( ESNUG 431 Item 7 ) --------------------------------------------- [07/14/04]
Subject: Readers On Possible Precedent In Zombie-Slave Employment Contracts
> Editor's Note: First off, let me say that if Nassda is guilty of hands-on
> theft of Synopsys source code, Nassda deserves to be punished. But one
> aspect of this Synopsys vs. Nassda lawsuit story bothers me:
>
> The ruling doesn't necessarily mean that code was literally copied.
> "'Derived' means that you take knowledge of our code and use it to
> write other source code a lot more quickly, leveraging our work
> to produce a new product faster," Jackson said.
>
> I know Synopsys and Cadence (and probably Mentor and Magma) like to force
> their workers to sign "Zombie-Slave" contracts. The "Zombie" clause says
> we-own-everything-you-ever-think-of. The "Slave" clause says you-can't-
> work-for-any-rival-for-X-years. My weak understanding of California law
> is that these contracts aren't that enforcable (something about California
> being a Right To Work state or something) so they pretty much boil down
> to if-you-leave-us-our-lawyers-will-screw-with-you-and-though-we-won't-
> win-we'll-curse-you-with-massive-legal-bills-to-pay-defending-youself.
>
> My fear is that this lawsuit is seeking a precedent to make Zombie-Slave
> employee contracts enforceable. A good 95% of EDA innovation comes from
> ex-Synopsys, ex-Cadence, and ex-Mentor employees coming up with an idea
> for a better EDA product and giving it a try in a start-up. Look at
> Synplicity, Silicon Perspectives, Apache, Magma, 0-in, Verisity, CoWare,
> Chronologic, ModelTech, Get2chips, IKOS, Sierra, Plato, Simplex, ...
> they're all ex-Synopsys, ex-Cadence, and/or ex-Mentor employees. Won't
> enforced Zombie-Slave contracts pretty much kill off innovation in the
> EDA industry? Am I wrong to have this fear?
>
> - John Cooley
> the ESNUG guy
From: Jean Armstrong <jean=user domain=akipr spot calm>
Boy, I agree with you, John. It does seem to have that potential.
- Jean Armstrong
Armstrong Kendall, Inc. Beaverton, OR
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From: Emil Lambrache <emil=user domain=atmel spot calm>
Hi John,
Your fear is absolutely justified and I believe shared by many. However,
since the Roman Emperors up to the modern day dictators (choose whom so
ever you like, Napoleon, Hitler, Stalin,...) human thought has escaped
the "law enforcement" and very luckily for the universal progress of
humankind. Die Gedanken sind frei.
- Emil Lambrache
Atmel San Jose, CA
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From: [ An Ex-Synopsys Employee ]
Your fear is far from unfounded. As a formerly purple person, I can tell
you that there is no small amount of anxiety there about people leaving to
pursue ideas that found no audience within the empire walls. There's
something wrong when an industry perpetually ejects its brightest minds.
- [ An Ex-Synopsys Employee ]
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From: Bob Pepple <bob.pepple=user domain=intel spot calm>
Hi, John,
I absolutely agree with you. The EDA industry is fueled by derived code.
On another level, enforcing this seems to be a denial of "...life,
liberty, and the pursuit of happiness...". It just goes against the
whole better mouse trap, American way ideal.
- Bob Pepple
Intel Corp.
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From: John Cappello <jcappello=user domain=optimal-design spot calm>
Hi, John,
I agree that this _is_ a real fear, especially that word "derived."
Innovation is obviously impacted because skilled workers exiting a
company are restricted from breeding the advancement of technology.
Also, since the worker doesn't have the freedom to apply what he has
learned nor work for a company's competitors, this seriously impacts
that worker's options for future employment.
- John Cappello
Optimal Design, Inc. Sewell, NJ
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From: John Sanguinetti <jws=user domain=forteds spot calm>
Hi, John,
I couldn't agree with you more on this. These kinds of employee
restrictions are indefensible on lots of grounds, but their overall
effect is that they hurt the industry.
- John Sanguinetti
Forte Design Systems San Jose, CA
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From: Peter McCrorie <petemc=user domain=cadence spot calm>
John,
I just had to respond to you on your opening commentry.
I believe that there is a very big, but very subtle difference
between a situation where someone uses his/her inherent knowledge,
versus using existing documents/code/information... even though they
may have helped develop it.
The first case is the situation that you point out, where unreal
restrictions are tried in an attempt to limit an employee's ability to
compete in the same space. In this case, the knowledge belongs to the
person, not the company. It is a different situation when someone
uses/accesses existing work or uses/accesses information that could be
considered belonging to a company.
To use myself as an example to help explain my thoughts on this,
Cadence does not own my ability to develop good powerpoint slides, and
therefor I am free to use my ability where I see fit. Cadence does,
however, own the content of my powerpoint slides... they relate to
Cadence specific information.
The same applies to code. The code itself belongs to a company, period.
The ability to develop code belongs to the individual, period.
In the case of Nassda, if I read it right, some 60,000 lines of code were
considered as "copied" or "derived". If this is correct, then Sang
et al are guilty... and of course it doesn't help Nassda's case when it
appears that development logs were modified "after the fact". If the
code was developed using solely the knowledge of the individuals, then
they are innocent. This is where the courts come in.
- Peter McCrorie
Cadence Design Systems San Jose, CA
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From: Ha Adolfo <adolfo=user domain=astdesign spot calm>
It's a scary thought, if your fear of Zombie-Slave becomes reality.
We're is a tiny company and we are currently working on a software to do
full custom IC layout. Last time we looked, we have no ex-Mentor,
ex-Cadence, ex-Synopsys, etc. in our payroll. However, we have some
associates who are working at such entities.
