Legal Question in Employment Law in Virginia
I am being offered a position with a leading Internet service company and within their employment agreement they have the following 'Pre-existing Materials' clause:
"For purposes of this Agreement, 'Pre-existing Materials' means any
materials, code, methodology, process, technique, or Intellectual
Property Rights developed, licensed or otherwise acquired by me,
solely or jointly with others, independent of the Agreement and
Services to be rendered and which are not based upon and do not
incorporate any [Company Name] Confidential Information or other Intellectual
Property Rights of [Company Name]. I hereby grant to [Company Name] a perpetual,
irrevocable, fully paid-up, worldwide, non-exclusive, assignable,
sublicensable license to use, reproduce, display, perform, distribute,
and make derivative works of any Pre-existing Materials that are
incorporated into the Work, in any medium hereby known or hereafter
invented for any purpose."
I have a patent pending and have other material which I have not published that directly and indirectly relates to the company in general and my planned role in particular. Their general counsel seems unwilling to remove the clause, but said they could carve out items I wish to protect. However, given some of my materials are not published (i.e., trade secrets) and I do not wish to share. Moreover, my patent attorney said that while I can disclose the pending patent as it's public, I risk any changes or additions to the filing could be deemed their property.
Is such a broad and overreaching clause enforceable in Virginia? If they are unwilling to remove this 'Pre-existing Materials' clause, what other options do I have besides turning down the opportunity? Are such clauses common?
2 Answers from Attorneys
If the so-called "carve out" as suggested by the general counsel is sufficently comprehensive in its description as to what may relate to (and therefore be protected) under the pending patent, I doubt that the
company would be able to successfully claim any later additions to it as their
property.
Another option is simply not to incorporate any such "Pre Existing Materials" into the work that you perform for Company. Note that under the clause:
A. You are not transferring any ownership of these materials. You are granting the Company a (non-exclusive?) license to use any such materials that you incorporate. If you don't incorporate them, there is no issue.
You might want to add the word "non-exclusive" to the scope of the license outlined. This is probably implied, even if you don't say it, but it is a good practice to specify that the license is non-exclusive. That merely gives the Company the right to use the work that you have created for them -- it doesn't give them the right to universally use it, and it doesn't grant them ownership -- just a license.
B. Such provisions are quite common and from the employer's standpoint, very reasonable.
C. If you get to a stage where you need to incorporate "Pre Existing Materials" go to the Company and explain the situation. However, from their standpoint, it's hard to say "Oh go ahead and incorporate it and we (the Company) just won't have any right to use it." Would that be reasonable for them? Seeing the situation from their point of view is essential.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
