I was offered a job, but the contract concerns me I have been offered a job, but while looking over the contract I found a paragraph that concerns me. I don't want to lose the right to any software that I write or develop outside of the company that I am hired at. For example, if I make a game. Is this a valid concern? The Paragraph: &quot;Employee acknowledges and agrees that all right, title and interest of every kind and nature whatsoever, whether now known or unknown, in and to any intellectual property, including, without limitation, any inventions, patents, trademarks, trade names, copyrights, films, video tapes, scripts, software, computer/software code, formulae, creations and properties invented, created, written, developed, taped, filmed, furnished, produced or disclosed by or to Employee while employed by COMPANY shall, as between Employee and COMPANY, be and remain the sole and exclusive property of COMPANY for any and all purposes and uses whatsoever, and are by Employee’s execution hereof are assigned to COMPANY. Employee and Employee’s successors and assigns shall have no right, title or interest of any kind or nature therein or thereto, or in and to any results and proceeds therefrom. Where applicable, works of authorship created by Employee for COMPANY in performing Employee’s responsibilities hereunder shall be considered “works made for Hire” as defined in the U.S. Copyright Act. All computer/software code shall be solely stored on COMPANY’s servers (or COMPANY’s vendor’s servers) at all times and Employee shall not maintain duplicates thereof.&quot; EDIT: After reading this again out loud to myself I can see that the first half refers to COMPANY IP, and the second half refers to work performed by the employee (me) while developing FOR THE COMPANY. Meaning that code that I write at home on personally owned devices is not something covered by this statement. Can anyone confirm?
Yes, this is a valid concern As written, every piece of IP you produce while employed belongs to the employer. This includes your hypothetical game. It also includes your weekly shopping lists, your Christmas card to your Great-Aunt Nellie, the … a-hm … private video you make of you and your significant other. As written this is overly broad and probably unenforceable. However, it’s always better to have clear and legally enforceable clauses in your agreements because unclear, arguably unenforceable ones lead to disputes. To be fair, the employer has probably lifted some (bad) boilerplate and hasn’t actually thought through what it means. Get it redrafted.
How can you get in trouble? If they see any code you wrote for them show up in your open source project. They own the code you write on company time. Even if your code goes into an open source project owned by the company, you still don't own that code. The only way you can own it is if they directly tell you that you may put it into your open source project. If you make your open source project private so nobody else can see the source code, but they see your side business has the same features you wrote for them. You can try to get around problem #1 by hiding your open source project. But if they see the same features in it that they told you to write for them, they can become suspicious. They might force you to reveal the source to them in court. If you don't want them to see it, they may force you to share it with a third party who is bound by an NDA. The third party can compare your code to theirs and report if you copied any code. Even if your work is not directly related to the company products, your work for them can be a company secret. You reveal that, and you are in trouble. You say your work improves internal procedures, but is not directly related the company products. If a company can reduce its cost, it can lower its prices and still make more money than their competition. That gives them a competitive edge over other businesses. By revealing how your employer does its internal work, you give that competitive edge to their competition. Although you say your open source project does not violate rule #4 - "does not reveal company secrets" - all three explanations mentioned above say it does. What can you do? Quit and start your own company based on your open source project. If you quit, you should do it before you write any code related to your project for your employer. Ask your company to fund your project. Talk to your boss and anybody else there who might be a stakeholder. Tell them what you can do. Make a deal with them that you get to work on your project during work hours. Maybe they could turn it into an additional source of revenue for the company. That changes you from a potential loss into a valuable asset. Their competitors might end up buying products based on your code. Many companies would love for their competition to pay them. Ask your employer to allow you to turn your work into your open source project. Some companies require employees who work on open source projects to give their employers a royalty-free license to use and modify the work as they wish. Ask your employer if they would use a product based on your project. You can start a side business (with your employer's blessing), and turn them into your first customer. They get access to a beta product before their competitors do. Promise them they get it free or at a hefty discount for a year or two before the competition even knows what you have. The first option is win/lose. You win and your employer loses. The other three options are win/win. Good luck!
What would the implications be if an employee were to refuse signing an amendment and insist on what was stated in the original signed contract, even if he/she knows it's a mistake? The contract is voidable unless the employer's subsequent conduct reinforces its legitimacy. The employee's attempt to take advantage of something he knew was a mistake contravenes the covenant of good faith and fair dealing on which contracts are premised. South African contract law is not an exception to this: The law of contract underpins private enterprise in South Africa and regulates it in the interest of fair dealing. The employer can resort to records of prior communications between the parties to prove that the stated compensation was intended as yearly, not monthly. Even if those records are not available in a judicial dispute, the employee would have a hard time persuading a court that the salary that was agreed upon is 12 times --or exceeds by a factor of 12-- the market rate for a job position of similar type.
