Exhibit 10.1

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (“Consulting Agreement”) is entered into as of  May
15, 2006 by and between ARTISTdirect, Inc., a Delaware corporation (the
“Company”), WNT Consulting Group, a California limited liability company
(“Consulting Company”), and Eric Pulier, an individual (“Consultant”).

 

RECITALS

 

A.                                    Consultant is a member of the Company’s
Board of Directors (“Board”).

 

B.                                    Consultant currently provides consulting
services to the Company outside the scope of ordinary Board services.

 

C.                                    Consulting Company is wholly-owned by
Consultant.

 

D.                                    In order to provide for the continued
availability of Consultant’s services to the Company, the Company, Consulting
Company and Consultant have agreed to enter into this Consulting Agreement.

 

E.                                      The Company’s management considers it in
the best interests of the Company to foster the continued availability of
Consultant, and Consultant agrees to provide services to the Company and its
subsidiaries, in accordance with the terms hereof.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the parties agree as
follows:

 

1.                                      Consulting Services; Duties. During the
Term (as defined in Section 6 below), Consultant shall make himself available to
provide consulting services to the Company and its subsidiaries, as set forth on
Exhibit A. Consultant will comply with the Company’s rules and policies relating
to workplace conduct and security while at the Company’s premises. Consultant
shall not remove any property of the Company or any third party from the
Company’s premises without the prior written consent of an executive officer of
the Company.

 

2.                                      Signing Bonus; Base Compensation.

 

(a)                                  Consultant shall receive a one-time signing
bonus (“Signing Bonus”), as set forth on Exhibit A.

 

(b)                                 During the Term, Consultant’s monthly base
fee (“Base Fee”) will be as set forth on Exhibit A.

 

3.                                      Bonus. Consultant may be eligible to
receive a non-discretionary and discretionary bonus in addition to the Signing
Bonus and Base Fee, both as set forth on Exhibit A (collectively, the “Bonus”).

 

4.                                      Stock Options. Consultant agrees to
waive, and shall not be entitled to receive, any and all stock options and other
stock-based compensation granted to outside members of the Board during the
Term.

 

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5.                                      Reimbursement; Benefits.

 

(a)                                  The Company agrees to reimburse Consultant
for reasonable and necessary out-of-pocket expenses incurred during the Term
related to performance of Consultant’s duties under this Consulting Agreement,
to the extent such expenses are approved by an executive officer of the Company
in advance. Reimbursement is subject to Consultant providing the Company with
copies of satisfactory documentation in sufficient detail to allow the Company
to confirm the business nature of the expenses and to claim applicable
deductions.

 

(b)                                 Except as required by applicable law, the
Company shall have no obligation to provide any benefits to Consultant during
the Term.

 

6.                                      Term. The term (the “Term”) of this
Consulting Agreement shall commence as January 1, 2006 (the “Effective Date”)
and shall terminate on the one (1) year anniversary thereof; provided that the
Term may end earlier in accordance with Section 9 below; provided further that
the Term shall automatically renew for successive periods of one (1) year each,
unless any party delivers written notice to the other parties of its intention
not to renew the Term for such successive one (1) year period no later than
thirty (30) days prior to the commencement of any such renewal period.

 

7.                                      Rights to Works. In return for the
consideration described herein, Consulting Company and Consultant agree as
follows:

 

(a)                                  All inventions, trade secrets, ideas,
recordings, original works of authorship or other work product of any kind that
Consultant conceives, develops, discovers or makes in whole or in part in the
course or scope of his services or other engagement, and contributions thereto
(hereinafter referred to as “Work Product”) shall belong solely and exclusively
to the Company. The Company shall have the perpetual and exclusive right to use,
exhibit, distribute, or license throughout the universe, any Work Product or
part thereof in which Consultant’s services with the Company are utilized in all
forms of audio, visual, textual, digital, electronic or other distribution that
are now known or may hereafter exist, and otherwise exploit such Work Product in
such media, forums and for such uses throughout the universe as it deems
appropriate. All revenues derived by the Company from the use, exhibition,
distribution, licensing, or other exploitation of such Work Product shall be the
sole and exclusive property of the Company.

