united-states, intellectual-property, non-disclosure-agreement, consultingI am considering the possibility to start consulting company in Russia. Consulting is a bit uncommon – I am applying machine learning / deep learning techniques.
Now I have few potential clients from different fields. One of them from USA. He want me to improve some existing ML algorithm and write it on Python.
I see some terms in the draft agreement that are bothering me very much:
Question: Is it typical practice in USA consulting? I have very little experience in this, and judging this with common sense.
UPD1: agreement shall be governed by the laws of state of Delaware.
This sounds like a typical off-the-shelf contract with a strong bias in favor of the employer. Anyone can put anything they want into a contract, however that does not mean those terms are enforceable. If you’re truly worried about these clauses (enough that you are willing to walk-away from the potential deal), you can always (politely) negotiate softening the language to something that is more acceptable to both of you.
All rights on the code/new algorithm/research ideas(!) are passed to the client. I cannot even use it in my other projects.
If someone is hiring you to write code for them, the exact code itself typically becomes property of the employer. That’s very common. Someone could own a right to an algorithm if it’s truly proprietary, but this is less easy to defend than copyright. As for giving up ownership of research ideas, that’s pretty sketchy. A well-defined idea, especially an implemented idea, can be owned, patented, and transferred. Something theoretical or abstract is much harder (probably impossible) to own. Ultimately, only a court could decide how much of this is enforceable, with the copyright-able code being the easiest, the algorithms being possible, and the ideas being the least likely to be enforceable.
Non-compete clause. I cannot provide same services to other companies in the industry. Non-compete is active for few years after termination of agreement. Basically, after the very first project with this client, all other possibilities in the same industry are closed for me. Seems way too restrictive.
Again, anyone can put anything they want into a contract. That does not mean it’s enforceable. Clauses like this are very common and are often non-enforceable because they are considered unconscionable. Unlike intellectual property which is mostly governed at the federal level, non-compete agreements are generally governed at the state level. Some states will be more favorable to one side than the other. What all states have in common is limitations in clauses like this.
Consider getting professional advice:
If this is an agreement of significant value, you might want to consult with a US attorney (preferably one in the US state in which the agreement is made) to fully understand your rights and responsibilities as far as US law is concerned. The same attorney might also review the remainder of the contract and might even negotiate with your potential employer to make sure the terms are satisfactory to you.
Since you are in Russia, many US laws will not be enforceable (assuming you intend to stay in Russia). You might want to consult with a Russian attorney to understand the practical risks of these terms to your specific situation. (After all, if Obama can’t get Snowden, he might not be able to get you either.)
I am not an attorney. This is not legal advice.
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