragraph that contains the problem clause between the two underscores____:


I hereby agree to assign to the Company any rights, title or interest in all Inventions, whether or registrable, patenable, coyrigthable, subject to any form of protection, made, created developed, written or conceived by me
(solely or jointly) in whole or in part during the course of my consulting association with the Company that are related to or useful in the actual or anticipated business of the Company, or result from task assigned me by the
Company or result from use of premises or equipment owned, lease or contracted from by the Company. _____I further agree that all Inventions created during the course of my consulting association with the Company shall be the sole property of the Company and its assigns, and the Company
and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith._____ I further agree to assist the Company in ever proper way (but at Company expense) to obtain and from time to time
enforce patents copyrights or other rights on said Inventions in any and all countries, and to that end I will execute all documents necessary:


Thoughts? Should I ask to have this sentence removed from the agreement?

 

[GregLocock]

I have usually crossed that one out. It's pretty standard.

Cheers

Greg Locock

 

[zdas04]

It's a contract, freely entered by both parties for due consideration. If you can't "freely enter" it or don't feel the consideration is adequate, then cross it out. If the company won't go along with that, then take a pass on the work.

My experience has been that every company has boilerplate language that comes from the "I win, you bleed" school of negotitation. When I change it, some people get tense, but in the end the lawyers have always been willing to move more towards the center. Bottom line has always been that if I can't make myself see a way for MuleShoe Engineering to at least stay whole in a deal then I don't sign it.

David Simpson, PE
MuleShoe Engineering

http://www.muleshoe-eng.com

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

The Plural of "anecdote" is not "data"

 

[jmw]

I think you need to state where you are working.

I assume this is the US where such terms are common in any employment contract. I also assume that the likelyhood of your inventing something value is good, possibly you have a history of such inventions. Maybe this is a reason for the contract.

Any such history should open the door to negotiation: for example, to restrict the application of the terms to inventions derived from confidential information within the company etc. but to exclude any invention based on public domain information; to agree in advance the terms under which any such invention will be owned etc. Or to negotiate more favourable or more specific terms.

In the UK the 1977 Patents act means that you cannot sign your rights away under such terms, not even if no-one is threatening you or have you under duress (Sign here or forget about the job!)

Many US companies with UK subsidiaries attempt to impose this clause in UK contracts but it has no validity in law. Usually it is modified to require disclosure of any and all inventions. This at least gives them the option of first negotiating rights.

This worked well for me in the UK except, well except that NIHism took over (not invented here).
Some managements seem surprised that no matter how much cash they throw at R&D they can't guarantee inventiveness, just refinements, they resent the idea that someone outside of R&D has invented something and that they would have to pay an equitable fee for manufacturing rights.

They would rather spend far more money trying to find a way round the patent or do without the innvention. The stock answers i received were "It will take 5 years to put inot production" and "not core product". Debatable.

Incidentally, you don't need patent protection in these circumstances, a confidentiality agreement works fine a it is not entering the public domain.

There is an exception to the protection of the 1977 act; the interpretaion of the act depends on prior case law. Engineers employed in R&D or specifically employed to "invent" are usually only entitled to have their names on the patent and to receive a nominal fee from the company (enough for a round of drinks, usually).

In the US this is a helpful site:

http://www.patentstuff.com/patentlinks.htm

In the UK:

http://www.intellectual-property.gov.uk/

Couldn't say for other countries.

Of course, once you are outside the area of patentable ideas most companies have a very poor record of encouraging employees to share ideas. Very few companies have a suggestions scheme and even fewer have one that is no more than an attempt to gain extra benefit from their employees for no return. Not unaturally most employees keep their ideas to themselves. Sad.

JMW

http://www.viscoanalyser.com

Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

 

[BJC]

Cross that section out, initial and date the crossed out area and have the company HR rep initial and date it it as well. Keep a copy.

 

[Mechie10]

Thanks for all the input everyone. Just for clarification on this clause: Is it meant to cover all inventions only while I am directly assigning my time to do the companies work or all of my time?

