Despite the fact that California has this law, it doesn't matter in a practical sense. A scenario I've seen play out multiple times:

1. Employee creates side project

2. Employee quits to pursue side project as a company

3. Former employer decides to sue employee because they don't like it for whatever reason (this need not have any legitimate chance of winning in court, it could be entirely frivolous)

4. Former employee then has to decide between spending hundreds of thousands of dollars in legal fees fighting a lawsuit from the former employer or simply giving up

We saw this just the other day on HN. I've seen it happen to friends and colleagues.

Best thing to do: no side projects. If you have those ambitions, work as a contractor. The legal agreements are much more rational. You get paid for the hours you bill and are allowed to do any work you want outside of your billable time.

I presume you're referring to Smule suing Shred, which I think has gotten so much attention (deservedly) because it's so rare. Off the top of my head I can't think of another such example, but I can think of scores of side projects turned into companies, including my own, without employer interference.

You should take precautions of course--read inventions agreements very carefully--but I wouldn't at all go so far as to only do contracting. Especially if you live in California, as others have noted. Half the companies in SV were started by people working at Google or Facebook.

You're right, there are plenty of examples where that didn't happen. However, I've seen enough examples where it has. Enough that I think it's a bad idea to do side projects while you have full time employment. Unless those projects are strictly volunteer efforts for which you have no intention of turning into a commercial business.

> A scenario I've seen play out multiple times:

The salient details your scenario omits:

1. A lot of employees create side projects related to their employer's business and/or R&D activities. These are not subject to 2870's protections.

2. A lot of employees make the mistake of working on the side project during work hours or using their employer's equipment. Most employees who get caught up in these types of disputes claim they didn't work on the side project during work hours or using the employer's equipment but far fewer can make it through discovery with such a claim intact. There really is no wiggle room on this and one slip up can spell doom.

> We saw this just the other day on HN.

Assuming you're referring to Shred, no, we didn't. The matter there does not relate to a side project, although you can be sure that Smule will use discovery to look for evidence that its former employees were working on their idea before they left its employ.

You can read the actual claims at http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APP....

> Best thing to do: no side projects.

This is the best advice as far as side projects with commercial ambition or potential are concerned.

The primary point of my post was that the law doesn't actually matter in practice. Regardless of if your points 1 and 2 are demonstrably false (thus the person is protected by 2870), someone trying to commercialize a side project (or a project started immediately after quitting a full time job like Shred) may very well see it die because of an aggressive previous employer.

Thus my closer: when you are a full time employee, don't do side projects that you have ambitions to commercialize.

The law absolutely matters in practice. Playing by the rules never guarantees that you won't be sued by a former employer, but contrary to what a lot of people here seem to believe, most employers don't make a habit of suing former employees for no reason when they have no evidence.

As I wrote, a lot of former employees who get caught up in these types of disputes make claims that they can't sustain through the discovery process because let's be honest: when you're working on a commercial side project that you're excited about, it's difficult to at some point not do some work (however minor) on it during working hours or using the resources of your employer.

Finally, if you take the time to read Smule's complaint against the Shred folks, you'll see that this isn't the case of an "aggressive" former employer. Smule presents a different version of events and appears to have some legitimate questions.

Same thing happened to psd.js. But then twitpic died, so psd.js was reborn.

The devil is in the details and it's worth reading the following text closely:

Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

2870 provides a lot of protection to employees who are very careful but a lot of employees are not careful enough to meet the criteria above.

#1 is the real killer. If you work for the Googles / Apples / Facebooks of the world, basically anything involving computers is going to fall under "actual or demonstrably anticipated research or development of the employer"

How does this work when companies have an "open" culture (aka: every employee has access to most of the codebase)? Wouldn't that meant a side project you are working on is, indirectly, a...

> Result from any work performed by the employee for the employer?

Even so you can only prove that by means of copyright, patents or trademarks, collectively known as "IP" laws and in spite of popular opinion, that's a hard thing to do.

How does open access to the code base imply that side projects are work performed for an employer?