The software is "work for hire" and the copyright is owned by the client, not you. This is the default rule when copyrightable work is done on this basis in the absence of an agreement to the contrary. To not be "work for hire" you would have had to have a written agreement to the contrary or would have had to written the software before you were engaged by the client and then sold it to the client as an off the shelf finished product. [After further research I have determined that the language above is not accurate.] While you didn't have a written agreement, you did have an agreement reached without committing it to a final written form signed by both parties that is sufficient to cover all of the material terms of the contract and that is a binding and fully performed agreement. UPDATE: The "work for hire" issue is a bit more complex than I initially stated. Here is an American Bar Association summary of the issue in the independent contractor context (there is also a plausible argument that while the parties characterized you as an independent contractor for tax purposes that you were in fact of de facto temporary employee in which case it would automatically be work for hire, but I'll put that issue aside and take it at face value): Under the Copyright Act (17 U.S.C. §§ 101 et seq.), a work is a “work made for hire” only if: (1) it is prepared by an employee within the scope of his employment; or (2) it is specially ordered or commissioned from an independent contractor pursuant to a written agreement and the work falls within one of nine statutorily defined categories. . . . For works created by independent contractors, only the following types of works are eligible to be “works made for hire”: a contribution to a “collective work” (a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole); a part of a motion picture or other audiovisual work; a translation; a “supplementary work” (a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes); a “compilation” (a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship); an “instructional text” (a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities); a test; answer material for a test; or an atlas. This software is clearly specially ordered or commissioned from an independent contractor. I suspect that if you looked at the course of dealings including the client's specification of what work needed to be done (probably in part by email or in some other written form) that it would meet the requirement of a written agreement even though there wasn't a document called a contract signed by both parties. But, this still begs the question of whether it falls in one of the nine statutory categories. This American Bar Association source says that custom software doesn't qualify. The list above does not include many types of works that businesses frequently hire outside personnel to create, such as websites, logos, advertisements, photography, and custom software. For works that do fall within the defined categories, the business must have a written agreement from the author expressly stating that the work is made for hire for it to qualify as such. Although the agreement and course of dealings between a business and an independent contractor may give rise to an implied license for the business to use the works created by the contractor, it is highly preferable to avoid relying on an implied license. Any business that engages a non-employee to create a work and intends to own the copyright to such work should have a written agreement with the author expressly stating that the work is made for hire (if it falls within one of the eligible categories). If the work is not eligible to be a work made for hire, and for good measure even if it is, the written agreement should include a provision assigning the copyrights to the business. An example of such a provision is: “To the extent that the Work Product is not recognized as a ‘work made for hire’ as a matter of law, the Contractor hereby assigns to the Company any and all copyrights in and to the Work Product.” By including such a copyright assignment clause, a business will be able to obtain the copyrights it expects, even if the work does not qualify as a “work made for hire.” The copyright office's official publication on the subject provides a statutory citation (17 USC 101), and doesn't contradict the ABA presentation, although it is less detailed and specific on the legal issues. This section of the United States Code is a series of definitions. The relevant one states: A “work made for hire” is— (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities. In determining whether any work is eligible to be considered a work made for hire under paragraph (2), neither the amendment contained in section 1011(d) of the Intellectual Property and Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, nor the deletion of the words added by that amendment— (A) shall be considered or otherwise given any legal significance, or (B) shall be interpreted to indicate congressional approval or disapproval of, or acquiescence in, any judicial determination, by the courts or the Copyright Office. Paragraph (2) shall be interpreted as if both section 2(a)(1) of the Work Made for Hire and Copyright Corrections Act of 2000 and section 1011(d) of the Intellectual Property and Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, were never enacted, and without regard to any inaction or awareness by the Congress at any time of any judicial determinations.
The user gains the use of the software, the EULA issuer gains the limitations on how the user of the freeware will use it, that for example, prevent the freeware user from exploiting the issuer's labor by reusing it for profit. Consideration doesn't have to be monetary. As a practical matter, sometimes the business model is to give the software away as a loss leader and to have the issuer make their money with training and consulting on how to use it. Also, even in the absence of consideration, a promise upon which the person benefiting from the promise reasonably relies is enforceable under the doctrine of promissory estoppel. Further, EULA stands for &quot;end user license agreement&quot; and there are many times that license agreements aren't full fledged contracts. They are merely limited grants of permission to use something, often not even amounting to a full fledged property right or contract right. For example, if I let my neighbor walk into my living room while we talk and have tea, the right of the neighbor to be in my living room is called a license, even though it is not a contract. A license can be embedded in a contract, but it doesn't have to be.
I infer from the use of the past tense &quot;worked&quot; that you no longer work for the company in question. Also, from the fact that you are wondering whether there might be negative consequences, I infer that you do not have permission to use the systems in question. The specific consequences will depend on where the company and its computers are located, as well as on the nature of the systems you log in to and on what you do with those systems, but it's certainly possible to receive a penalty of several years' imprisonment. The fact that you created the system in question makes no difference.
That would likely be treated as a preamble. These have been held in some jurisdictions to not have any weight. For example, see Sherbrooke Community Centre v. Service Employees International Union, 2002 SKQB 101: The preamble to a contract is nothing more than an introduction to that about which the parties have actually agreed. It puts the agreement into context. It describes the goals of the agreement. It speaks to what went before and the spirit in which agreement was achieved. On the other hand, it does not contain any promises. It does not contain any restrictions or commitments. It could be removed entirely without in any way altering that which was agreed to and set out in specific terms. [...] this clause in the preamble does not create or eliminate rights or obligations Granted, the introductory phrase in your hypothetical clause is not literally a preamble, but it has the same characteristics cited in the above decision: &quot;it describes the goals&quot;, &quot;it does not contain any promises&quot;, &quot;it could be removed entirely without in any way altering that which was agreed to&quot;. If you wanted the clause to only take effect if toilets overflowed, use an alternative wording, like: Company B may not resell any products purchased from Company A at a discounted price in a manner that causes toilets to overflow.
As you've presented them, I doubt the functions are protected by copyright in the first place. Originality is one of the threshold requirements for copyright protection, and it demands that the work in question be independently created by the author, and that it possess some minimal degree of creativity. If you're talking about programming at a level so basic that the function truly must be created in a particular way, there is no originality in simply following the instructions. And even if there's some wiggle room, but the language you used has likely been independently replicated by many programmers, that's still not original enough to be copyrightable. What you want to watch out for, though, is the possibility that they've been combined into an original arrangement that is protected. I don't know enough about how copyright law is applied to code to say where or how that line is drawn, but my instinct would be that it could be a fairly low threshold.