Corante

AUTHORS

Donna Wentworth
( Archive | Home | Technorati Profile)

Ernest Miller
( Archive | Home )

Elizabeth Rader
( Archive | Home )

Jason Schultz
( Archive | Home )

Wendy Seltzer
( Archive | Home | Technorati Profile )

Aaron Swartz
( Archive | Home )

Alan Wexelblat
( Archive | Home )

About this weblog
Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

What Does "Copyfight" Mean?

Copyfight, the Solo Years: April 2002-March 2004

COPYFIGHTERS
a Typical Joe
Academic Copyright
Jack Balkin
John Perry Barlow
Benlog
beSpacific
bIPlog
Blogaritaville
Blogbook IP
BoingBoing
David Bollier
James Boyle
Robert Boynton
Brad Ideas
Ren Bucholz
Cabalamat: Digital Rights
Cinema Minima
CoCo
Commons-blog
Consensus @ Lawyerpoint
Copyfighter's Musings
Copyfutures
Copyright Readings
Copyrighteous
CopyrightWatch Canada
Susan Crawford
Walt Crawford
Creative Commons
Cruelty to Analog
Culture Cat
Deep Links
Derivative Work
Detritus
Julian Dibbell
DigitalConsumer
Digital Copyright Canada
Displacement of Concepts
Downhill Battle
DTM:<|
Electrolite
Exploded Library
Bret Fausett
Edward Felten - Freedom to Tinker
Edward Felten - Dashlog
Frank Field
Seth Finkelstein
Brian Flemming
Frankston, Reed
Free Culture
Free Range Librarian
Michael Froomkin
Michael Geist
Michael Geist's BNA News
Dan Gillmor
Mike Godwin
Joe Gratz
GrepLaw
James Grimmelmann
GrokLaw
Groklaw News
Matt Haughey
Erik J. Heels
ICANNWatch.org
Illegal-art.org
Induce Act blog
Inter Alia
IP & Social Justice
IPac blog
IPTAblog
Joi Ito
Jon Johansen
JD Lasica
LawMeme.org
Legal Theory Blog
Lenz Blog
Larry Lessig
Jessica Litman
James Love
Alex Macgillivray
Madisonian Theory
Maison Bisson
Kevin Marks
Tim Marman
Matt Rolls a Hoover
miniLinks
Mary Minow
Declan McCullagh
Eben Moglen
Dan Moniz
Napsterization
Nerdlaw
NQB
Danny O'Brien
Open Access
Open Codex
John Palfrey
Chris Palmer
Promote the Progress
PK News
PVR Blog
Eric Raymond
Joseph Reagle
Recording Industry vs. the People
Lisa Rein
Thomas Roessler
Seth Schoen
Doc Searls
Seb's Open Research
Shifted Librarian
Doug Simpson
Slapnose
Slashdot.org
Stay Free! Daily
Sarah Stirland
Swarthmore Coalition
Tech Law Advisor
Technology Liberation Front
Teleread
Siva Vaidhyanathan
Vertical Hold
Kim Weatherall
Weblogg-ed
David Weinberger
Matthew Yglesias

LINKABLE + THINKABLE
AKMA
Timothy Armstrong
Bag and Baggage
Charles Bailey
Beltway Blogroll
Between Lawyers
Blawg Channel
bk
Chief Blogging Officer
Drew Clark
Chris Cohen
Crawlspace
Crooked Timber
Daily Whirl
Dead Parrots Society
Delaware Law Office
J. Bradford DeLong
Betsy Devine
Dispositive
Ben Edelman
EEJD
Ernie the Attorney
FedLawyerGuy
Foreword
How Appealing
Industry Standard
IP Democracy
IPnewsblog
IP Watch
Dennis Kennedy
Rick Klau
Wendy Koslow
Kuro5hin.org
Elizabeth L. Lawley
Jerry Lawson
Legal Reader
Likelihood of Confusion
Chris Locke
Derek Lowe
Misbehaving
MIT Tech Review
NewsGrist
OtherMag
Paper Chase
Frank Paynter
PHOSITA
Scott Rosenberg
Scrivener's Error
Jeneane Sessum
Silent Lucidity
Smart Mobs
Trademark Blog
Eugene Volokh
Kevin Werbach

ORGANIZATIONS
ARL
Berkman @ Harvard
CDT
Chilling Effects
CIS @ Stanford
CPSR
Copyright Reform
Creative Commons
DigitalConsumer.org
DFC
EFF
EPIC
FIPR
FCC
FEPP
FSF
Global Internet Proj.
ICANN
IETF
ILPF
Info Commons
IP Justice
ISP @ Yale
NY for Fair Use
Open Content
PFF
Public Knowledge
Shidler Center @ UW
Tech Center @ GMU
U. Maine Tech Law Center
US Copyright Office
US Dept. of Justice
US Patent Office
W3C


In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

Copyfight

« On Microsoft's "Position" vis-a-vis Hollywood | Main | Cross-Platform Media Player Will Support Microsoft Multicast Media Streaming »

August 31, 2005

Your Employee IP Agreement May Become a Non-Compete

Email This Entry

Posted by Alan Wexelblat

Most of us, particularly in the high tech biz, sign agreements regarding intellectual property with our employers. Simple versions of these agreements state that whatever the employee develops that is related to the company's business is assumed to be company IP. More restrictive agreements may lay claim to anything developed on company time or equipment. Since this includes email discussions, such a clause can be far-reaching.