 

(b)                                 To the extent that Work Product is
considered: (i) a contribution to collective works and/or (ii) a part or
component of audiovisual works, the parties hereby expressly agree that  Work
Product shall be considered “works made for hire” under the United States
Copyright Act of 1976, as amended (17 U.S.C. Section 101 et seq.). In accordance
therewith, the sole right of copyright in and to the Work Product shall belong
exclusively to the Company in perpetuity. To the extent that the Work Product is
deemed a work other than a contribution to a collective work and/or a part or
component of an audiovisual work, Consultant hereby irrevocably assigns and
transfers to the Company to the maximum extent permitted by law all right, title
and interest in the Work Product, including but not limited to, all copyrights,
patents, trade secret rights, and other proprietary rights in or relating to the
Work Product. At the Company’s reasonable written request and sole expense,
Consultant shall execute, verify, acknowledge, deliver and file any and all
formal assignments, recordations and any and all other documents that the
Company may prepare to give effect to the provisions of this Consulting
Agreement. In furtherance of the foregoing, Consultant hereby and irrevocably
constitutes and appoints the Company, with full power of substitution, to be
Consultant’s true and lawful attorney, in his name, place, and stead, to
execute, acknowledge, swear to, and file all instruments, conveyances,
certificates, agreements, and other documents, and to take any action which may
be necessary or appropriate to effect the provisions of

 

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this Section 7. The powers of attorney granted herein shall be deemed to be
coupled with an interest and shall be irrevocable.

 

(c)                                  It is understood that the rights granted to
the Company in this Section 7 shall continue in effect after the termination or
expiration of this Consulting Agreement and when Consultant is no longer a
member of the Board.

 

(d)                                 All provisions of this Consulting Agreement
relating to the assignment by Consultant of any invention or innovation are
subject to the provisions of California Labor Code Sections 2870, 2871 and 2872.
In accordance with Section 2870 of the California Labor Code, the obligation to
assign as provided in this Consulting Agreement does not apply to an invention
or innovation that Consultant developed entirely on his own time without using
the Company’s equipment, supplies, facilities, or trade secret information
except for those inventions that either: (i) relate to either (A) the business
of the Company or any of its subsidiaries at the time of conception or reduction
to practice of the invention, or (B) actual or demonstrably anticipated research
or development of the Company or any of its subsidiaries; or (ii) result from
any work performed by Consultant for the Company or any of its subsidiaries. A
copy of California Labor Code Sections 2870, 2871 and 2872 is attached to this
Consulting Agreement as Exhibit B.

 

(e)                                  Consultant shall disclose all inventions
and innovations to the Company, even if he does not believe that he is required
under this Consulting Agreement, or pursuant to California Labor Code Section
2870, in order to assign his interest in such invention or innovation to the
Company. If Consultant and the Company disagree as to whether or not an
invention or innovation is included within the terms of this Consulting
Agreement, it will be Consultant’s responsibility to prove that it is not
included.

 

8.                                      Covenant Not to Compete or Solicit.

 

(a)                                  Beginning on the date hereof and ending on
the earlier of: (i) April 1, 2007, or (ii) the date of termination of
Consultant’s services with the Company by the Company (the “Non-Competition
Period”), Consulting Company and Consultant shall not (other than on behalf of
the Company), without the prior written consent of the Company, engage in a
Competitive Business Activity (as defined below) anywhere in the Restricted
Territory (as defined below). For all purposes hereof, the term “Competitive
Business Activity” shall mean: (i) engaging in, or managing or directing persons
engaged in any business in competition with the Company’s MediaDefender, Inc.
anti-piracy services; (ii) acquiring or having an ownership interest in any
entity that derives revenues from any business in competition with the
Competitive Business Activity (except for passive ownership of three percent
(3%) or less of any entity whose securities are publicly traded on a national
securities exchange or market or five percent (5%) or less of any entity whose
securities are not publicly traded on a national securities exchange or market);
or (iii) participating in the operation or control of any firm, partnership,
corporation, entity or business (each, an “Entity”) described in clause (ii) of
this sentence; provided, however, that Consulting Company or the Consultant
shall not be deemed to be engaging in a Competitive Business Activity solely
because Consulting Company or the Consultant is employed by, or serves as an
independent contractor to, an Entity that engages in a Competitive Business
Activity if (i) Consulting Company or the Consultant is employed in, serves as
an independent contractor to or is otherwise associated with a division of such
Entity other than the division engaged in a Competitive Business Activity (a
“Competing Division”) or (ii) the Consulting Company or the Consultant does not
provide technical, marketing or other assistance to a Competing Division. For
all purposes hereof, the term “Restricted Territory” shall mean in any State of
the United States of America, or in any foreign country in which the Company or
an affiliate or subsidiary of the Company is conducting such Competitive
Business Activity.

