Invention Assignment Agreement

A contract clause that gives an employer ownership of inventions created by an employee during employment.

An invention assignment agreement (sometimes called a Proprietary Information and Inventions Assignment Agreement, or PIIA) is a contract — typically signed at hire — in which an employee assigns to the employer ownership of any inventions, discoveries, developments, or intellectual property they create during employment. The scope of 'during employment' is the critical variable: most agreements claim ownership of anything created using company time, company resources, or company confidential information — but some go further and claim ownership of anything related to the company's business or current/reasonably anticipated R&D, even if created entirely on personal time with personal equipment.

Invention assignment agreements are standard and legally enforceable in most U.S. states. They are most commonly found in technology, pharma, biotech, and any company with significant IP assets. The practical implication: if you write code, build a product, develop a process, or invent something in your personal time during your employment, and that invention touches the company's field of business or uses any company information, the employer may legally claim ownership of it. This has concrete consequences for side projects, open-source contributions, and startup activities conducted while employed.

Several states provide statutory limits on invention assignment scope. California, Delaware, Illinois, Minnesota, North Carolina, and Washington all have laws that specifically prohibit employers from claiming ownership of inventions developed entirely on the employee's own time, without company resources, and unrelated to the company's business or reasonably anticipated research. Even in these states, the 'unrelated to company business' carve-out is interpreted narrowly. Before starting a side project, moonlighting activity, or startup while employed, review your invention assignment agreement carefully and consider having an employment attorney analyze whether your project falls within or outside the employer's claimed scope.

What to Review Before Signing

  • Scope of 'company time and resources': does the agreement cover only company time, or also evenings and weekends if you use a company laptop even briefly?
  • Field of business definition: how broadly is the company's business defined? Broad language ('anything in the technology sector') can swallow almost any tech side project.
  • Prior inventions carve-out: most agreements allow you to list pre-existing inventions that you want excluded. Fill this section out carefully before signing — anything not listed may be deemed company property.
  • Post-employment IP: some agreements claim ownership of inventions made within a defined period after leaving (6–12 months) if they relate to work done at the company. This is most common in pharma and biotech.
  • Open source: some agreements require approval before contributing to open-source projects; others explicitly permit personal open-source contributions that don't involve company IP.

The Prior Inventions List

Almost every PIIA includes a section where you can list prior inventions you want to retain ownership of. This is one of the most important things to fill out carefully and specifically rather than leaving blank. If you have a side project, an app, a GitHub repository, a patent, or any other IP you want to retain, list it here before signing. 'All personal software projects not related to [Company's] business' is too vague to be enforceable — be specific. If you don't list something and the company later claims it, your unsigned blank prior-inventions section is evidence that you had nothing to exclude. If in doubt, list it — companies rarely dispute legitimate prior inventions.

Example

A software engineer accepts a role at an AI startup and is presented with a PIIA on day one. She has an iOS app she's been building on weekends for two years — unrelated to the startup's B2B analytics business. She fills in the prior inventions section specifically: 'Mobile application [App Name], an iOS fitness tracking app developed prior to employment start date.' The agreement is signed with this carve-out in place. Two years later, she sells the app for $180,000. Because she listed it in the prior inventions section before signing, the startup has no legal claim to the proceeds. Had she left the section blank and signed, the startup's claim to the app would have been a legitimate legal question requiring litigation to resolve.