Assignment of Employee Inventions State Laws Chart: Overview | Practical Law

assignment of rights in invention

Assignment of Employee Inventions State Laws Chart: Overview

Practical law practice note overview 4-582-6485  (approx. 14 pages).



Intellectual property update.

In 2011, the U. S. Supreme Court held that a present assignment by a Stanford University faculty member to a company where he was consulting was effective despite an earlier promise to assign in the employment agreement between Stanford University and the faculty member. In other words: “I assign” beats “I will assign”.  Bd of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Systems Inc. , 563 U.S. 776 (2011).

When the assignment is effective is a key issue to address in the contract language. Because the owner of a patent is initially the inventor, only the inventor has standing to sue for patent infringement without an assignment. Rights granted in the employment agreement using “passive verbs in the indefinite or future tense” require a subsequent assignment.  Omni Medsci, Inc. v. Apple Inc ., ___ F.3d ___ (Fed. Cir. August 2, 2021) (a provision stating patents “shall be the property of the University” was not an automatic assignment and as such required a subsequent assignment to effectuate the transfer).  

Consequently, language such as “employee hereby assigns” should replace “employee shall assign”  in employment contracts ( link ).

What post-employment inventions can be assigned  is a second key issue recent cases have identified.

Employee Alleshouse assigned to his employer  

“all inventions, improvements, developments . . .or patentable material that Employee conceives or hereafter may make or conceive . . . resulting from or suggested by Employee’s work for the Company . . . .”

The assignment language included inventions conceived after employment terminated. Using no confidential information of the former employer, Alleshouse conceived and patented post-employment inventions. The successor in interest to the former employer sued seeking an assignment of the patents. Applying a California statute protecting employees [1] , the Court found the broad assignment language void. The obligation to assign inventions conceived after the employee’s departure was held to function as an unlawful non-compete.  Whitewater West Industries, Ltd. v Alleshouse , 981 F.3d 1045 (Fed. Cir. 2020).

A subsequent International Trade Commission case (applying California law) interpreted an assignment of all

“inventions (including new contributions, improvements, designs, developments, ideas, discoveries . . . ) which I may . . . conceive, develop or reduce to practice during  the period of my employment . . . .”

The “inventions” (and in a later version, “intellectual property”) language was interpreted as limiting the assignment to “subject matter that itself could be protected . . .  before  the termination of employment.” Patent rights could not exist “until at least conception of that invention.” In this case the conception date was after termination. So the assignment language did not include “ideas . . . contributing to a post- employment patentable invention”.  Bio-Rad Laboratories Inc. v. ITC , ___ F.3d ___ (Fed. Cir. April 29, 2021),  petition for rehearing pending . [2]

The court’s narrow reading of the assignment language requiring the invention to be conceived before termination of employment avoided the need to apply the California statutes discussed in  Alleshouse . [3]  Consequently, cases not subject to the California statutes are subject to the same limiting construction if they use comparable language regarding assignment of “inventions” or “intellectual property”.

As the law is developing, employee patent assignments should (and if California law applies, must) be reviewed to confirm a straightforward reading (1) creates a present assignment, and (2) reasonably limits the assignment of post-employment inventions, most conservatively to inventions (a) conceived during employment or (b) made using the former employer’s trade secrets.

[1]  California Business and Professions Code §16600 voids any contract restraining lawful trade of any kind. California Labor Code §2870 (a) limits an employee agreement to assign to only certain inventions. The court found the contract duty to assign was void as a substantial restraint on the former employee and §2870 did not approve assignments of post-employment inventions.

[2]  The court specifically noted: “We do not deem a mere joint inventor’s contribution to a post-agreement conception sufficient”. Bio-Rad argues in the petition for rehearing that this was error.

[3]  The court referred to the California statutory limitation on assignments as a “confirmatory reason” for the court’s “straightforward reading”.

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How to Draft an Invention Assignment Agreement

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.


In the fast-paced world of technology, an invention assignment agreement is a key document for any inventor, entrepreneur or business owner. It provides legal protection and ensures that inventors receive a fair return on their inventions. But what exactly is an invention assignment agreement and why do entrepreneurs and business owners need one?

An invention assignment agreement is a legally binding contract that assigns ownership of an invention to another party, such as an employer or investor. The Agreement outlines the inventor’s rights and duties with regards to the use of their intellectual property while protecting them from theft or infringement by other parties. Furthermore, it clearly outlines payment terms, including any royalties or bonuses due to the inventor for their work. Having an Invention Assignment Agreement in place grants inventors peace of mind that their hard work will be rewarded fairly - something which can be invaluable when trying to succeed in the competitive technological landscape.

Business owners too should understand the importance of having a well-drafted Invention Assignment Agreement at hand as it can provide assurance that investments are adequately protected and secure from intellectual property theft. This can be crucial for entrepreneurs wanting to ensure long-term business success without facing costly legal disputes further down the line.

For anyone needing assistance creating an Invention Assignment Agreement, Genie AI offers a comprehensive resource to help you get started with drafting your own legally binding documents - all without paying a lawyer! Genie AI’s open source legal template library harnesses millions of data points to show you what constitutes market standard agreements; allowing users to customize high quality documents in minutes – saving both time and money! Our step-by-step guidance provides all the information needed on how to access our library today so you can get your project off to a strong start - all without needing a Genie AI account! So if you’re looking for reliable advice on how best tackle your next big venture - read on!

