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This is an extract from a software developer Intellectual Property Agreement:

“Intellectual Property Rights”: patents, rights to Inventions, utility models, copyright and neighboring and related rights, trademarks, trade names and domain names, rights in get-up, goodwill and the right to sue for passing off, unfair competition rights, rights in designs, rights in computer software, software application development rights, database rights, topography rights, rights to use and preserve the confidentiality of information (including know-how and trade secrets) and any other intellectual property rights, in each case whether registered or unregistered and including all applications (or rights to apply) for and be granted, renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.

“Invention”: any invention, idea, discovery, development, improvement or innovation, whether or not patentable or capable of registration, and whether or not recorded in any medium.

...
...
...
Further, and in the alternative, all Employment IPRs and Employment Inventions Intellectual Property Rights insofar as they are capable of prospective assignment, are hereby assigned by the Employee to the Branch. To the extent that any such Intellectual Property rights cannot be prospectively assigned, Employee undertake to assign all such Intellectual Property Rights as and when they are created or promptly thereafter.

The worrying part is marked in bold and italic format in the above, plus the last 2 quotes from below (also marked in bold and italic format)

Does this mean that if the employee leaves the company, and then creates or gain an intellectual property right, does the company own that right ? Because the definition of Intellectual Property Rights states: in the future

Note that before the above extract comes the definition of Employment IPRs and Employment Inventions, which are not worrying because they restrict the rights to the ones created during the course of his employment

“Employment Inventions”: any Invention which is made wholly or partially by the Employee at any time during the course of his employment with the company (whether or not during working hours or using Branch premises or resources, whether or not recorded in material form, and which relate in any way whatsoever, directly or indirectly and/or is developed for the benefit of the Branch or Branch’s clients or business prospects).

“Employment IPRs”: Intellectual Property Rights created by the Employee in the course of his or her employment with the company

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Does this mean that if the employee leaves the company, and then creates or gain an intellectual property right, does the company own that right ?

No. The reference to "the future" pertains only to the IPRs of inventions that ensued in the course of his employment.

Even if the employer alleged that the clause also encompasses post-employment creations and/or post-employment acquisitions of IPR, such extension would be unconscionable (and therefore null and void).

  • Can you explain why "The reference to "the future" pertains only to the IPRs of inventions that ensued in the course of his employment" ? – EEAH Nov 9 '20 at 10:24
  • The question was also updated, and 2 quotes (the last 2 quotes) are also questionable – EEAH Nov 9 '20 at 10:44
  • @EEAH "Can you explain why". Because the contract repeatedly refers to "during" or "in the course of his employment with the company". Your premise that "the employee leaves the company" implies that "his employment with the company" has ended. The excerpts you added do not change whatsoever the substance of this answer. In fact, they reinforce it because they reiterate the terms you initially posted. – Iñaki Viggers Nov 9 '20 at 12:43
  • Ok thank you. In addition can you please review the last 2 quotes specially the last one ? It's not logical that the company appoints itself as the attorney if a disagreement happens about the ownership of an IPR. Is this normal practice ? – EEAH Nov 9 '20 at 17:33
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    @EEAH The issue of "appoint Branch as attorney" seems mostly with respect to third parties. Even if it were applied to a controversy between the company and you, the fact that you "appoint the Branch" does not entitle the Branch to breach the fiduciary duty it would owe you in its sort of "attorney capacity". "Is this normal practice ?" Perhaps. But you should never make a contract decision based merely on whether a type of clause is common practice. Instead, your main (or maybe only) criterion should always be whether the contract satisfies your interests. – Iñaki Viggers Nov 9 '20 at 19:09
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Let’s look at the agrement itself logically. You are concerned about this section:

Further, and in the alternative, all Employment IPRs and Employment Inventions Intellectual Property Rights insofar as they are capable of prospective assignment, are hereby assigned by the Employee to the Branch. To the extent that any such Intellectual Property rights cannot be prospectively assigned, Employee undertake to assign all such Intellectual Property Rights as and when they are created or promptly thereafter.

This section refers only to Intellectual Property Rights that either relate to Employment Inventions or are Employment IPRs.

Employment Inventions are limited to those:

made wholly or partially by the Employee at any time during the course of his employment with the company

Employment IPRs are limited to those:

created by the Employee in the course of his or her employment with the company

It doesn’t matter how general the definition of Intellectual Property Rights is; if something doesn’t meet the conditions in the second or third quotes, then it is irrelevant to the first quote.

Turning to your main question:

Does this mean that if the employee leaves the company, and then creates or gain an intellectual property right, does the company own that right ?

It would seem that the answer is “only if it relates to an Invention made while the employee was still with the company”.

For example, if you invent something while working for the company, then leave the company, then register a patent on that invention, then it seems like you would have to give that patent to the company.

To give specific answers about this, as well as Iñaki Viggers’s suggestion that this and other extensions to future creations/acquisitions of IPRs are unconscionable, I think we would need to see the rest of the agreement and know which jurisdiction you are in (the question lacks a jurisdiction tag).

  • "It would seem that the answer is “only if it relates to an Invention made while the employee was still with the company”." In the software development job, everything relates in some way. Ex: if the employee creates a blog for the company, then after he quits the job, he creates a blog on his personal website, he "practiced" the know-how right he gained while working at the company. – EEAH Nov 9 '20 at 10:26
  • Also for ex: if the employee adds a messaging feature to the company's website, quits the jeb then creates his own messaging app like whatsapp and It gained popularity. Can the company reach-out and gain rights from that app ? – EEAH Nov 9 '20 at 10:38
  • The question was also updated, and 2 quotes (the last 2 quotes) are also questionable – EEAH Nov 9 '20 at 10:44
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    @EEAH You may be under the misapprehension that I know what I am talking about. :) I am good at analysing technical writing logically, and no other answers did so, so that is what I have done here. I have read a bit about employment law, but not enough to answer the kinds of questions you have here, beyond what I already wrote. (First impression: The last 2 quotes are indeed questionable, assuming your jurisdiction is similar to mine. But there is a difference between “questionable” and “would give me a win in court”.) – Brian Drake Nov 9 '20 at 12:52
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"Future" refers to the the rights being discussed in the clause.

I.e. We gain rights over the intellectual property you create during your course of work, whether those rights are active now or in the future.

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