 

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(b)                                 During the Non-Competition Period, neither
Consulting Company nor Consultant shall solicit, encourage or take any other
action which is intended to induce or encourage, or could reasonably be expected
to have the effect of inducing or encouraging, any employee of the Company or
any of its subsidiaries to terminate his or her employment with the Company or
its subsidiaries; provided, however, that any general solicitation of employees
not specifically targeted to the Company’s employees shall not be deemed a
violation of this Section 8(b).

 

(c)                                  The covenants contained in Section 8(a)
hereof shall be construed as a series of separate covenants, one for each
country, province, state, city or other political subdivision of the Restricted
Territory. The parties acknowledge that the Competitive Business Activity is and
will be national and international in scope and thus the covenants in this
Section 8 would be particularly ineffective if the covenants were to be limited
to a particular geographic area of the United States. If any court of competent
jurisdiction at any time deems the Non-Competition Term unreasonably lengthy, or
the Restricted Territory unreasonably extensive, or any of the covenants set
forth in Section 8 not fully enforceable, the other provisions of Section 8, and
this Consulting Agreement in general, will nevertheless stand and to the fullest
extent consistent with law continue in full force and effect, and it is the
intention and desire of the parties that the court treat any provisions of this
Consulting Agreement which are not fully enforceable as having been modified to
the extent deemed necessary by the court to render them reasonable and
enforceable and that the court enforce them to such extent (for example, that
the Restricted Term be deemed to be the longest period permissible by law, but
not in excess of the length provided for in Section 8(a), and the Restricted
Territory be deemed to comprise the largest territory permissible by law under
the circumstances, but not in excess of the territory provided for in
Section 8(a)).

 

9.                                      Termination.

 

(a)                                  The Company shall have the right, upon
written notice to Consulting Company and Consultant, to immediately terminate
this Consulting Agreement and Consultant’s services with the Company for
“Cause.”  Upon such termination, Consultant will have no further right to
compensation under Section 2 or Exhibit A other than any such amounts of Base
Fee that have accrued but have not been paid at the date of termination, payment
of the Non-Discretionary Bonus (to the extent such payment is provided for in
Exhibit A) and payment of any unpaid portion of the Signing Bonus. For purposes
of this Consulting Agreement only, “Cause” shall mean the determination by the
Company in the exercise of its sole discretion, of any of the following: 
(i) Consultant’s financial dishonesty, including, without limitation,
misappropriation or embezzlement of the funds or property of the Company or any
subsidiary or affiliate, falsification of any Company or subsidiary of affiliate
documents or records or any unauthorized attempt by Consultant to take any
business or business opportunities of the Company or any subsidiary or affiliate
for Consultant’s own personal gain; (ii) Consultant’s unauthorized or improper
use or disclosure of the Company or any subsidiary or affiliate’s confidential
or proprietary information; (iii) any action by Consultant that has or is
reasonably likely to have a material detrimental or adverse effect on the
Company or any subsidiary or affiliate’s reputation, business or prospects; (iv)
Consultant’s failure or inability to perform any material duties contemplated by
this Consulting Agreement; (v) negligent, reckless or willful misconduct in
performance of Consultant’s duties; (vi) any material breach by Consultant of
any agreement between Consultant and the Company or any subsidiary or affiliate;
(vii) Consultant’s conviction (including any plea of guilty or nolo contendere)
of any felony or the commission of any other material act or material omission
involving dishonesty, disloyalty or fraud with respect to the Company, its
subsidiaries or affiliates, any customer, supplier or other material business
relations; or (viii) a material violation by Consultant of the Company policies,
including, without limitation, policies on prohibition of unlawful harassment
and insider trading.