Definitions (feel free to skip)

Scope of Assignment – The range and limits of what is being assigned. Inventor – The person who creates or discovers something new. Assignee – The person or organization to whom something is assigned. Trade Secret – Information not generally known that gives a business an advantage over its competitors. Patent Application – A request to the government for permission to make, use, or sell an invention. Trademark – A distinctive word, phrase, symbol, or design used to identify a product or service. Copyright – A legal right that grants the creator of an original work exclusive rights to its use and distribution. Description of Invention – A detailed explanation of the features and functions of an invention. Rights of Assignment – The rights given to the assignee, such as the right to use, manufacture, reproduce, or sell the invention. Payment Terms – The amount and timing of payments made as part of the assignment. Confidentiality Clause – A clause that prohibits the assignee from disclosing any confidential information relating to the invention. Warranties – A guarantee that the inventor has the legal right to assign the invention to the assignee. Disclaimers – A statement that denies or limits a party’s legal responsibility. Legal Remedies – Ways of seeking legal enforcement of a contract, such as money damages or injunctive relief. Duration – The length of time that the agreement is in effect. Termination – The ending of the agreement. Notices – Written communication from one party to another. Dispute Resolution – The process of settling a disagreement between two parties. Governing Law – The set of laws that applies to a particular agreement. Jurisdiction – The authority of a court or other legal body to interpret and enforce the law. Sign and Date – To physically write one’s name and the date on a document to show agreement.

Define the scope of the assignment

Identify the inventor and assignee, draft a description of the invention, establish agreement on the assignment of rights to the assignee, set payment terms, include a confidentiality clause, include warranties and disclaimers, specify legal remedies, address duration and termination of the agreement, outline requirements for notices, including dispute resolution, clarify governing law and jurisdiction, sign and date the agreement, make copies of the agreement for each party, get started.

  • Determine what invention is being assigned
  • Identify who the inventor and assignee are
  • Outline the scope of the assignment and what rights the assignee will be granted
  • Specify the geographical area where the invention will be used
  • Draft language for the assignment that includes the scope and rights of the assignee
  • Review the language with both the inventor and assignee to make sure that everyone is in agreement

When you can check this off your list: When you have drafted the language for the assignment and both the inventor and assignee have reviewed and agreed to the language.

  • Find out who the inventor is, and who the assignee (the person or company receiving the assignment) is
  • Make sure the inventor and assignee are clearly identified in the agreement
  • When the inventor and assignee have been clearly identified, you can move on to the next step of drafting a description of the invention.
  • Include a detailed description of the invention, including relevant drawings, diagrams, and other relevant materials.
  • Differentiate the invention from prior art if applicable.
  • Identify the patent application number and filing date if the invention is already filed.
  • If there is more than one inventor, make sure all inventors have agreed to the assignment.
  • When the description is complete, you should have a clear understanding of the invention, who owns it and what is being assigned.

Once the description of the invention is complete, you can move on to the next step of establishing agreement on the assignment of rights to the assignee.

  • Draft a clear agreement specifying the rights being assigned to the assignee
  • Include details such as the scope of the rights, the geographic region and term of the assignment
  • Make sure the assignee is aware that the invention must be kept confidential
  • Include a clause which states that the assignee will not attempt to register the invention in any other country
  • Add a clause that the assignor will defend any claims made against the assignee in relation to the invention
  • Have both parties sign the agreement

You will know you are done with this step when you have completed the agreement, both parties have signed it, and the assignor and assignee have a copy of the agreement.

  • Determine the payment method for the assignor in exchange for assigning the rights.
  • Agree on a total sum for the payment or a payment plan.
  • Include payment details in the agreement, such as the date of payment and any interest rates or fees.
  • Have both the assignor and assignee sign off on the payment terms.

When this step is complete, the payment terms in the agreement should be agreed upon and documented in the agreement.

  • Explain what a confidentiality clause is and why it’s important
  • Identify the parties to the agreement, and include a definition and scope of confidential information
  • Set out the duration of the confidentiality obligation
  • Specify the permitted uses of confidential information
  • Outline the remedies available to the parties in the event of a breach
  • Include a clause permitting the parties to disclose confidential information to their advisors
  • When complete, the confidentiality clause should provide a legally binding agreement between the parties that protects the confidential information disclosed
  • When done, you can check this off your list and move on to the next step which is to include warranties and disclaimers.
  • Include a clause in the agreement that states the assignor warrants that it owns the invention and has the right to assign it to the assignee
  • Include a clause that the assignor has not previously assigned the invention to anyone else
  • Include a clause that the assignor has not made any other agreement regarding the invention that would conflict with the assignment
  • Include a disclaimer that the assignee is not receiving any implied warranties or guaranties with the assignment
  • Include a clause that the assignor will indemnify the assignee in the event of any third-party claims
  • Once you have included these warranties and disclaimers in the agreement, you can check this step off your list and move on to specifying legal remedies.
  • Identify the legal remedies that each party would have if the other party breaches the agreement
  • Consider what remedies are available in your jurisdiction and which are most appropriate for the situation
  • Include remedies such as specific performance, liquidated damages, or other equitable relief
  • Specify that the non-breaching party shall be able to seek all available remedies, including but not limited to damages and/or injunctive relief
  • Indicate that the non-breaching party shall be entitled to recover all costs, including attorney fees, incurred in enforcing the agreement
  • When complete, you can proceed to the next step, which is addressing duration and termination of the agreement.
  • Determine the effective date of the agreement.
  • Decide the duration of the agreement, including any applicable renewal options.
  • Specify the circumstances under which the agreement can be terminated.
  • Include provisions for either party to terminate the agreement with a certain amount of notice.
  • Outline a timeline for any payments that need to be made upon termination.

Once you have determined the effective date, duration, termination, notice and payment requirements, you can check this step off your list and move on to the next step of outlining requirements for notices, including dispute resolution.

  • Identify the parties to the agreement and their contact information
  • Specify who will send and receive notices
  • Outline the process for dispute resolution (e.g. arbitration, litigation)
  • Establish a timeframe for notices to be sent and received
  • Include language about compliance with applicable laws
  • Include a clause that allows the parties to modify or amend the agreement
  • Include a clause that allows the parties to assign their rights and obligations
  • When complete, review the agreement and make sure it is legally sound
  • When complete, sign and date the agreement
  • When complete, get the agreement notarized, if required
  • Identify the governing law of the agreement and the jurisdiction in which it will be interpreted and enforced
  • Include the applicable state or country’s laws into the agreement
  • Specify the court or other dispute resolution forum where any dispute or claim arising out of the agreement can be litigated
  • Confirm that both parties agree to be bound by the governing law and jurisdiction chosen
  • Once the governing law and jurisdiction is clarified, you can move on to the next step: signing and dating the agreement.
  • Have both parties sign the agreement and include the date
  • Make sure both parties include a witness to the agreement
  • Have each party keep a copy of the signed agreement
  • When done, you can check this off your list and move on to making copies of the agreement for each party.
  • Ensure you have enough copies of the agreement for all parties
  • Make sure to print out all copies of the agreement
  • Make sure to provide copies for all parties to the agreement
  • Once all parties to the agreement have a copy, you can check this off your list and move on to the next step.

