From: Sent: Friday, June 02, 2000 3:41 PM To: Ed Lazowska Subject: MS employee agreement difficulties Here's a more detailed description of what I feel the problems are with the MS employee agreement. Sorry it's so long; I felt it had to be to properly explain the issues. Ed Lazowska writes: > A bullet-list of shortcomings would be helpful. The three of which I'm > most aware are: > > 1. One-year duration of non-compete > > 2. Non-compete is too broad; prevents employment on a project that > competes with MS, even if you work in a different part of it > > 3. MS owns everything you think of during the period of your > employment, whether it's your work for them, or your ruminating about > your thesis in the shower. (Note that this is a reasonable > stipulation for a long-term permanent employee, but surely not for an > intern.) > :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: There are two troublesome parts to the agreement: the Non-Competition clause (#9) and the Assignment and Exclusions of Inventions (#'s 4 and 5). The Non-Competition clause in the first contract I received stated: 9. Non-Competition & Non-Solicitation. While employed at MICROSOFT and for a period of one year thereafter, I will not: (a) accept employment or engage in activities competitive with products, services or projects (including actual or demonstrably anticipated research or development) on which I worked or about which I learned confidential or proprietary information or trade secrets while employed at MICROSOFT; (b) render services in any capacity to any client or customer of MICROSOFT for which I performed services during the twelve months prior to leaving MICROSOFT's employ; (c) induce, attempt to induce, or assist another to induce or attempt to induce any person to terminate his employment with MICROSOFT or to work for me or for any other person or entity. If during or after my employment with MICROSOFT I seek work elsewhere, I will provide a copy of this Agreement to any persons or entities by whom I am seeking to be hired before accepting employment with or engagement by them. The problem arises in the breadth of clause (a). It disallows working on products competitive with Microsoft, even if the actual work to be done is completely unrelated to the work previously done at MS. For example, I could intern at Microsoft hacking the WinCE kernel. I could not then work for one year on any other product competing with WinCE, even if I were just working in the factory shrink-wrapping the boxes. Worse, for one year I could not do any research related to embedded operating systems, because it would be competitive anticipated research. This is an incredibly strong disincentive for graduate students to come work at MSR -- they can only work in areas that they have no intention in doing research in for the next year. Furthermore, the agreement applies not just to projects that interns work on, but on any other project about which they happen to hear proprietary information. So even if a student is planning to do research in graphics at their home institution, and they come to MSR to work on (in order to avoid these problems) quantum computing, they better be very careful not to talk to any graphics people (or to overhear any of their lunchtime conversations) or they could be in legal trouble the next year. I refused to sign this agreement. I was offered two choices: 1) reduce the time period from 1 year to six months. This is the agreement that was offered to Adam. I checked his agreement; no other changes were made. In fact, it says "Last Revised 3/1/98" on the bottom, so it must be the same. The other choice that was offered me was to amend clause (a) to the following: "... (a) accept employment or engage in activities competitive where THE SUCCESSFUL FULFILLMENT OF MY DUTIES WOULD NECESSITATE THE USE OR DISCLOSURE OF ANY PROPRIETARY, CONFIDENTIAL, OR TRADE SECRET INFORMATION THAT I OBTAINED WHILE EMPLOYED AT MICROSOFT, THIS DOES NOT SUPERCEDE [sic] OR LIMIT MY OBLIGATION IN PARAGRAPH 3" (caps mine; typo MS's :) ) Paragraph 3 covers non-disclosure of proprietary information; it is straightforward and actually very helpful because it makes explicit what is often a very confusing part of internship employment. I chose this amendment; it does not limit my ability to do research afterward, provided that I don't disclose MS proprietary and confidential information, which, despite the explicit statement, was already restricted in Paragraph 3 (as far as I could ascertain). However, my supervisor was required to sign my agreement, so apparently it's not something that the legal department often does. Nevertheless, this is the option that should be the standard for internships, at least at MSR, but probably for students working in product divisions as well. The other troublesome parts were the Assignment of Inventions, and the Excluded and Licensed Inventions. Here's the text: 4. Assignment of Inventions. I will make prompt and full disclosure to MICROSOFT, will hold in trust for the sole benefit of MICROSOFT, and will assign exclusively to MICROSOFT all my right, title, and interest in and to any and all inventions, discoveries, designs, developments, improvements, copyrightable material, and trade secrets (collectively herein "Inventions") that I solely or jointly may conceive, develop, author, reduce to practice or otherwise produce