 

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(b)                                 The Company shall have the right to
terminate this Consulting Agreement and to terminate Consultant’s services with
the Company after the occurrence, and during the continuance, of any
“Disability” upon thirty (30) days written notice to Consulting Company and
Consultant. For purposes of this Consulting Agreement only, “Disability” means
Consultant’s incapacity to perform the essential functions of his duties with or
without reasonable accommodation as required hereunder for sixty (60) days or
more within any period of one hundred eighty (180) consecutive days because of
mental or physical condition, illness or injury, consistent with applicable
state and federal law. In the event of any dispute regarding the existence of
Consultant’s Disability, the matter shall be resolved by the determination of a
physician qualified to practice medicine in the State of California, selected by
the Company and reasonably approved by Consultant. For this purpose, Consultant
will submit to appropriate medical examinations.

 

(c)                                  This Consulting Agreement shall
automatically terminate upon the event of Consultant’s death.

 

10.                               Consultant’s Tax Obligations;  Insurance
Coverage. All fees, compensation, payments and other benefits payable or
provided under this Consulting Agreement shall be construed to include local,
state or federal sales, use, excise, personal property or other similar taxes or
duties, and any such taxes shall be assumed and paid for by Consultant.
Consultant shall be solely responsible for and shall make proper and timely
payment of any withholding or other taxes, such as Consultant’s estimated state
and federal income taxes, employment taxes and self-employment taxes. Consulting
Company shall maintain appropriate insurance coverage, as may be required by
applicable law, in each case, for the benefit of Consultant. Consultant will
indemnify and hold the Company harmless from and against any and all claims,
damages, liabilities, losses, costs and expenses, including, without limitation,
legal expenses and reasonable counsel fees, relating to any breach, or any
allegation which if true would evidence a breach, by Consultant of any warranty,
representation or agreement made by Consultant in this Consulting Agreement.

 

11.                               Securities Laws; Insider Trading Policies.

 

(a)                                  Consultant agrees to comply with all
provisions of the securities laws of the United States, including, but not
limited to Section 16 of the Securities Exchange Act of 1934, as amended.

 

(b)                                 To the extent Consultant resigns from the
Board during the Term, Consultant agrees that he shall execute a mutually
agreeable confidentiality agreement which shall prohibit, among other things,
disclosure by Consultant of confidential information pertaining to the Company
in violation of Regulation FD.

 

(c)                                  Consultant agrees to comply with all
provisions of the Company’s insider trading policy.

 

12.                               Equitable Relief. Consulting Company and
Consultant acknowledge that any breach or threatened breach by Consulting
Company or Consultant of the provisions of Sections 7 or 8 of this Consulting
Agreement will result in immediate and irreparable to the Company, for which
there will be no adequate remedy at law, and that the Company will be entitled
to equitable relief to restrain Consulting Company and Consultant from violating
these Sections, and/or to compel Consulting Company and Consultant to perform
its obligations thereunder, without posting bond or other security.
Notwithstanding anything contained herein to the contrary, the parties shall be
entitled to seek a temporary restraining order for alleged an alleged breach or
threatened breach of Sections 7 or 8 of this Consulting Agreement pursuant to
California Code of Civil Procedure Section 1281.8.

 

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13.                               Complete Agreement; Amendment; Waiver. This
Consulting Agreement is the complete agreement and understanding between the
parties with respect to its subject matter and supersedes any prior
understandings, agreements or representations, written or oral, which may relate
to the subject matter hereof in any way. The provisions of this Consulting
Agreement may be amended or waived only with the prior written consent of the
Company, Consulting Company and Consultant, and no course of conduct or failure
or delay in enforcing the provisions of this Consulting Agreement shall affect
the validity, binding effect or enforceability of this Consulting Agreement.

 

14.                               Counterparts. This Consulting Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.

 

15.                               Successors and Assigns. This Consulting
Agreement is intended to bind and inure to the benefit of and be enforceable by
all the parties and their respective heirs, successors and assigns, except that
Consultant may not assign his rights or delegate his obligations hereunder.

 

16.                               Choice of Law. This Consulting Agreement is
made and entered into, and shall be interpreted and construed in accordance with
the laws of, the State of California.