Q: What are the differences between a US, UK and EU Invention Assignment Agreement?

Asked by Abigail on June 5th 2022. A: An Invention Assignment Agreement is an agreement between two parties, typically an employer and an employee, whereby the employee assigns all rights in any invention made during the course of their employment to the employer. The differences between US, UK and EU Invention Assignment Agreements mainly come down to the laws of the particular jurisdiction where the agreement is being used. US laws on invention assignment agreements are found in Title 35 of the United States Code, which covers patent law. In the UK, patent law is covered by The Patents Act 1977, while in the EU it is covered by Regulation (EU) No 1257/2012. Each jurisdiction will have different requirements for an Invention Assignment Agreement, so it is important to ensure that you are familiar with the laws of your jurisdiction when drafting an agreement.

Example dispute

Suing a company for breach of an invention assignment agreement.

  • Plaintiff should be able to provide evidence of the invention assignment agreement between the parties, as well as any other relevant documents and communications.
  • Plaintiff should be able to demonstrate that the terms of the agreement have been breached, e.g. by showing that the defendant has failed to pay royalties or has used the invention without permission.
  • Plaintiff may be able to request an injunction against the defendant, requiring them to stop using the invention and/or pay back royalties.
  • Plaintiff may be able to claim damages for any losses suffered as a result of the breach, for example, lost profits or other financial harm.
  • Plaintiff may be able to negotiate a settlement including a payment from the defendant in exchange for dropping the suit.

Templates available (free to use)

Confidential Information And Invention Assignment Agreement Confidentiality And Invention Assignment Agreement Employee Invention Assignment Agreement Invention Assignment Agreement

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assignment of rights in invention

Intellectual property assets are the lifeblood of many businesses today. No employer wants to see those assets walk out the door when an employee leaves. Employee invention assignment agreements are one crucial tool for protecting intellectual property, but the laws governing them contain traps for the unwary. If the agreement is too narrow or ambiguous, it may allow inventions to slip away. Further, if the agreement fails to include certain provisions, it may be invalid in certain states.

The two most significant forms of employee-created intellectual property are patentable inventions and copyrightable works. The default rules for these creations are polar opposites. While copyrights are presumptively property of the employer, inventions are presumptively property of the  employee.  Invention assignment agreements are therefore necessary to ensure the employer obtains all of the rights to the greatest possible scope of its employees’ creations.

At least nine states have enacted statutes governing employee invention assignment agreements. Seven of those states – California, Delaware, Illinois, Kansas, Minnesota, North Carolina, and Washington – have nearly identical requirements. For example, California Labor Code § 2870 provides:

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.

The California statute and others also typically require the employer to notify the employee that the invention assignment agreement does  not  apply to an invention that does not qualify as the employer’s invention under the statute.

Making matters even more complicated, Nevada and Utah have unique variants of these statutes. Nevada Stat. § 600.500 makes patentable inventions presumptively the property of the employer. Utah Code § 34-39-1, et seq., by contrast, creates clear lines between “employment inventions” that are owned by the employer and inventions created on an employee’s own time that are not.

As a general rule, invention assignment agreements should be drafted to include language that mirrors the requirements of the seven states identified above because that will ensure the agreement is enforceable in those states and most others. Variations can be drafted for Nevada, Utah and any other states that may enact unique restrictions.

Agreements should also be drafted to encompass the widest range of intellectual property possible. In addition to inventions, conceptions, discoveries, improvements, and original works of authorship, the agreement should include an assignment of “know-how” and “ideas” learned or created by the employee while employed.

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Patent Assignments in Employment Agreements – a Sometimes Overlooked, but Always Important Component

  • November 16, 2021

By: Peter C. Lando and Thomas P. McNulty

By: Thomas McNulty and Peter Lando, with assistance from summer intern Tyler Gruttadauria

Businesses, of course, have a strong interest in owning intellectual property created by their employees. Intellectual property—patents, copyrights, and other confidential and proprietary information including trade secrets—is often the most valuable asset a business can own, so it is important to ensure that employee developments and inventions belong to the employer. In the United States, inventions presumptively belong to the inventor, and any transfer of ownership (“assignment”) must be in writing to be effective. Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in intellectual property created by an employee. Employers often provide employment agreements with assignment clauses that are intended to give the employer rights in inventions made by the employee during the period of employment. These assignment clauses are often treated as mere boilerplate, yet the precise wording of these clauses can have major impacts on the effectiveness and limitations of any assignment.

Ensure that you have an Assignment and not a mere promise to assign

When drafting an agreement to have an employee assign future inventions, it is vital that the language used in an assignment clause states a present-tense, actual assignment. Phrases such as “hereby assign,” “agrees to grant and does hereby grant,” or that inventions “shall belong” to the employer and employee “hereby conveys, transfers and assigns” have been deemed by the courts to be effective to transfer ownership of a future invention without the need for any subsequent agreement. Ownership effectively transfers immediately, once the invention has been made. Assignment clauses that use future tense language, on the other hand, generally will require an additional agreement to result in a transfer of ownership of the invention, and any intellectual property (“IP”) covering the invention. Terms such as “will assign,” “agree to assign,” “will be assigned,” and the like, have been found by numerous courts to constitute nothing more than a promise or contract to assign an invention in the future, but not to serve as an actual assignment.

