Telstra claims ideas created in Hackathon as its own for 18 months

Updated: Telstra responds with clarification

“Read the terms and conditions” is good advice for anybody, but especially if you're participating in a hackathon. Otherwise, as participants in a Telstra hackathon are finding, you might be giving up more than you intend.

Lifx engineer Jack Chen – @chendo on Twitter – has noticed that the terms in the carrier's Internet of Things challenge seem to go beyond what people might expect if they're not paying attention.

The contract (PDF) that challenge participants have to sign contains a clause which seems to the non-lawyer to go far beyond what someone might develop for the hackathon itself.

The document seems to plant Telstra's flag in a participant's development work not just during the challenge, but for the following 18 months.

For any “New IP” (as the contract puts it) developed in that period, the participant agrees to:

• Give Telstra a first right of refusal;
• Negotiate with Telstra about possible licensing;
• Not offer the IP to anyone else without Telstra having had the first refusal;
• If someone else is interested, give Telstra a chance to make a matching offer; and
• Not give anyone else an exclusive on the IP until after Telstra's said “no”.

I was gonna do @Telstra’s IoT challenge until I read the terms. They want FROF for ANY IP you develop 18 months after, which is bullshit.

— chendo (@chendo) October 27, 2015

I was gonna do @Telstra’s IoT challenge until I read the terms. They want FROF for ANY IP you develop 18 months after, which is bullshit.

— chendo (@chendo) October 27, 2015

If there is wriggle room here, it's in whether Telstra merely failed to explain what constitutes “New IP” in the agreement:

Just sign here, Doctor Faustus ... the clause in question

Does this constrain the “New IP” to IP that has some association with the challenge, or not? Vulture South has asked Telstra to comment.

Telstra should know better than this, after a 2013 hackathon at the Sydney Opera House attracted criticism for requiring participants to sign away many rights to their ideas. ®

Update: Telstra has contacted Vulture South to explain that the clause is only intended to apply to IP associated with stuff submitted for the IoT challenge. A spokesperson said in an e-mail to The Register:

"Telstra can confirm that as part of the 2015 IoT Challenge, we won't own participants' IP or get any free licensing. The participation agreement requests that Telstra is given an opportunity to license any IP developed during the challenge (New IP) for a period of 18 months following the challenge. It does not assume any kind of ownership or copyright of the IP, which remains with participants, nor does it enforce any particular licensing or royalty arrangement" (emphasis added).

Given that the Big T has more lawyers on hand than your average parliament, Vulture South reckons the need for a clarification means someone knocked the document off last thing on a Friday afternoon. ®