The recent movie, “The Social Network” describes the genesis of Facebook as follows: Mark Zuckerberg, then at Harvard walked off a consulting job for fellow students, twins Cameron and Tyler Winklevoss, allegedly, stealing their social network idea. He then dropped out of Harvard and started Facebook, thereby becoming the world’s youngest billionaire.
Assuming the movie to be factually correct, how rich would Zuckerberg be if he had signed an intellectual property agreement with his employers? It all depends on the substance of the agreement.
In an ideal world, intellectual property agreements between an employer and an employee or consultant should be designed to protect both sides. Any IP developed as part of the job and using the employer’s resources should belong to the employer. Any IP not related to the job and developed without employer’s resources should belong to the employee or consultant. Furthermore, the agreement should not curtail any future work opportunities that the employee or consultant may have. Here is the law in California:
I. California Labor Code Provisions:
A. Section 2860: Everything which an employee acquires by virtue of his employment, except compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.
B. Section 2870:
(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision.
From the point of view of the employer it is best to have every employee or consultant sign:
A Non-Disclosure Agreement with consultants or employees before they are privy to technology under development; and
an Intellectual Property Agreement before the project or job begins.
From the point of view of an employee the following should be considered:
Before you begin a new employment:
Write down descriptions of your inventions that you have already conceived.
Upload these descriptions to a secure service such as mycreativeregistry.com , a service of IP.com.
When you begin a new job you are required to sign an intellectual property agreement with your employer. Review its terms carefully before you sign it:
Do inventions developed in your own time with your own resources and not within the purview of your job belong to you?
Is there a non-compete clause that kicks in after the end of your employment?
Can you exclude your existing invention(s) from the agreement?
During the term of your employment:
Never use any company resource to develop your own invention, including computers, Internet, emails, copy machines, library, phones, cell phones and any other company perks. If the company determines that you used its resources, it may use that as a reason to deny you the ownership of your invention.
Never use any company trade secrets in your invention.
After you leave your employment:
Never divulge any trade secret you may have learned or violate any non-disclosure agreement you may have signed with your previous employer.
So what is the moral of the story? We’ll ever know what might have been if Zuckerberg and the Winklevoss twins had signed an IP agreement. What we do know, however, is that a well written, clear and fair IP agreement can prevent confusion and litigation.
For archived newsletters and a lot of information for the small inventor go to: www.patentsandventures.com.If you have any question you can contact me at (858)259-2226 or email me at firstname.lastname@example.org.This newsletter should not be construed as legal advice. ©2010 by George Levy