In addition to the wording used in the assignment clause, the language of any carve-outs should also be scrutinized. Agreements may contain a carve-out clause to exclude a new employee’s prior inventions from being assigned, or to prevent assignment of inventions unrelated to the employee’s work from being swept into the assignment provision. A broad, non-specific carve-out clause may prevent an employee agreement from automatically assigning inventions of that employee, even where the assignment clause includes the proper “hereby assign” type of language, because this leaves open the possibility that an invention is not subject to the assignment clause. This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are governed by Federal Circuit law, resolution of contractual ambiguities is governed by state law, which varies considerably regarding the admissibility of such extrinsic evidence.

Failure to obtain an automatic assignment can have negative consequences

An assignment clause that is deemed ineffective to automatically transfer ownership of an invention can create significant problems for an employer. In such circumstances, a business would not have standing to bring a patent infringement suit until it has taken the necessary steps to obtain a valid assignment. This may require the filing of a breach of contract claim against the employee to require fulfillment of the contractual obligations, including execution of assignment documents. In the interim, infringers could continue practicing the invention; and if the infringing activity has gone on long enough, the six-year statute of limitations may prohibit full recovery of damages. Further, if an inventor/employee has made only a promise to assign, and instead transfers ownership to a third party who lacks knowledge of the assignment obligation, that second transfer of ownership may well prevail, leaving the original employer with no exclusionary rights at all.

Ineffective assignment provisions can affect more than just litigation. Businesses and investors typically conduct IP due diligence when entering into transactions involving the investment in or sale of IP assets, company divisions or entire entities, and any weaknesses in assignment provisions may affect the perceived value of the IP assets and/or business being considered.

Do not count on the “Hired-to-Invent” doctrine to result in ownership of employee inventions

Some employers do not require employees to sign an agreement containing an assignment of inventions because they believe that they automatically own inventions that they paid someone to create. Under the “hired-to-invent” doctrine, this will only occasionally be correct. Employees or contractors hired (and paid) specifically to create a particular invention or to solve a particular problem may be deemed to have implicitly assigned their rights in the invention to the employer. This is a highly fact-based determination, however, and applies only to inventions created in response to the specific thing the employee was hired to do. A mere title of “researcher” or even “inventor” will not, standing alone, suffice to ensure ownership of inventions by the employer. Further, until a court has ruled one way or the other, an employer relying on this doctrine will not have any certainty in its rights to the invention. Should the court rule against the employer, it would lose the exclusionary rights it believed it possessed and may face an infringement lawsuit from the employee or anyone to whom the employee may have assigned the invention/patent rights.

Absent an effective assignment, an employer may obtain limited “shop rights” in inventions made using the employer’s time, materials, facilities or equipment. Shop rights take the form of an implied license to practice the invention, precluding the employee from obtaining damages or injunctive relief on a patented invention. Shop rights are limited, however, and do not allow the employer to prevent others from competing by practicing the invention. Further, shop rights cannot be transferred via license or assignment, effectively devaluing the IP assets and, perhaps, the company.

Other Considerations

In addition to having the proper “hereby assign” language, employment contracts should ensure that inventions , rather than just patents or patent applications, are subject to the assignment clause. Language stating that all inventions, improvements, discoveries, and the like, whether or not patentable or copyrightable, are subject to the assignment, ensures that information that could be protected through other regimes, such as trade secrets, automatically become the property of the employer.

Intellectual property has taken on an ever-increasing role in determining the value of a business. A company’s ability to develop and protect its intellectual property is a key factor in its future success. Given this, it is important that businesses recognize that assignment provisions of employment agreements are not mere boilerplate, but instead may be one of the most important legal provisions that ultimately can impact not only an employment arrangement, but the value of the business itself.

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Employee proprietary information and inventions assignment agreements: what they do, and what could happen without them

The typical onboarding process for a new employee at nearly all companies in most industries includes a requirement for the employee to sign an agreement regarding confidentiality and ownership of inventions, copyrights and other intellectual property.  This article explains the purpose of such an agreement and consequences that result from a failure to have such agreements signed by each employee.

What is a PIIA?

The agreement goes by many names, but tech-savvy companies often refer to them as PIIAs (or ''Pee-as'' for short). PIIA is the acronym for the most common name for these agreements, ''proprietary information and invention assignment'' agreements.  The typical form of agreement addresses two main areas: confidentiality and ownership of intellectual property. 

The agreement requires that an employee maintain the employer's non-public and proprietary information confidential and contains language similar to what you would see in a non-disclosure agreement ( see more about non-disclosure agreements ). 

The agreement also requires that the employee agree that whatever the employee creates, discovers, develops or invents while employed with the company is owned by the company. Companies that are in the business of developing products or technology that are protectable by copyright (as is the case with most software companies) can rely on the work for hire doctrine under US copyright law, which automatically gives the employer ownership of copyrights in works of authorship ( eg , software, manuals and documentations) written or prepared by an employee within the scope of his/her employment. The work for hire doctrine, however, does not apply and ownership is not automatically vested in the employer in the case of other intellectual property rights, most notably in the case of patents (see our article providing an overview of  intellectual property rights and a more detailed discussion about  copyrights and  patents ). 

Therefore, the PIIA is the employee's agreement that everything created by the employee for the employer is owned by the employer, and if the employer needs the employee to do anything or sign any document to confirm that the employer owns all the rights in the intellectual property developments, the employee agrees in the PIIA to do so.

PIIAs will also often include non-solicitation clauses and, for those employees working in states where non-competition clauses are enforced, the agreement may also include a non-compete clause (see our article discussing  non-solicitation and non-competition clauses ).

Does the company really own everything the employee creates?

If an employee can show that he or she created intellectual property on their own time and without the use of any of the employer's facilities, equipment, supplies or trade secret information and if the intellectual property did not relate at the time of development to the employer's business or actual or anticipated research or development, then the employee would continue to own such intellectual property. 

In some states, such as California, Washington, Texas and Illinois, this exception is expressed in a statute that requires that the PIIA include a notice of the exception.  Such statutes favor the employer in that the burden of showing the exception applies is typically on the employee.

What happens if I don't have my employees sign PIIAs or if the PIIAs don't include all the bells and whistles?