When we ready to market our software, we probably cannot afford to link
ourselves to such associates due to guilty-in-association. Last time we
worked with a major fortune 500 company in the industry, we noted on our
web site of X entity as one of our customers; their lawyers (yes, plural)
came down on us like white on rice. Sheeeeeeeeh.
- Ha Adolfo
Advanced Silicon Technology Wilmington, CA
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From: Tom Moxon <tom=user domain=moxon spot calm>
Nope, John, you're not wrong to have this fear.
I agree completely. One of the reasons that I've never been an employee
of Synopsys, Intel, etc. is the "agreements" that they want employees to
sign. I might consider it if we really had employment contracts like our
European counterparts. Those tend to give both the employer and employee
more protections. However, with "at-will" employment in a "right to work"
state, most employee agreements tend to be totally in the the employers
favor. And, as you mention, often have several un-enforceable clauses.
One of the reasons, I turned to consulting on a contract basis _is_ the
ability to negotiate a contract and hence, the terms of your employment.
I always council other engineers to make sure that they have their OWN
attorneys review ANY agreement before they sign on the dotted line. The
other suggestion is to simply cross out any passages in an employee
agreement that you can't accept (and make sure to initial and date that
section). If they really want to hire you, they will usually remove any
"un-enforceable" clauses.
And always, always keep your own copies of any agreement, once both you and
the company have signed it. (I usually have my attorney sign "reviewed
by" as well.) It wouldn't be the first time a company has trotted out a
new agreement, claiming that it supercedes the older one -- when you
haven't ever signed THAT one...
After 20 years of contract work, you tend to pick up a few things...
- Tom Moxon
Moxon Design Beaverton, OR
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From: Howard Landman <howard=user domain=riverrock.org>
Hi, John,
Almost all high-tech companies have some version of the Zombie clause,
and the wording is almost identical everywhere. They own all your
creative works whatsoever, whether related to the company's business or
not and whether created on company time or not. I've been refusing to
sign the default version of these for nearly a decade now. And getting
away with it. The legal staff knows that it isn't enforceable in
California, but wants the strongest possible wording anyway. And in
fact they don't often fight back if you propose more reasonable wording.
For me, the last straw was when a couple of my major hobbies were
songwriting and poetry. The standard wording would have meant that
Toshiba (for example) would own any songs or poems (or photographs or
essays or paintings or sculptures or recipes or ...) that I produced
while employed by them. That wasn't acceptable, and I told them so.
They didn't actually get around to relenting for a couple of weeks,
during which time I had already started work, but it wasn't too painful.
I've also brought scripts into companies to save myself the trouble of
writing them over from scratch, or used techniques that I developed
elsewhere. If you list these things on the schedule of prior inventions
you're reasonably safe. Be painstakingly thorough there, even if it
takes you a couple of days to fill it out. List everything you've ever
written or created. The next time it won't be as much work because
you'll only have to add a little for recent items.
My rough understanding of California law is that, if you do anything
which does not relate to the company's business AND was not done using
any company resources whatsoever, they have no claim on it regardless of
what you signed. If you only pass one of these tests, you're in murky
territory. And if you fail them both, you're very likely to lose.
However, just because a company has no valid claim doesn't mean they
won't sue. And just because YOU have no valid claim doesn't mean you
can't start a company like Avanti and make millions. :-)
But there's a right way to do these things. The founders of ITEK had an
idea at Kodak that their boss wouldn't fund; they got him to put in
writing that Kodak was not interested in the idea; and then they all
quit and started their own company. Kodak sued and was laughed out of
court. The company name, ITEK, was an acronym for "I Took Eastman
Kodak". :-)
- Howard Landman
Riverrock Consulting Fort Collins, CO
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From: Doug Walker <walker=user domain=cs.tamu.edu>
Hi, John,
Are you saying that you think it is okay to use the trade secret IP from
one company (e.g. the unpublished algorithms and data structures) to
start another, without license or compensation? We're not talking general
knowledge gained by experience.
Also, every IP policy I know says we own everything, or at least everything
remotely related to our business. That is the nature of an exempt employee;
you are working whenever you think up some new idea, even if it's while
on vacation at Disney World. But proving a violation is difficult. It
takes time to bring any new idea to market, and without the smoking gun of
materials stolen from the previous employer or really similar code or
algorithms, it is really hard to prove that the idea occurred prior to
leaving the employer. Has there ever been a successful lawsuit on this
topic that did not involve stolen materials and reimplemented ideas?
Oh yeah, universities and large companies do provide at least a little bit
of innovation. Go look at "25 Years of Design Automation", the selection
of best papers from the first 25 years of DAC. If you stretch, you might
count one or two as coming from a vendor. Walking around the DAC exhibits,
I am hard pressed to come up with a 95% innovation rate for vendors, unless
you count new names for old ideas ("Structured ASIC") or laughable
hyperbole ("fast, full-chip, full-wave, 3-D circuit extraction"). Vendors
produce many good innovations. Just don't oversell them.
- Hank Walker
Texas A&M University
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From: Austin Franklin <austin=user domain=darkroom spot calm>
Hi John,
The same could be said about DEC, that a large percentage of the technology
in the computer industry came from DEC... even Windows, from Dave Cutler,
the VMS architect, as well as a host of networking companies, etc. Yes,
this would be a dangerous precedent, and your fear is warranted IMO, in
this day and age. (Look at what foolish patents get granted!)
- Austin Franklin
Darkroom Technologies Harvard, MA
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