IP Assignment Agreement

A contract requiring employees to transfer ownership of inventions and creative work made during employment to the employer — often broader than employees realize.

An Intellectual Property (IP) Assignment Agreement — also called an Invention Assignment Agreement or Proprietary Information and Inventions Agreement (PIIA) — is a contract that transfers ownership of any intellectual property an employee creates during the course of employment to the employer. These agreements are near-universal at tech companies and are typically signed as a condition of employment during onboarding. Most employees sign them without reading them closely, which can create problems later.

The scope of these agreements is often broader than employees expect. Many IP assignment clauses claim ownership of any invention created: (1) using company equipment, (2) during working hours, (3) related to the company's current or anticipated business, or (4) resulting from work performed for the company — including combinations of the above. At their broadest, an employer could claim ownership of a side project you built at home on your own laptop if the project is tangentially related to the company's industry.

Several states — including California, Delaware, Illinois, Minnesota, North Carolina, and Washington — have laws limiting the scope of IP assignment agreements. California Labor Code Section 2870, for example, specifically exempts inventions that don't use company resources, aren't related to the company's business, and don't result from work performed for the employer. Understanding whether your state has similar protections is critical if you do any outside work or side projects.