Whenever a company goes through a financing, whether it is a seed round or an institutional VC round, or if the company is going to be acquired, the investors or acquirer will conduct due diligence. One of the issues that they will review is whether or not all the employees have signed PIIAs and whether or not those PIIAs require employees to assign to the company ownership of all intellectual property rights to developments created by the employee. Investors and acquirers want to make sure that the company owns its intellectual property, products and technology. 

Depending on where the company is in its lifecycle, the due diligence may focus on all employees, former and current, or it may just focus on the former and current employees that have been involved in research and development or engineering activities. (The failure of the company to obtain a PIIA from an employee strictly in an administrative capacity will generally not create a material issue). If due diligence identifies a problem with the PIIAs, or reveals that PIIAs were not signed, investors and acquirers may require that the company obtain signed PIIAs (or the equivalent) after the fact, which may necessitate the company having to pay the employees something in exchange for signing the agreement so that it is binding or, worse yet, give a former employee leverage to ask for something more. Giving someone leverage on the cusp of a financing or an acquisition may not end well for the company.

While PIIAs may seem like a routine document that is available from numerous online sources, it is essential that an employer have a form of PIIA that includes provisions that is enforceable and current and will withstand scrutiny from investor and acquirer's counsel. If you have questions about your form of PIIA, or if you want to make sure that you have forms of PIIA that will be enforceable for your employees wherever they may be located, within or outside the United States, please contact a member of our Technology, Data and Commercial practice .

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Intellectual Property: Employee Invention Laws

(This may not be the same place you live)

  With Regard to Intellectual Property, Who Owns the Invention?

Intellectual property refers to intangible property rights. Examples of intellectual property include things like:

  • Original ideas, creations, products, or works of authorship

Intellectual property can be an exceptionally large portion of a company’s value. It may be their most important asset, and they want to protect their rights to it.

Who owns an invention or creation depends on a couple of things: who invented it and the context surrounding its creation. If an invention came about as the result of an employee’s work, the invention may actually be the intellectual property of the employer, not the employee, since it was created in the context of employment. Was it a piece of work product?

What Is Work Product?

What is a pre-invention assignment of intellectual property, what is an assignment provision, what is a disclosure provision, what is a power of attorney provision, what is a holdover clause, does my employer have rights to what i invent outside of work, what if there isn’t a written employment contract, do i need a lawyer for a dispute over an employee invention.

In an employment context, the term “ work product ” refers to anything an employee creates for an employer or at their place of employment for job purposes. Some common examples of work products include clothing designs, food or beverage recipes, graphics or logos, and product formulas. If an employee develops any of the above examples or other work products specifically for an employer or to fulfill their job duties, the final work product will belong to their employer once the project is complete.

Work product clauses are typically included as part of employee-employer agreements. For example, an employment contract might contain a provision that says, “All employment-related work created by the employee during the course of employment will become the property of the employer and/or company.”

A pre-invention assignment of intellectual property is a contract, or a clause in a contract. A pre-invention clause gives the employer all of the intellectual property rights and complete control over obtaining patents, copyrights, and licenses of everything the employee creates before the employee creates them.

The employer essentially will have the absolute right to use the employee’s invention as it sees fit. The employee will have no rights to the invention since it becomes the employer’s property.

There isn’t really a standard form for pre-invention assignments, so if you have one in your employment agreement , it is important to read yours carefully. If you don’t understand the provisions in the agreement, you may want to consult an intellectual property attorney who can explain exactly how the agreement is structured and what rights you have under the agreement.

Many basic pre-invention assignments will have at least three parts:

  • An assignment of rights to inventions,
  • Disclosure of the existence of inventions, and
  • A power of attorney

Depending on the company you work for and the nature of their pre-invention agreements with employees, there may also be other provisions.

While the basic idea of the three portions of the assignment may be the same in all company contracts, their effects will vary depending on how they are written.

While an employer can’t force anyone to sign a pre-invention assignment agreement, they can refuse to hire someone who won’t sign it.

The assignment portion of the agreement requires the employee to legally transfer (or assign) all of the rights to their inventions to the employer. This clause is the most important one in a pre-invention contract because it is the one that gives all of the employee’s inventions to the employer. Assignment provisions can vary depending on how they are written, so you’ll want to carefully read this portion of your employment contract.

The disclosure clause of the agreement is important because this is how the employer will know what it owns. The employee will be required to disclose every invention they make and inform the employer of its existence.

Depending on how the agreement is drafted, the disclosure provision may be limited to work related to the employer’s actual or prospective business or any work using the employer’s resources. Some provisions may be much broader, covering anything that the employee creates during their employment, whether it is related to the company’s business or not regardless of who paid for the resources needed to craft the invention.

A power of attorney is a signed document that gives the employer the legal authority to act in place of, or on behalf of, the employee. The power of attorney provision in the pre-invention agreement allows the employer to register ownership rights without the employee’s help.

Even if the employee can help the company register the invention and apply for the patent , the power of attorney allows the employer to exercise ownership rights on its own.

Some pre-invention assignment agreements include something called a “holdover clause.” This extends the assignment provision for a period of time after employment ends.

Employers include this clause in employment contracts because they’re concerned an employee may leave the job without telling them about one or more inventions they created during their employment. Holdover clauses can be problematic. In order to be enforceable, a holdover clause must be for a specifically stated, limited period of time, and it can only apply to inventions created as a result of work done directly for the former employer.

Depending on what state’s law is involved, a holdover clause may be enforceable only if it applies to inventions created using the former employer’s trade secrets, which is an even more restrictive interpretation.

Typically, no. Usually, any projects that are pursued outside of work are the intellectual property of the individual employee. However, potential employees should take care to read the pre-invention assignment provision carefully before they sign. They may be willing to assign to the employer anything they create during work hours but be unwilling to assign inventions that are created on their own time.

If there is no written agreement, the employer could still attempt to argue that the parties agreed to assign intellectual property rights to the employer because there was an oral agreement in place. The employer may have a claim to the inventions, but this claim will be harder for them to prove if there is no written agreement. The employer would have to prove that the employee knew about this requirement before they took the job.

