Is this Intellectual Property clause over-reaching?

Question

Here's an extract from my (employee) contract

All rights to any material and results, and all intellectual property rights related thereto, made, written, designed or produced by Nathan Cooper during the term of his/her employment shall be vested in the Company. For the avoidance of doubt, the Company shall have a right to freely develop and alter such material, results and intellectual property rights and to license and assign them to a third party.

Is this over-reaching? Ie, is it all-encompassing, does it hypothetically lay claim to unrelated intellectual property produced on my own time?

More specifically. Is the "term of employment" similar to "course of employment", which I understand is limited in scope to work related duties (... I think) ?

If it is over-reaching. What would be better language? Is there something that protects non-work related IP (for me), and protects the company's IP from potential bad behavior from me. Has anyone any experience in negotiating their IP language?

Perhaps a change to "course of employment" would do the trick, or something more specific to scope the IP to work "created as part of, or in connection with his/her duties".

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NB. I'm not concerned by this language at my current employer, but I'd like to have something prepared in future that makes everyone happy.

Answer 1

That is a very broad clause, broader than the default US rule for copyright, for example. (I know the question asked about the UK, I just happen to know the US copyright rule.) It would seem on the face of it to include independent research on a subject totally unrelated to the person's employment, done off the company's premises and not during normal work hours, but while the person was an employee.. Indeed it would arguably include the copyright to a novel written off premises and during off hours.

Use of "course of employment" (instead of "term") would improve the provision. so would "as a part of his or her employment" or "closely related to the subject of his or her employment". Another possible restriction would be "Using the Company's facilities and/or equipment, or during normal working hours".

However, my experience is that an employer will have drafted whatever language it uses through its company lawyer, and will be quite unwilling to alter it in any way. A prospective employee will probably be faced with a take-it-or-leave-it choice unless that person is a nearly indispensable figure to the company.

One could send the company a certified letter saying, "When i signed the contract agreeing to {company language} I did not intend to include any developments made off company premises, not using company equipment, and unrelated to the subject or scope of my employment. I retain full rights to any such developments." Such a letter would help establish that there was no meeting of the minds to assign such non-employment-related developments or IP to the Company. How much weight it would have if the rights to such developments were the subject of a court case I am not sure.

Answer 2

English law answer:

That is a pretty badly drafted clause, at least with respect to how it would be viewed in an English court. Perhaps the clause is part of a larger section which sets out the scope of all clauses as relating to the employee's employment?

The word "term" means that any intellectual property the person has created shall vest into the company, including property unrelated to his work, during the period in which the person is employed by the company.

For example, if you were the subject of the clause, it would mean that the very words you have written as part of your question on this website is owned by the company and not yourself.

Unless there is heavy evidence to show that both parties really did intend for all intellectual property authored by the employee was in fact intended to be owned by the company, including intellectual property created outside the scope of his work, it would be extremely unlikely for an English court to enforce the above clause.

The clause ought to be "any works authored by the employee for the company" or "any works authored by the employee in the course of his employment" etc.

Answer 3

In my country - Australia - that would not be enforceable at all and would be seen as an unfair restraint of trade.

Employers would ordinarily only own what you create in the course of your employment.

Employers don't own you.

Answer 4

Overreaching? For whom, you or your employer?

I worked at a fortune 500 company and had a similar clause. Whatever I invented or created belonged to the company. The only way around this was that there was a process to have the company agree upfront that they had no interest in my creation.

So it is absolutely to protect the company's interest, not yours. The gist of course is to prevent something like you from getting control over a technology that was developed to solve some company problem, or some new technology that the company could use, by claiming that you developed the technology "on your own time, with your own resources."

So this is a case of the other Golden Rule - Him with the gold makes the rules.