 

17.                               Dispute Resolution. The parties agree that any
disputes related to this Consulting Agreement, or otherwise related to services
provided by Consultant to the Company, shall be submitted to binding arbitration
in accordance with the employment arbitration rules of American Arbitration
Association (“AAA”) by a single impartial arbitrator. The arbitration shall take
place in the County of Los Angeles, California, and all parties agree to submit
to the jurisdiction of the arbitrator selected in accordance with AAA’s rules
and procedures. The parties agree that the arbitration procedure provided for in
this section will be the exclusive avenue of redress for any disputes relating
to or arising from this Consulting Agreement or otherwise related to
Consultant’s service with the Company, and that the award of the arbitrator
shall be final and binding on all parties, and nonappealable. The arbitrator
shall have discretion to award monetary and other damages, or no damages, and to
fashion such other relief as the arbitrator deems appropriate, in accordance
with applicable law. The arbitrator shall also have discretion to award the
prevailing party reasonable costs and attorneys’ fees incurred in bringing or
defending an action under this provision, in accordance with applicable law. THE
PARTIES ACKNOWLEDGE AND AGREE THAT BY AGREEING TO ARBITRATE THE DISPUTES COVERED
BY THIS SECTION 17, THEY ARE WAIVING ANY RIGHT TO BRING AN ACTION AGAINST THE
OTHER IN A COURT OF LAW, EITHER STATE OR FEDERAL, AND ARE WAIVING THE RIGHT TO
HAVE CLAIMS AND DAMAGES, IF ANY, DETERMINED BY A JURY WITH RESPECT TO SUCH
DISPUTES. Notwithstanding the foregoing, the parties shall be entitled to seek a
provisional remedy, including, but not limited to, a temporary restraining order
pursuant to California Code of Civil Procedure Section 1281.8 before or during
arbitration.

 

18.                               Notices. Any notice or communication required
or permitted by this Consulting Agreement shall be deemed sufficiently given if
in writing and, if delivered personally, when it is delivered or, if delivered
in another manner, the earlier of when it is actually received by the party to
whom it is directed or when the period set forth below expires (whether or not
it is actually received):  (i) if deposited with the U.S. Postal Service,
postage prepaid, and addressed to the party to receive it as set forth below,
forty-eight (48) hours after such deposit as registered or certified mail; or
(ii) if accepted by Federal Express or a similar delivery service in general
usage for delivery to the address of the party to receive it as set forth next
below, twenty-four (24) hours after the delivery time promised by the delivery
service.

 

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IN WITNESS WHEREOF, the parties have executed this Consulting Agreement as of
the date first written above:

 

 

COMPANY:

 

 

 

ARTISTDIRECT, INC.

 

 

 

  /s/ Robert N. Weingarten

 

 

By:

Robert N. Weingarten

 

Its:

Chief Financial Officer

 

Address:

1601 Cloverfield Boulevard, Suite 400 South

 

 

Santa Monica, California 90404-4082

 

 

 

 

 

CONSULTING COMPANY:

 

 

 

 

 

WNT Consulting Group, LLC

 

 

 

 

 

  /s/ Eric Pulier

 

 

By:

Eric Pulier

 

Its:

Director

 

Address:

12366 Ridge Circle

 

 

Los Angeles, CA 90049

 

 

 

CONSULTANT:

 

 

 

 

 

  /s/ Eric Pulier

 

 

Eric Pulier

 

Address:

12366 Ridge Circle

 

 

Los Angeles, CA 90049

 

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Exhibit A

 

Duties:

 

Consultant will provide consulting and advisory services outside of the ordinary
course of what is provided by other members of the Company’s Board (excluding
the Company’s employee directors), with respect to the business and operations
of the Company and its subsidiaries (including MediaDefender, Inc.). Specific
duties will be as mutually determined by Consultant and the Company’s Chief
Executive Officer.

 

 

 

 

 

Consultant shall report directly to the Company’s Chief Executive Officer, Chief
Operating Officer and President, subject to modification by the Company’s Chief
Executive Officer. Senior executive officers of MediaDefender, Inc. shall be
entitled to contact Consultant directly and to request any information, work
product or other business ideas or strategies generated by Consultant during the
Term.