Whether you are an employer or an employee, it is a good idea to talk to an experienced contract lawyer who can explain how the laws in your state may affect intellectual property rights and employee ownership rules. A lawyer can review the employment agreement and help you understand the best way to protect your intellectual property.

You may also consider consulting an intellectual property lawyer to help you understand the best way to protect your intellectual property and any inventions not covered under the pre-invention agreement.

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Who owns your invention the concepts and inventions assignment clause, work-for-hire, and the shop right doctrine..

In the modern employment context, there are plenty of on-boarding documents, including a handbook, that the employee may be asked to sign as part of getting hired. Lurking in these pages of seemingly innocuous workplace policies may be critical obligations and restrictions that significantly restrict the employee’s rights. For example, non-compete and non-solicitation clauses are becoming more and more common in all industries. Also, there may be another Trojan Horse to watch for, especially in high-tech industries – the so-called “concepts and inventions assignment clause.” This clause essentially assigns all of the employee’s inventions, innovations, and discoveries that they make or create while working for the employer to the employer. And even in the absence of such a clause, the employer may claim rights as work-for-hire, or have limited rights under the “shop right doctrine.”

A “concepts and inventions clause” is a contractual obligation that is becoming increasingly standard in employment documents. It can be stand-alone, part of an employment contract, or even hidden in an employee handbook or manual. The clause gives the employer automatic and exclusive rights to inventions, conceptualizations, and other ideas created during the employer-employee relationship. The idea is that since the employer is paying the employee to dedicate 100% of his or her time to the business, and the employer is also providing the tools, space, and other means for the employee to work, the employer owns all of the fruits of the employee’s labor. The scope and breadth of the contract is up to the parties. However, some states (most notably California), limit the scope of such agreements by law. In those states, the agreement may not cover independent inventions – meaning inventions that are created on the employee’s own time without using any of the employer’s resources. For example, if an employee is a software designer, but goes home and creates a new type of mechanical circular saw in her garage during evening hours. Even if there is a general assignment clause, it likely would not be enforceable. Michigan does not have a law limiting the scope of the assignment clause/contract, which means that a Michigan employer could potentially claim rights to the new saw design, even if the invention has nothing to do with the employer.

In a high-tech context, a “concepts and inventions clause” may also list express exclusions. If Company A is hiring an inventor, the inventor would list all of the prior inventions that Company A has no rights to and the inventor retains. At the same time, the list benefits Company A because the inventor cannot later claim rights to an invention that is not on the list. Additionally, the clause (whether it is stand-alone or part of a broader employment agreement) often contains an integration clause, which prevents parties from claiming they had a side-deal or different understanding. And, there are “teeth” to provide that in case of a litigated dispute, the losing party would pay the prevailing party’s attorney fees, thereby discouraging lawsuits over ownership of an invention.

A similar situation occurs when an employer hires an employee for a specific purpose – that is to create a work-for-hire. Even without a contractual assignment clause, the employer will own the rights to any resulting invention where it is the outcome of the specific employment relationship. For example, Company A hires an engineer to invent a new chassis platform to use across Company A’s pickup truck line. The work results in a patentable invention and Company A owns 100% of the rights to the chassis. Even if the inventor did some of the work on his or her own time or otherwise made out-of-work contributions to the project, it would be considered a “work-for-hire” where the employer – or the “hirer” – owns all rights to the resulting innovation. The owner Company A is then free to license, sell, or otherwise assign the patent rights, and keep all of the profit, without providing the inventor with any additional compensation.

What about the situation where there is no “concepts and inventions clause” and there is no specific “work-for-hire” arrangement? Does the inventor always own 100% of the rights to his or her invention, even if created on company time? No, because of something called the “shop right doctrine.” The doctrine is a common-law concept (meaning it is a principle created by the courts, as opposed to the legislature). In general, the doctrine allows the employer to continue using the invention, but precludes the assignment or licensing of the invention to third-parties. In other words, the employer gets a royalty-free limited license to use the invention, but cannot sell it. The doctrine also requires that the invention be created using an employer’s resources, such as a laboratory, computer, or analytical equipment. The shop right doctrine is a defense to patent infringement that the employer can rely on if sued by the inventor – it is not an affirmative or assignable right.

What does this mean for employers and employees? If you are hiring or being hired, and anticipate the relationship may produce a valuable invention, concept, or other innovation, you should consult with an attorney to ensure your rights are protected. After-the-fact litigation is not only costly, but incredibly uncertain in outcome, and should be avoided as much as possible. As an employer, you want to make sure to have solid and well-defined assignment clauses for your employees to sign. And, because at least 9 states have statutory limitations on the scope of the assignment agreement, it is best practice to draft any assignment to be enforceable across the entire United States. As an employee, you need to make sure you are not inadvertently signing away more rights than you intend to, and are fully aware of your respective rights and obligations.

On a final note, these concepts (as well as other intellectual property concerns) also apply in the university context. Professors and graduate students are constantly innovating and creating, but whether they or the university own the final outcome may be something that they have not considered. In a famous example, Larry Page (one of the founders of Google), is listed as an inventor on one of the key patents that served as the foundation for Google. However, Stanford University owns the patent because Larry Page was a Ph. D. student there at the time of the invention. Consequently, Google had to license the patent from Stanford University for a hefty nine-figure sum. So while a university may not claim rights to inventions made by students as a matter of policy, they will likely claim rights to inventions made by employees. A graduate student or a post-doc is like a professor, in the sense that they are often employees of the university. Your specific institution likely has a tech transfer department, as well as its own policies and regulations. Again, an experienced attorney can help you protect yourself and stay informed of your rights and obligations.

Questions or concerns about your situation? Contact  Artaev at Law PLLC to set up your initial consultation or call or text Dan today.

Disclaimer: This guide is for general informational and promotional purposes only. Nothing herein constitutes legal advice. Every situation is different and faces its own unique set of challenges. Do not take any action or sign any contract until you have obtained specific guidance from a qualified professional.

© 2021 Artaev at Law PLLC. All rights reserved.