Now, according to Ed Frauenheim on CNET, Microsoft is advancing a theory in its fight with Google over Kai-Fu Lee that could give these IP agreements - even lenient ones - the force of non-compete agreements. The argument, which MSFT didn't invent but is using, is called "inevitable disclosure." The basic idea is that you can't avoid spilling some of what you know in your job, and that's going to mean that IP you agreed was the property of a former employer gets illegally transferred to the new employer. If you accept the argument that this is inevitable then you may also find yourself accepting the argument that the employee should not be allowed to work for the competitor because doing so would always result in impermissable IP transfer. Thus, the IP agreement becomes a non-compete.

In the high-tech business - which is rife with job-hopping, IP agreements, and a rapidly changing competitive landscape - this doctrine could be dangerous if it became widely accepted. The CNET story reports that California courts have rejected the doctrine but that it has been "upheld" in Federal court.

CA's rejection came in Schlage Lock Company v. Whyte and according to that Findlaw article, the relevant Federal case is PepsiCo., Inc. v. Redmond (7th Cir. 1995). In the PepsicCo case, the allegation was upheld that Mr. Redmond had access to relevant competitive trade secrets; in the Google case, Mr. Lee is claiming that he didn't have access to MSFT's search secrets. He and Google may prevail on those grounds; however, prevailing at trial is a far cry from not getting sued in the first place, which is how things ought to be, absent specific evidence of wrongdoing.

Comments (5) + TrackBacks (0) | Category: Laws and Regulations


COMMENTS

1. SFix on August 31, 2005 1:09 PM writes...

Using the theory of "inevitable disclosure" doesn't make worker's IP contracts into non-compete agreements, it makes their IP contracts into "never work again in your life for anyone" agreements.

Since IP contracts are not just about trades secrets and because IP is supposed to have value on its own and not just to competitors, "inevitable disclosure" is an extremely broad brush which can't distinguish between disclosure to a competitor and disclosure to a non-competitor.

We need a federal right to work law that prohibits non-compete agreements for employees who make less than $500,000 per year.

Permalink to Comment

2. KirbyMeister on September 2, 2005 1:03 PM writes...

Why TF do we have trade secrets in the first place? It's just an excuse to allow companies have all the rights of a patent without having to disclose or relinquish rights on whatever they are guarding.

Permalink to Comment

3. Brad Hutchings on September 3, 2005 4:13 PM writes...

I would anyone who is asked to sign a non-compete or an IP agreement as part of employment to consult with a lawyer before signing the agreement. In California, for example, for a non-compete to be binding, the employer has to offer something in exchange. ESOPs and health insurance don't count either ;-). On top of that, if you're fired or treated differently for asking that you have time to discuss these documents with an employment attorney, you have a slam-dunk claim. But these documents are mostly intimidation documents. Actually trying to enforce is quite costly for an employer, so they must really have something to protect or must really be pissed off. The lawyers and officers and relevant managers of a company know full well the limitations of scope of these agreements, have been on both sides of the argument, and use them simply to intimidate.

The advice I give my friends now who are faced with these documents but don't want to rock any boats or get off on the wrong foot (the key to this intimidation play, BTW) is simply to tell the HR person that the company has devoted legal resources to crafting these documents, and so s/he needs time to get legal advice to understand them. And to be careful about accepting signing bonuses as compensation for signing a non-compete. Also, careful about valuing the non-compete. If the term is 1 year post-employment, and your interest/skill set is very specialized, the value of that 1 year on the sidelines quickly approaches 1 years salary, which is 5x - 10x what anyone will offer as a signing bonus!! Employee beware!!

Permalink to Comment

4. Nate L on September 5, 2005 8:28 AM writes...

My thoughts: I have had in the past 8 years two job offers from a Big Washington State software company. (Guess who?) Part of my possible agreement was that I did not work in the job field (software/harware) for 10 years after I left the company. Both times I needed a job bad. They wanted to to fill a software analyst position. They would not change any part of the agreement. Both times I turned them down. They were very suprised both times. I will not sign my life away.

Permalink to Comment

5. John Annate on September 6, 2005 3:00 PM writes...

This is very dependent upon the country you are in - it's not just what's in the contract, but also the national laws which determine these rights. You can check this out further at www.PatentlyProtected.com for example on their online IP tutor, or in the IP Guide, E.g. www.patentlyprotected.com/tutor.html

Regards,

John

Permalink to Comment


EMAIL THIS ENTRY TO A FRIEND

Email this entry to:

Your email address:

Message (optional):




RELATED ENTRIES
Congress Restores Bulk Unlock Rights
When is a Game a Clone?
Subscription Services for Books
Lest You Had Any Doubts, the ALA is on the Right Side Again
Deadly Effects of Unaffordable Medicines (TPP)
Planet Money on the Case Against Patents
FMC + Musicians vs FCC on Net Neutrality
Be the Potato Salad