during my employment with MICROSOFT. I waive and quitclaim to MICROSOFT any and all claims of any nature whatsoever that I now or hereafter may have for infringement of any patent application, patent, or other intellectual property right relating to any Inventions so assigned to MICROSOFT. My obligation to assign shall not apply to any Invention about which I can prove all of the following: a) it was developed entirely on my own time; b) no equipment, supplies, facilities, services, or trade secret information of MICROSOFT were used in its development. c) it does not relate (i) to directly to the business of MICROSOFT or (ii) to the actual or demonstrably anticipated business, research or development of MICROSOFT; and d) it does not result from any work performed by me for MICROSOFT. I will assign to MICROSOFT or its designee all my right, title, and interest in and to any and all Inventions full title to which may be required to lie in the United States government by any contract between MICROSOFT and the United States government or any of its agencies. In addition to the rights provided to MICROSOFT under paragraph 5 below, as to any Invention complying with 4(a)-(d) above that results in any product, service, or development with potential commercial application, MICROSOFT shall be given the right of first refusal to obtain exclusive rights to the Invention and such product, service, or development. 5. Excluded and Licensed Inventions. I have attached a list describing all Inventions belonging to me and made by me prior to my employment with MICROSOFT that I wish to have excluded from this Agreement. If no such list is attached, I represent that there are no such Inventions. As to any Invention in which I have an interest at any time prior to or during my employment, if I use or incorporate such an Invention in any released or unreleased MICROSOFT product, service, program, process, machine, development or work in progress, or if I permit MICROSOFT to use or incorporate such an Invention, MICROSOFT is hereby granted and shall have an exclusive, royalty-free, irrevocable, worldwide license to exercise any and all rights with respect to such Invention, including the right to protect, make, have made, use, and sell that Invention without restriction as to the extent of my ownership or interest. The first problem with the assignment of inventions is clause 4(c). Given that the business, research, and development of Microsoft can be generally be interpreted to include "any software", pretty much any invention (which includes anything -- not just patents -- see the text) that a computer science student might think of on their own time, relating, for example, to ongoing prior work at school, becomes Microsoft property. MS's legal department would not negotiate this point at all, and claimed that a VP (Brad Chase maybe? I can't remember) would need to authorize an alteration of this clause. This was a problem for me, because I wanted to continue to give feedback to a new research project on campus (Hendrix) that was totally unrelated to my internship at MSR, but had I, Microsoft could have legally laid claim to my work, as well as the work that other students had done on the project. Another problem is the right of first refusal. If I develop a better grass-catcher for my lawn mower, then even though I do not have to assign this invention to Microsoft, I must give Microsoft the right of first refusal to exclusive rights. Say I knew that John Deere really wanted this; who would benefit from the invention? Microsoft could require me to assign rights to them, and then resell the rights to John Deere. I would receive very little compensation. This is completely unjust. Another problem is the significance of the list described in section 5. By the wording, such inventions are excluded from this agreement, yet since they are made prior to employment, all such inventions should be excluded anyway. So what is the benefit of providing a list? I asked Microsoft's legal department about this; they claimed that it was to protect me in case there was any dispute about when the work on the invention had taken place. This seems reasonable, but it is not at all clear from the text of the agreement that this is the rationale. This should be made explicit, so that students realize that they only need list a project if they think that they need extra legal protection in case of ambiguity about when they developed a particular idea (specifically that it was developed before they began employment). In my case, I was uncomfortable about signing the document as it was, and would not have done so had I not been reassured by Turner Whitted about what his intentions were. His attitude is that many students' concerns can be eased if there is a) a specific project defined before employment, and b) that there is a publication resulting from the project. The publication clearly defines what is public, and allows the student to return to their institution and build upon the public work. The student benefits from the summer and can build upon it without worries of what is public and what isn't, and MSR benefits from the exchange of ideas and the fresh perspective that the student brings in. Thanks for looking into all of this. It would sure ease the concerns that students have here, and reduce the hassle that seems to accompany every offer.