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How to Write an Employee Invention Assignment Agreement


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Writing an employee invention assignment agreement requires a lawyer to draft a document showing who owns what and the rights between an employer and employee. This contract helps in clarifying the terms of intellectual property rights as it relates to inventions, artwork, innovations, published content, and software code, among others that can be done by employees. This post will talk about how you can write an employee invention agreement and matters relating to the same.

Steps for Creating an Employee Invention Assignment Agreement

An employer should enter into an employee invention assignment agreement to safeguard its interests with respect to any inventions, creations, or discoveries made while performing duties for the company. These are steps toward writing a sound employee invention assignment agreement:

  • Recognize Objective and Scope. Understanding this requires drafting the contract itself. The main purpose of this document is to describe to whom certain rights pertaining to their IP goes when they work with the firm.
  • Include Parties’ Identification and Definition. The names of the two parties involved, employers and employees, must be added to these documents, together with their legal addresses and other relevant corporate information. Furthermore, define some important words used within this paper so that there would not be confusion about anything said later on.
  • Highlight Intellectual Property Covered. Differentiate what kind of intellectual property is meant here in clear terms. It may include such things as designs, writings, and software products, among others as far as concerns, business concern is one part that ensures all potential kinds of intellectual property are covered.
  • Establish Timing and Ownership. The period within which this contract runs needs defining. As a rule, it usually encompasses IP created by staff during their employment term at such a corporation. Determine if ownership immediately vests in the company upon creation or whether there exists a process through which it can be transferred thereto.
  • Detail Reporting Requirements. Specify how workers should submit information about their patents or works to supervisors/managers, etcetera, instead of them being kept secret from each other’s eyes alone, ensuring all valuable IPs are made known. Thus, indicate the way and period one is expected to convey.
  • Clarify Consideration and Compensation. Find out if there is any amount, reward, or other forms of value being provided to staff in return for such IP that they become the company’s property. Besides a lump sum payment as may be agreed upon under the agreement, it could also involve sharing some part of future profits that emanate from the use of those innovations.
  • Introduce Confidentiality and Non-compete Clauses. Some of the things you should add to this paper are clauses dealing with non-disclosure agreements and non-competition after termination. These protect trade secrets from competitors even if an employee leaves one company for another.
  • State Jurisdiction and Dispute Resolution . You need to clearly mention where this contract falls in terms of jurisdiction, plus outline how conflicts between parties should be solved once they arise. Methods like mediation, arbitration, or litigation may be used. This helps in avoiding legal complications later on by setting what would happen during disputes within its text.
  • Obtain Legal Review . It is important to consider engaging professional legal minds who will confirm their compliance with governing legislation. This can point out places that have been designed ambiguously or might contain loopholes leading to disagreements afterward.
  • Get Signatures. When the employee invention assignment agreement has been written and reviewed, it should be executed by both parties. Putting signatures on the agreement is a way of demonstrating comprehension and consent to the terms that have been summarized in the invention agreement. It is also good to have signed copies retained for future reference.

Importance of Writing an Employee Invention Assignment Agreement

Intellectual property (IP) is normally considered the basis for success in online businesses due to their rapidly changing nature. As organizations continue to search for ways of creating new goods, services, and technologies, there has been a growing importance of employees’ input towards these developments. However, ownership and protection of intellectual property rights developed by employees during employment can become intricate. This is where firms exploit employee invention assignment agreements. Here are some reasons why drafting an employee invention assignment agreement is important:

  • Protecting Intellectual Property: Employees may disagree with employers over ownership claims if they do not sign EIAAs, resulting in conflicts between them. An EIAA clearly defines who owns what and, therefore, avoids lawsuits.
  • Facilitating Innovation: An EIAA encourages workers to provide creative ideas without fear of being discredited or controlled by setting out who possesses such ideas and how they are compensated for through it. Thus fostering an environment conducive to nurturing innovation.
  • Enhancing Business Viability: Intellectual property is often at the core of corporate competitiveness. Therefore, this ensures that it does not lose its capabilities in terms of licensing or otherwise using its IP assets while keeping abreast of time.
  • Avoiding Litigation: Ownership ambiguities can lead to expensive disputes between employees and companies; however, well-written EIAs eliminate the need for litigation, thus saving resources spent, time used as well and reputational harm suffered.
  • Encouraging Innovation: However, while these contracts may favor organizations with respect to ownership rights in inventions, they occasionally contain provisions relating to providing reasonable compensation or recognition to inventors who make substantial contributions towards inventions. This strikes a balance for employees who may feel that their own inventions will be recognized or rewarded even though they are owned by the company.
  • Attracting Investors and Partners: Companies with robust IP strategies, including sound EIAAs, are more likely to secure investors and potential partners. It is an indication of the organization’s commitment to protecting its assets.
  • Complying with Legal Requirements: The lack of an EIA in some jurisdictions could give employees stronger claims on their intellectual property. Having a comprehensive EIAA in place helps companies to ensure compliance with local laws and regulations.

assignment of rights in invention

Key Terms for Writing an Employee Invention Assignment Agreement

  • Intellectual Property (IP): Ideas, designs, inventions, and other works which are protected by law.
  • Invention Disclosure: A formal report made by an employee specifying a new invention or idea to the employer.
  • Prior Inventions: Innovations made by staff before commencing jobs, frequently not covered by the agreement.
  • Work for Hire : Legal doctrine implying that the employer has automatic ownership over creations produced during work.
  • Assignment of Rights: Employee’s conveyance of intellectual property rights to the employer as provided in the document.
  • Exclusivity: The term restricting workers from transferring patents related to other organizations under contract.
  • Inventorship: Identification of persons who contributed to the creation of something important for obtaining patents.
  • Royalties: The amount paid to employees for inventions generating revenues for the company.
  • Derivative Works: Intellectual property developed from existing creations, subject to the terms of the agreement.
  • Termination Clause : It spells out what becomes of inventions in case of cessation of employment, including how rights will be passed on.
  • Severability: Clause that ensures that if one part of the agreement is found to be invalid, others are still enforceable.
  • Waiver : Often, written consent is required for one party to waive any right it has.
  • Arbitration: A method of settling disputes outside a court, which is usually stated as this contract’s preferred approach.
  • Verbosity: The article provides essential knowledge on drafting an employee invention assignment agreement.