They have defined Consulting Association as "As used herein, the period of my consulting association includes any time in which I may be retained by the Company on behalf of the Contractor." An also, " For the purposes of this Agreement 'during the course of my consulting association with the Company' shall commence on the first day of my consulting association with the Company and shall include, without limitation, all time spent, i) in the course of my consulting association, whether during or after the regular business hours, ii) relating to the actual or anticipated business or research or development of the Company, or (iii) with the use of Company's time,material private or proprietary information or facilities"

To my way of thinking it means only when I am working directly for the company and being paid. However, I don't know if there is a legal definintion for retained that would change this or something I am missing.

BTW, I am in New Jersey, USA.

 

[jmw]

If you live and work in a country where this is an enforcable clause your options are:
[ul square][li]accept it. You will see this in a lot of contracts.[/li]
[li]Negotitate a royalties clause[/li]
[li]strike it out as discussed above... if this is a standard clause, they may not be that bothered. Ask them, in all the years they have had the clause, how many employees walked up and handed them a fortune for no return?
In all probability this clause is there because it is in every employee contract and not because they need it.[/li]
[li]agitate for the law to be changed. It happens.In the twilight zone, but sometimes for real[/li]
[li] go work in a country where this isn't enforcable[/li]
[li]start up as a self employed inventor and watch the patent lawyers take 50% (if you are in the USA) or a flat fee if you aint! but also, see just how rich you will get inventing things. It's like anything else, for the one or two that make it, thousands don't. Again, the question asked before is: "Do you regularly invent stuff?" If not, don't sweat it.[/li]
[li] Invent something and keep quite. That way you get your own back on them... but you lose out as well.[/li][/ul square]

The world is a tough place.
It isn't fair and never will be.

But, you'd better figure out what this clause really means. Then you can negotiate a better deal.
It can't be that they really expect an employee to surrender his own ideas to the company so they can get rich and give him nothing. I would bet there isn't a single example of this happening in the last 200 years. OK, so Frank Whittle had his jet engine idea nicked by the government, for reasons of national importance, but in private industry?

What companies worry about is that while you work for them, for whatever reason, you are inspired to invent something that could be of value to them and, more importantly, to their competitors. They know that if you leave them you will most likely end up in a similar job, and at some work for a competitor. It can get real messy i you leave them and invent something that a competitor gets to produce. With this clause they can claim you invenmted while with them but with-held the idea for a deal with a competitor. Who can prove what? This is a spoiling tactic for the most part.

If this an important clause to them then negotiate. But if it were important to them they'd have a far more imaginative clause in there.

So propose an alternative clause, one where if you invent something, you are guaranteeed royalties or the right to take it elsewhere if they don't want it. You can propose a disclosure clause that says you will tell them of anything you invent.




JMW

http://www.viscoanalyser.com

Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

 

[ProEDesigner00]

Gentlemen and Ladies if there are any here interested.

16 mths ago from the economy going south in Michigan and especially in the aerospace industry where I was a mechanical design contractor, I become laid off. For 15 yrs now I have been trying to stumble into my own business. It has somewhat worked, however in this econmic bump I had to go back into the contracting world for an interum jump in my personal income. I took a position with a very large construction equipment manufacturer. They too had a simular clause. However they had an exemptions paper to fill out. I filled in my areas of interest some of which was a conflict of interest. They called me in for questioning and to get an understanding of current "works of art" I was dealing with and we come to a satisfactory agreement as to what I am bound too. They in a sense rewrote that paragraph to more closely reflect their intentions with me.

hope this helps

Norb.

 

[HaroldW]

Perhaps this website would be of some interest to some :

http://www.nolo.com/lawcenter/ency/index.cfm/catID/EC0EEB1C-16EA-4F81-833ED5890B19383A

Hope this helps too in some indirect way.

Harold.

 

[subvanpatent]

Having crossed the great divide between engineering and law (I don't know what that means but it is a good starting setence for something)

I still have a couple months of law school left and one thing I have learned is that it is as illegal to practice law without a license as it is to practice medicine (unfortunately engineers are not required to be licensed).

The only legal advice I am allowed to give is talk to an attorney if you are concerned with the wording of the contract.

James M. Van Buskirk, P.E.