Here’s a tidbit from the Bratz doll litigation that I hadn’t noticed previously.
In its opinion from last October (go here for a PDF copy), the Ninth Circuit said the following about the phrase “at any time during my employment” (footnote omitted):
The district court disagreed, holding at summary judgment that the agreement assigned to Mattel “any doll or doll fashions [Bryant] designed during the period of his employment with Mattel.” It was therefore irrelevant “whether Bryant worked on [Bratz] on his own time [or] during his working hours at Mattel.” We again review the district court’s construction of the contract de novo. See L.K. Comstock, 880 F.2d at 221.
The phrase “at any time during my employment” is ambiguous. It could easily refer to the entire calendar period Bryant worked for Mattel, including nights and weekends. But it can also be read more narrowly to encompass only those inventions created during work hours (“during my employment”), possibly including lunch and coffee breaks (“at any time”). Extrinsic evidence doesn’t resolve the ambiguity. For example, an employee testified that it was “common knowledge that a lot of people were moonlighting and doing other work,” which wasn’t a problem so long as it was done on “their own time,” and at “their own house.” She agreed when asked, “Was it your understanding that if you designed dolls when you were at home at night that you owned them?” However, another employee testified, “Everything I did for Mattel belonged to Mattel. Actually, everything I did while I was working for Mattel belonged to Mattel.”
That’s something to consider when addressing IP rights in employment agreements. Can you think of any nuances to bear in mind?
At any time during the term of my employment might work.
If going for the other approach, during the course of employment is a phrase used in UK copyright law, and would exclude non-employment activities. Similarly UK patent law refers to inventions made in the course of the duties of the employee.
Mark: I’d want to be more specific than “during the term of my employment.” And I’d probably want to be more specific than “during the course of employment” too, by referring to “outside of work hours” or some such. Ken
Hello, Ken –
Interesting topic, as I am currently revisiting our employee confidentiality and inventions disclosure agreement. Perhaps the clause could be clarified to focus down on the IP that would be relevant to the company. For example, I work for a drug development company, and as long as I am not using company time and resources I am not certain that anyone cares if I design a new Barbie (or Ken, as the case may be). On the other hand, if I am cooking with gas in my garage and I mix up a solution that has the potential to be a drug, it is arguable that that activity may be within my employer’s purview.
We currently use the following phrase: “[inventions that are] conceived or developed or reduced to practice,
during the period of time I am in the employ of the Company.” That is a very broad construct. I suppose this could be modified by inserting “that relate to the company’s business or the conduct thereof” after the word “practice” in that phrase.
I once have occasion to sort one of these out. We had an employee that invented something in his non-work time (and during the term of his employment) that was (if you squinted really hard) tangentially related to the conduct of company business. He was a straight shooter and filled out an invention disclosure. Rational minds prevailed, and when he asked for the invention rights to be assigned to him the company agreed. Good outcome.
Fitz: I think your current language still leaves room for confusion. Ken
I hate to resurrect an old post, but what about this:
We typically do allow our employees to do their own thing, even during work hours, in the event they don’t have much company-related work. In this case, does the phrase “while performing work for [the company]” do the trick? I would expect this to cover only work that was being performed at the company’s direction or ancillary work related to any such projects. Naturally, we would not want to assert any rights over their freelance or side projects.
Suppose you do want to own *everything* created during work hours, but also want to allow for the fact that an employee could be working on some additional feature or product at home that is actually meant to be for the company: “while performing work for [the company], or at any time during [the company’s] work hours.”
You could also mention “on the premises of [the company]” if you want to prevent your workers from staying in the office late to work on their own projects.
Mark: Referring to “work for the Company” doesn’t seem specific enough. How about “work performed at the direction of the Company”?
Regarding your second option, how about “(1) work performed by the Employee during the Company’s business hours and (2) work performed by the Employee outside of the Company’s business hours if it relates to projects that the Employee worked on during the Company’s business hours”?
Ken
Ken –
Regarding “at the direction”: Is there ever a situation when work can be performed by an employee for the benefit of the company, but not necessarily at the direction of the company?For example, say a fulfillment manager goes above and beyond his normal day-to-day activities and develops a program to assist with forecasting and purchasing inventory. The company decides they want to license this program to others. Would the employee be able to assert his rights to that program because it was not developed at the explicit direction of the company?
In reply to the second part of your response, in item 2, what if the after-hours work was a new project that had not been worked on during business hours? The other potential source of confusion is that you could be roping in after-hours activities of the employee for non-company side projects if that employee had worked on a separate, but related, side project during business hours at any time beforehand, no matter how minuscule.
For instance, assume Joe designs web pages as a side business. During business hours, he takes it upon himself, neither at the direction of the company nor for its benefit, to design a simple blog script. Under item 1, this work becomes the property of the company, regardless of Joe’s intent. Later, Joe wises up and creates his next project, an RSS widget for blog feeds, after business hours. In this example, the company might also own the RSS widget because it “relates to” a prior project that he worked on during business hours.What about something like: “. . . (2) work performed by the Employee outside of the Company’s business hours if it is [at the direction of] [for the benefit of] the Company”?