Final Thoughts on How to Write an Employee Invention Assignment Agreement

In today’s knowledge-driven and competitive economy, where innovation is vital for success, organizations must proactively manage their intellectual property assets. An employee invention assignment agreement serves as a foundational document that outlines ownership, protects trade secrets, and fosters an atmosphere of inventiveness. What’s more, businesses can enable themselves to fully exploit their employees’ ingenuity and zeal while protecting their rights by creating a framework for ownership and associated rights relating to intellectual property.

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When a Promise Isn’t Enough – Crafting Proper Employee Patent Assignments

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US Inventor Declarations and Assignments

After a patent application has been filed, the inventor may be required to sign and submit various forms.  What happens if this is several years into the patent process, and the inventor can no longer be reached to sign these forms?  And what can you do now to prevent any complications from arising?  

One country which requires the inventor to submit signed forms is the USA.  Each inventor named on the application must submit a signed declaration and assignment with the US Patent and Trademark Office before payment of the Issue Fee.

What are US Declarations and Assignments?

An inventor declaration confirms the inventor’s belief that they are the original (or joint original) inventor of the claimed invention.  If an inventor declaration is not submitted by each inventor before payment of the Issue Fee, the application will be abandoned.

An assignment provides documentary evidence that the rights in the invention have been transferred from the inventor to the applicant, and that the applicant is the rightful owner of any patent granted for the claimed invention.  If a signed assignment is not submitted by each inventor before payment of the Issue Fee, the application could grant in the name of the inventor(s) instead of the applicant, although this can usually be rectified post-grant.

What if the inventor cannot or will not sign these forms?

In cases where the US application is filed later in the patent process, such as at the 12 month convention deadline, or even the 30 month national phase deadline, it is possible that the inventor(s) may no longer be available to sign the required forms (for example, they have left the company).  What happens then?

A substitute statement can be submitted in lieu of a declaration if an inventor is deceased, is under legal incapacity, has refused to sign the declaration, or cannot be found or reached after a diligent effort.  To demonstrate a “ diligent effort ”, it is usually sufficient to send a copy of the forms to the inventor’s last known address, along with an explanation of what is required and specifying a reasonable time-period for returning the signed forms (for example, 28 days).  If the forms are not returned by the end of this period, then it can be assumed that the inventor is no longer reachable.

If an inventor cannot or will not sign the required assignment to transfer their rights in the invention to the applicant, then one possible option where the inventor is an employee of the applicant is to submit their employment agreement in lieu of the assignment.  However, for the purposes of the USA, the employment agreement must address the employee’s obligation to assign any Intellectual Property (IP) rights created during their employment to their employer.  Ideally the document should contain language which indicates a present and active intent to assign any IP rights (for example, “ I hereby assign… ”), rather than language which merely indicates an intent to assign any IP rights in the future (for example, “ I agree to assign… ”).

If the employment agreement does not contain suitable language, one option is to rely on any local IP laws which legally require the employee to assign any IP rights to their employer.  For example, in the UK, section 39 of the Patents Act 1977 states that an invention made by an employee will automatically belong to the employer if:

“ (a) it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties; or

(b) the invention was made in the course of the duties of the employee and, at the time of making the invention, because of the nature of his duties and the particular responsibilities arising from the nature of his duties he had a special obligation to further the interests of the employer’s undertaking. ”

Therefore, if the employee and the employer are based in the UK and the invention falls into category (a) or (b) above, then the invention will automatically belong to the employer under UK law.

As such, in addition to filing a copy of the employment contract, a copy of the relevant local laws and a memorandum explaining why, under local law, the invention belongs to the employer can also be filed to prove full ownership of the application by the applicant.

What can the applicant do to avoid the above complications?

1/ Make use of PCT declarations if filing an International application, particularly:

  • (i) the declaration as to the identity of the inventor;
  • (ii) the declaration as to the applicant’s entitlement, as at the international filing date, to apply for and be granted a patent; and,
  • (iv) the declaration of inventorship (for the purposes of the designation of the USA).

For example, declaration (ii) satisfies the proof of right requirements in the Indian national phase, and (iv) satisfies the declaration requirements in the US national phase.  Declarations (i) and (ii) can be signed off by the acting attorney; declaration (iv) however must be signed by each inventor.

2/ Make sure any employment agreements, particularly for research & development staff, clearly address the employee’s obligation to assign any IP rights created, and include language which actively and presently assigns those rights to the employer.

If existing employment agreements do not contain such clauses, a separate agreement can be drawn up for the employee to sign and then appended to their contract. 

3/ Include a clause in the employment agreement requiring the employee to sign any necessary forms both during and after their employment.  This contractual agreement can be referred to should the employee actively refuse to sign any required forms later in the patent process.

Taking the above actions now can help to avoid any problems later in the patenting process which will likely incur unnecessary costs to rectify.  Should you require any assistance or advice, please contact me at christina .schiavone@ wynne-jones .com .

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The number of patent applications for inventions relating to Artificial Intelligence  “AI” is  growing fast!  But, can artificial intelligence be patented at the European Patent Office? The answer is both yes... and no.

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TJ Friedl doubles off wall in rehab assignment for Triple-A Louisville Bats in St Paul

assignment of rights in invention

The Cincinnati Reds sent outfielder TJ Friedl and left-handed pitcher Alex Young to Triple-A Louisville on rehab assignment, and both players made their season debuts Thursday in the Bats' 8-4 road win against the St. Paul Saints.

Friedl, who suffered a right wrist fracture during spring training, was 1-for-3 with a walk. His hit was a double off the center-field wall that was 103.9 miles per hour off the bat.

Young, recovering from low back disc degeneration, pitched a scoreless inning, walking one and striking out two.

The Enquirer's Gordon Wittenmyer wrote last week that Friedl could return to the Reds' lineup one or two weeks after starting his rehab assignment.

Social media reactions, including video of Friedl's double:

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