I've been developing software (in Java) with a friend for over a year
now on my own equipment, at home. We're hoping to finish the software
in the next year or so and get our business off the ground. It's
software for a very specified niche in the beverage production
industry.

We're going to form an member operated LLC. We've drafted the
articles, operating agreement etc. but have not submitted anything yet
to the state of Texas, where we both reside.

I've been offered a new Java developer position in the transportation
industry as my regular career must continue as this project could
potentially fall apart for whatever reason.

They want me to sign a confidentiality agreement however it states
several clauses which concern me:

Most notably:

'Employee hereby acknowledges and agrees that all such Copyrightable
Materials created or developed by him or her (whether so created or
developed at the Employer's offices or at Employee's home or
elsewhere) during the term of Employee's employment shall be created
in the scope of his or her employment are 'works-for-hire'.

I asked them about this and they told me 'outside work is discouraged'
and anything I develop could potentially be their property.

Is this right? How do I protect my existing and ongiong project from them? 

I understand that they want to protect their intellectual property but
I also want to protect mine...

I'm going to consult with a lawyer more than likely, but I need some
basic answers to get started.

---

Clarification of Question by bogfrog-ga on 15 Sep 2005 23:28 PDT

I found this in another thread, a clause where you can declare your
existing IP.. but this is a project which started almost 1.5 years
ago, been in development for another year and developing is ongoing
(outside of work, at home on my own machine, software licenses etc.)

"It is understood that all Inventions, if any, patented or unpatented,
that Employee made prior to his or her employment by the Company (the
"Prior Inventions") are excluded from the scope of this Agreement.  To
preclude any possible uncertainty, Employee has set forth on Exhibit C
attached hereto a complete list of all of his or her Prior Inventions,
including numbers of all patents and patent applications, and a brief
description of all unpatented inventions that are not the property of
a previous employer.  Employee represents and covenants that the list
is complete and that, if no items are on the list, Employee has no
Prior Inventions.  Employee agrees to notify the Company in writing
before Employee makes any disclosure or performs any work on behalf of
the Company that appears to threaten or conflict with proprietary
rights Employee claims in any Invention or idea.  In the event of
Employee's failure to give such notice, Employee agrees that Employee
will make no claim against the Company with respect to any such
Invention or idea."

Howdy bogfrog-ga,

I can only comment on this from personal experience, and even though it was
30 years ago, I think it is still applicable.  It was pretty much the same
circumstances, well, a different programming language, but otherwise almost
identical conditions to yours.

It worked out for me in that I requested the company, before hiring me, to
sign a Non-Disclosure Agreement (NDA) and I then disclosed my own projects
to them.  Just like you, my personal work was in a completely different
field than that of the company's work.

We came up with a modified confidentiality agreement that agreed that if it
was work done on their time, it was theirs, and if it was on my time, it was
mine.  I then was extremely cautious to not do any personal work "at the
office" and I didn't bring any "office" work home, etc.

It worked out fine for me and the company at the time, mostly because we
both agreed that it was mutual paranoia that was driving the situation.  We
also were very specific in that I was not, and would not be in the same or
in a competitive market with them while I was there, and for a few years
after I left them.  As it worked out, I never worked in their industry
again, but not because of the noncompetition clause in the agreement.

Looking Forward, denco-ga - Google Answers Researcher