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I ran into the same situation when I was a practicing engineer. Before I/we signed the contract I just added a phrase to confine the scope of the agreement to any work developed during my employment and related to the scope of my engineering activities on this project. and had the HR manager and I both sign it. Legal details notwithstanding, I assumed that would sufficiently muddy the waters to keep them from going after anything I developed that they were not paying for.
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I have found that reasonable requests for changes were accommodated without much discussion.
Once you lose your pride the rest is easy.
In the end, only three things matter: how much you loved, how gently you lived, and how gracefully you let go of things not meant for you. – Buddha
Simply Elegant Designs JimmyRopes Designs
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If you ask or demand the contract be modified, you run the risk of losing the gig or being labeled a trouble maker.
I would have a casual discussion with the person in charge. And then follow up with an email saying, "Just to clarify my understanding of what we talked about this morning, I retain rights to the side project I'm working on in my spare time....Correct?"
Print and keep the email.
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I already talk about that before over the phone ...
In fact the PM just emailed me he was sorry and going to fix it soon!
So here we go, fingers crossed! 
(making only reasonable demand so far...)
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Super Lloyd wrote: making only reasonable demand so far...
As long as your demands are reasonable they will respect you for making them.
Once you lose your pride the rest is easy.
In the end, only three things matter: how much you loved, how gently you lived, and how gracefully you let go of things not meant for you. – Buddha
Simply Elegant Designs JimmyRopes Designs
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Steve Wellens wrote: If you ask or demand the contract be modified, you run the risk of losing the gig or being labeled a trouble maker.
There is no shame in asking for a contract that is equitable for all parties involved.
It is called "business acumen".
Once you lose your pride the rest is easy.
In the end, only three things matter: how much you loved, how gently you lived, and how gracefully you let go of things not meant for you. – Buddha
Simply Elegant Designs JimmyRopes Designs
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Steve Wellens wrote: ou run the risk of losing the gig or being labeled a trouble maker
Wow I have never heard of anyone losing a gig for negotiating a contract, I would consider it a basic precept to contracting that you understand and agree with the content of the contract. I regularly ask for changes to a contract if I am not comfortable with the terms.
Never underestimate the power of human stupidity
RAH
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Mycroft Holmes wrote: I have never heard of anyone losing a gig for negotiating a contract,
I was once asked to sign a thick contract that included the stipulation that I was familiar with the Foreign Corrupt Policies act. I told them I wasn't familiar with that act and it should be removed...I couldn't sign it. They agreed and promised to remove it. They encouraged me to give notice at my current job.
They sent me a new contract but there were no changes! So I never took the gig.
I did take the contract and show it to my current boss and negotiated a higher rate for myself!
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Steve Wellens wrote: I did take the contract and show it to my current boss and negotiated a higher rate for myself!
Always a good option!
Never underestimate the power of human stupidity
RAH
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I was once asked to sign a contract that had 5 "phases" in it, obviously one bigger and more complex than the other. Verbally, I should only work on phase 1 and 2 and if everything was OK we will negotiate for the other phases.
Yet the contract still showed me the 5 phases as an all or nothing situation. The only negotiation possible by the contract were the delivery times of the next phases.
I asked them to change the contract. They did change the words in the contract, but all the problems were there. I said that I couldn't sign the contract and the guy told me that a contract is only a formality, that I shouldn't care about what it says.
So I said that if it is a formality, we don't sign the contract at all. He could pay me and I will do the job.
He didn't accept that, but he insisted that I should sign the contract. He said that he needed the contract to be signed that day, that I should sign it to avoid losing the chance of doing that job and later they would fix the details.
Well, I lost the chance of working on that "amazing" contract.
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Paulo Zemek wrote: told me that a contract is only a formality
I was told exactly that about a contract similar to the OP's (i.e. they owned by soul for the duration of my employment)
I suggested that, as it was only a formality, then simply removing that clause wouldn't make any difference.
Their lawyer told them not to take it out, as others had signed it and they didn't want to have different sets of contracts (or some such rubbish) - so eventually the MD wrote me a letter confirming that any work I did on non-competitive products, outside of office hours, using my own equipment, while not on the company premises etc. etc. would not be claimed by the company.
