Bottom line: For some time, Amazon has required employees working on game projects in their personal time to use company tools and to distribute their games on the Amazon storefront. The policy also explicitly granted Amazon ownership rights to projects created by employees externally.

A company email from Amazon Games Studios boss Mike Frazzini obtained by Bloomberg states that the company has eliminated the "draconian" rules requiring employees to hand over any intellectual property created independently during their course of employment.

"These policies were originally put in place over a decade ago when we had a lot less information and experience than we do today, and as a result, the policies were written quite broadly," stated Frazzini in the email.

The internal policies became public last month when a software engineer named James Liu, who was considering working for Amazon Games Studios, revealed his contract agreement on Twitter. The tweet has since been deleted, but not before gaming blog TechRaptor captured it verbatim.

Policy number seven states, "I grant to Amazon a royalty-free, worldwide, fully paid-up, perpetual, transferrable license to any and all of my intellectual property rights associated with the Personal Game and my Personal Game development." So, in other words, employees working on an independent game project were required to turn their IP over to Amazon free and clear.

Liu subsequently turned down the position for obvious reasons.

"If I work on machine learning at my day job, it should be fine to ask for patent rights on any ML-related work I do outside of it, but asking for copyright ownership of a video game I make on the side is absurd," said Liu. "[This policy was] the only condition that prevented me from actually accepting the position."

It is understandable and reasonable for a company to claim rights if the employee uses company resources. However, when creating their own IP in their own time without using company tools, they should retain their rights. Unfortunately, Amazon's policies were set up so that employees had to use company resources during off-hours, essentially locking them into a de facto rights forfeiture.

While the emails states that it is giving up these policies because they are outdated, the timing seem suspicious. Amazon declined TechRaptor's requests for comment when the guidelines became public. It has also not yet officially acknowledged the leaked email Bloomberg received.