Standard Disclaimer: I am not a lawyer, cannot provide legal advice, and the contents of this article may or may not apply to you. Seek your own legal counsel, preferably counsel with a law degree, before you act on any of this advice.

This is intended largely for people dealing with an intellectual property related business, but every business owner who is also employed should read it carefully. Inventors, programmers, graphic designers, should all be reading especially carefully.

Your Employer May Own Your Work

It’s very easy in the excitement of attaining employment, particularly when this is your first “real” job and the idea of negotiation is foreign, to put the ink to the paper before carefully reading your contract and digesting what it actually means. Legalese is very dull indeed, and I’m not in a position to lecture you on contracts in detail, but I would like to point out a single very important clause.

Often times when signing an employee contract for a position where you are “paid to think” or development intellectual property, there is a clause that defines the ownership of intellectual property created by you. The wording and scope vary from employer to employer. Here are just three possible scenarios in what it can say (please note what’s permitted by law and what’s not also varies by country/state):

• Your employer owns everything you create during the course of employment.
• Your employer owns everything you create while at work, using company equipment, or possibly company knowledge.
• Your employer owns everything you create related to the industry/business your employer is in.

There are many possible variations/combinations of the above and a real clause is of course written in legalese. I just want to give you an idea of what you may have signed or may need to sign. This can be really scary stuff, but if you are pro-active then you are halfway to overcoming this entrepreneurial inconvienence.

Prior Developments

Put in (possibly inaccurate) English, a prior development is something that you created before your employment. Often times your employer does not have any rights to your prior development, but how can you be sure its a prior development? Being able to date your work is very important and something you should research for your own area. One very helpful move is having a list of prior developments signed by your employer prior to beginning work. Pro-active employers have a process for this and a clause in the contract.

Developing New IP While Employed

Unless you have a lax employment contract that explicitely states you own the developments you intend to make (make sure its stated explicitly - you may be bound implicitely as an employee without knowing it), it’s wise to get a note from your employer stating that you own this development and that they have no problem with you working on it while you are employed. Do it before you write a line of code because such notes are much harder to get if your development becomes the next big thing and is worth some real money.

Non-Compete Agreements

Odds are that you are employed doing something that you are good at. If you are leverging this same skill in your business the non-compete agreement or clause in your contract may be worth taking a closer look at it. These generally are intended to prevent you from switching to a competitor or starting your own competing venture and putting everything you learned to use to compete with your employer. Generally you want to make sure your venture isn’t going to be directly stepping on the toes of your employer.

What If My Work Isn’t Worth the Effort? I’m a Small Fish!

Ultimately it’s up to you to decide whether to take or ignore this advice, and to see how it fits in with what you intend to do. Going ahead without take the necessary precautions may be tempting if you really want the job and are worried this could have a negative effect on your relationship with your boss (is this a reality or a self-created fear?). Keep in mind though that by doing so you are effectively telling yourself “this venture will never make it big”. What a terrible celing to put on your efforts before you even get started!

Are Employers Evil For Having These Restrictions?

Ultimately your employer is just trying to protect themselves. If a clause is too restrictive, it may be so simply because the company lawyer suggested it and the employer didn’t feel the need to do otherwise. This is often the case for smaller companies. However law can be a major and sometimes scary part of corporate tactics too, and that’s when ethics and dollars really begin to collide. Companies that do nothing except hold patents and launch lawsuits are an example.

To resolve an issue with a contract be sure to see your employer’s point of view. It is reasonable to expect that they would like the IP you create while they pay your bills and you use their resources to be theirs. They don’t want to be training competitors either. Work with your employer to reach an agreement beforehand that outlines your rights and your employers to your satisfaction.

Remember That Matt is Not a Lawyer

Well some Matts out there are, but I’m not. Everything in the article above I have gleaned, mangled, and misinterpreted from my own experiences, those of others I have met or read about, and from my own discussions with lawyers. Odds are I don’t even live in the same country as you, so even if my information is miraculously completely 100% true despite the lack of law degree, it probably still doesn’t apply completely to you.

Do some research on all this, consult with a lawyer, and decide how and if it applies to you.