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Contracts with non compete and ownsership clauses. How do they affect you as a maker?

Contracts with non compete and ownsership clauses. How do they affect you as a maker?

I recently started freelancing again and I just received my contract. I have so many concerns about 2 specific parts of the contract that would really restrict my abilities as a maker. Specifically:

Competing Relationships.

Subject to written waivers that may be provided by Company and subject to Section 5.2, during the term of this Agreement and for one (1) year after the termination of this Agreement, Contract Product Manager will not directly or indirectly, for itself or any third party other than Company, perform any of the following actions: (a) solicit or encourage any employee or contract Product Manager of Company or its affiliates to terminate employment with, or cease providing services to, Company; or its affiliates, (b) solicit the trade of, or trade with, any customer or prospective customer of the Company (except during the term of his appointment by the Company for the benefit of the Company, or (c) directly or indirectly participate or engage in, or assist, any “Competitive Activities” anywhere in the world. For purposes of this Agreement, “Competitive Activities” shall mean: any business focused on the development, marketing, licensing, and sale of any online, downloadable or other software or software platform whose direct or indirect function is to facilitate: (i) marketing services, (ii) marketing planning, (iii) marketing staffing, (iv) marketing team building (v), and/or (vi) tokenized community collaboration.

OWNERSHIP

Assignment. All works of authorship, designs, inventions, improvements, technology, developments, discoveries, and trade secrets conceived, made, or discovered by Contract Product Manager, solely or in collaboration with others, in connection with the Services (collectively, “Inventions”) will be the sole property of Company. In addition, Inventions that constitute copyrightable subject matter will be considered “works made for hire” as that term is defined in the United States Copyright Act. To the extent that ownership of the Inventions does not by operation of law vest in Company, Contract Product Manager will assign (or cause to be assigned) and does hereby assign fully to Company all right, title, and interest in and to the Inventions, including all related intellectual property rights.

What are your thoughts about this? I want to argue for them to be removed entirely.

on March 4, 2019
  1. 2

    I have a similar contract. Always feel like they should not be legally allowed.

  2. 2

    Get a lawyer who is a specialist in the area to reduce the scope of these clauses and to negotiate for you/advise you.

  3. 2

    Honestly, those sound pretty fair/standard.

    I've definitely seen a lot worse. My one concern would be that the scope of "competitive activities" is pretty broad, but then I don't know what your employer does (and at what scale).

    Depending on your location/the location of your employer, they may not be enforceable anyway.

    What are your concrete problems with these clauses - what do you want the freedom to do, that they stop you from doing?

    1. 1

      I have already worked on a tool for marketing purposes before even coming in contact with this company. I am worried that there may be some conflict of interest there. The terminology used above is just so broad in terms of facilitating " (i) marketing services"...

      1. 1

        you can disclose that upfront and ask about exceptions, but more importantly they presumably want to hire you partly because you have relevant experience. It is standard contract language unfortunately, but also make a lot of sense.

        Like it seems dramatic and unfair as an entrepreneur like yourself, but if you're a business and a rival could slip contractors into your workplace, learn the tricks of the trade, and then return and share the info, it's would be a big problem.

        The only real defence is to only contract with companies that you're not interested in haha

      2. 1

        Hmm ok.

        Obviously none of us know the specifics except you, so it's difficult to provide useful advice.

        That said, the contract allows for written waivers which would exclude certain projects from being covered by the conditions of the contract. I'm sure you can submit those for approval in advance, before signing.