Side Projects · Primly Community

Side-project IP: what your employment contract actually says

Primly Team · 1 reply

Your employment contract probably has a clause about IP ownership of side projects. Most people don't read it carefully. Here's what to actually look for, and what to do if it's restrictive.

Common clause types (US tech employment): "Anything you build using company resources or during work hours is ours." Standard, reasonable, hard to argue with. Don't build side projects on your work laptop or during work hours. "Anything you build that's RELATED to our business is ours." Vague and potentially expansive. "Related to our business" is interpreted broadly by employer counsel and narrowly by employee counsel. If your employer is a generalist tech company (Google, Meta, Microsoft), this can theoretically claim almost any tech side project. "Anything you build during your employment, regardless of resources, is ours." Aggressive. Found in some startup contracts. Has historically been UNENFORCEABLE in California (Labor Code §2870): California employees can build side projects on personal time/resources without company claim, except those related to actual company business or actual or demonstrably anticipated R&D. State-specific protections: California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah, and Washington all have variations of "side-project carve-outs" similar to CA §2870. Check your state.

What to do if your contract is restrictive: Ask for an explicit carve-out, in writing. Many employers will sign a "Prior Inventions" or "Excluded Inventions" addendum listing your side project as carved out. Standard ask; minimal pushback. Get HR to confirm in writing. Verbal "oh that's fine, don't worry about it" is worthless if leadership changes. Don't blur the lines. Building your B2B SaaS on the side while working for a B2B SaaS company is the worst-case fact pattern. Different domain = easier defense. Keep evidence of separation: personal hardware, personal accounts, personal time logs.

When to lawyer up: Before you take seed funding from outside investors Before you launch publicly under your name Before you negotiate a new job offer (carve-out for the existing side project)

Employment attorneys typically charge $300-500 for a 30-min IP review consultation. Money well spent before you go public.

1 reply

careerveteran

california 2870 saves the day for a lot of folks. outside CA the standard advice is different: get the written carve-out. i've never seen an employer refuse one when asked at offer-stage. refusing one mid-tenure is much harder. ask early.