 

 

 

Signing Bonus;
Base Fee:

 

Signing Bonus equal to $50,000, payable in equal installments of $25,000 in the
third and fourth fiscal quarter of 2006.

 

 

 

 

 

Commencing as of the Effective Date, monthly payments equal to $10,000. Such
payments shall commence on June 1, 2006 and all amounts accrued for services
rendered since the Effective Date shall be paid to Consultant on or prior to
December 31, 2006.

 

 

 

Non-Discretionary
Bonus:

 

So long as Consultant has continued to provide consulting services through such
date in accordance with the Consulting Agreement, a $25,000 Bonus payable on
December 31, 2006, unless Consultant unilaterally exercises termination right
under Section 6 of the Consulting Agreement.

 

 

 

 

 

The Non-Discretionary Bonus (if earned and payable) shall be paid on the
ninety-first (91st) day following the end of the Company’s then current fiscal
year end (e.g., April 1).

 

 

 

Discretionary

 

Consultant may be entitled to Discretionary Bonus amounts, as set forth below:

Bonus:

 

 

 

 

A. $50,000- For successful organization of artist managers and legal
representation to educate the sector on incorporating anti-piracy clauses in
artist contracts.

 

 

 

 

 

B. $50,000- For successful organization of industry advisory board, and for a
Company executive officer or Consultant taking a personal leadership role in
running the advisory board meetings toward the creation of end-state
requirements.

 

 

 

 

 

C. $50,000- For successful creation of a joint venture for the Company with
Beverly Hills Film Festival (“BHFF”) to create the BHFF online, leveraging the
existing infrastructure of the UBL website.

 

 

 

 

 

D. $50,000- For successful creation of a database technology for the Company
that can review massive amounts of peer-to-peer activities to deduce trends and
predict popularity of upcoming music artists—virtual A&R.

 

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For Consultant to be eligible to receive the Discretionary Bonus amounts
referenced above, Consultant must be actively involved in the creation and
execution of strategies necessary for the Company to achieve items A-D above, as
applicable. Any discretionary bonus amounts earned during the Term shall be paid
on the thirtieth (30th) day following achievement, but shall remain subject to
final approval by the Compensation Committee of the Board, upon consultation
with the Company’s Chief Executive Officer.

 

 

 

Form of
Compensation:

 

The Signing Bonus and Base Fee referenced above will be paid by the Company in
cash; however, up to fifty percent (50%) of the Signing Bonus and Base Fee may
be paid in such other form as mutually agreed to by Consultant and the Company.

 

 

 

 

 

All Bonus amounts referenced above shall be payable in cash or such other form
as mutually agreed to by Consultant and the Company.

 

 

 

 

 

Any issuances of the Company’s common stock made in lieu of cash compensation
will be based on the closing sales price of the Company’s common stock on the
date of such issuance (which date will generally occur during the four week
“window” periods following the publication of the Company’s quarterly and annual
financial results).

 

 

 

 

 

If the Company determines it to be reasonably necessary, the Company may defer
any cash payments owed pursuant to this Consulting Agreement for a period of up
to ninety (90) days.

 

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Exhibit B

 

California Labor Code Sections 2870, 2871 and 2872

 

SECTION 2870

 

(a)                                  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:

 

i.                                          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

 

ii.                                       Result from any work performed by the
employee for the employer.

 

(b)                                 To the extent a provision in an employment
agreement purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a), the provision
is against the public policy of this state and is unenforceable.

 

SECTION 2871

 

No employer shall require a provision made void and unenforceable by Section
2870 as a condition of employment or continued employment. Nothing in this
article shall be construed to forbid or restrict the right of an employer to
provide in contracts of employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee’s inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full
title to certain patents and inventions to be in the United States, as required
by contracts between the employer and the United States or any of its agencies.

 

SECTION 2872

 

If an employment agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her employer, the employer must also, at the
time the agreement is made, provide a written notification to the employee that
the agreement does not apply to an invention which qualifies fully under the
provisions of Section 2870. In any suit or action arising thereunder, the burden
of proof shall be on the employee claiming the benefits of its provisions.

 

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