The copy of the contract I signed had a note hand-written and dated referring to the letter!
Sometimes it's just too hard! (although it was a great job!)
PooperPig - Coming Soon
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You really need to ask a lawyer which I don't think describes most members of CP. Intellectual property law varies from country to country. In Australia your employer cannot take away your rights. They cannot apply catchall phrases to the whole of your life which interfere with your right to make a living. You may like to read this:
http://www.mondaq.com/australia/x/113188/Patent/Copyright+and+employees+Who+owns+what[^]
IMHO - I think you are able to sign this as it covers work you have done under their direction but you may like to challenge the wording.
Peter Wasser
"The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts." - Bertrand Russell
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Generally you can get away with doing work outside of your contracted hours, if you don't use the companies hardware, and the product is not in competition with whichever product/service your company provides.
Sadly you do get some companies who believe they own you when they give you a salary and will milk you for every cent you have if they find out you do anything outside of the company.
My plan is to live forever ... so far so good
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Yeah, I just want to make clear that little point of detail! 
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Super Lloyd wrote: Now I wonder, what become of my (yet unreleased) home project in those condition?
Sam Goldwyn (of MGM fame) famously said that "an unwritten contract is worth the paper it's written on." Irrespective of labour law in your country, I would get your employer's agreement in writing regarding your ownership of any IP not developed during work hours, etc.
Winning a lawsuit is nice. Not having to go to court in the first place is even better, and a damn sight cheaper.
If you have an important point to make, don't try to be subtle or clever. Use a pile driver. Hit the point once. Then come back and hit it again. Then hit it a third time - a tremendous whack.
--Winston Churchill
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I have sometimes asked such questions myself. The answer, for sparetime work yes - but no, not if: the prog is competing with the company. And again no if the prog takes off and you spend all night on it and become too tired to perform the work we pay you for.
Swedish work culture is quite reasonable and forgiving in these matters. I have no idea about the conditions Down Under... Good Luck!
Life is too shor
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Super Lloyd wrote: created by you in the course of your employments with the company.
I read that to mean you are free to do what you like outside of office hours. But, as always, you should check with your lawyer.
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Isn't it you coming to work in Sunny Brisbane?
Only I'm sure I recognise some of those words...
PooperPig - Coming Soon
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Indeed I am!
Only in one month though, working on said take over the world by storm in my spare time project right now!
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I agree that what you quote is too vague.
Here is a relevant snippet from one I signed for a contract:
This is from an agency (Employer) that got me some work at a Client of theirs:
"
Employee agrees that any inventions (whether patentable or not), discoveries, creations (including programs, whether denominated software, firmware or otherwise), and improvements thereof, that Employee may develop or create or assist in developing or creating during employment, that are along the lines of the business, work or investigations of Employer, or that result from or are suggested by any work that Employee may do for or on behalf of Employer, shall be the sole and exclusive property of the Client.
"
(I added the underlining.)
I thought I had others around, but I'm not finding them right now.
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Well, what I quoted was verbatim from the contract!
At any rate
1. they are going to modify it for all developers! 
2. QLD government has a nice and fair explanation of the meaning of the law!
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This is always a tricky one. We all want to retain our personal IP, but on the other hand the company does not want you having a great idea while doing their work and then going home and developing that for ourselves. This is a pretty standard clause in my part of the world, by the way
One company I worked for changed ownership and the new owners wanted this clause almost exactly as in yours. I started to discuss with them and found they were closed on the matter. Then I found that a number of others also were unhappy about it, so as a group we expressed our views. We had the wording changed that all personal IP prior to that date was ours, along with all IP for applications not related to the companies products.
But it gets tricky if your product is along the same lines as theirs. In that instance, who is to say if a good idea you have is for your product or as a result of work?
Do you know any others at this company? Do they also have this clause? Is the company actually open to you doing your own products?
Usually, I have found that being up front and open with employers, there will be a way to come to a compromise as long as they are reasonable. If they are not, then maybe you need to ask if you really want to work there.
Good luck.
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