Does my employer own my inventions?

It depends on your employment agreement, the nature of the invention, and your state's law. In most cases, your employer owns inventions that you created: (1) within the scope of your employment (related to your job duties), or (2) using the employer's resources (time, equipment, materials, confidential information). Most tech employment agreements include a broad invention assignment clause requiring you to assign all inventions created during employment to the employer. However, many states limit how broad these assignments can be.

What is California Labor Code § 2870?

California Labor Code § 2870 limits employee invention assignment agreements. Under § 2870, an employer cannot require an employee to assign inventions that (1) the employee developed entirely on their own time, (2) without using the employer's equipment, supplies, facilities, or trade secret information, AND (3) the invention does not relate to the employer's business or reasonably anticipated research or development, AND (4) does not result from work performed by the employee for the employer. All four conditions must be met. Several other states (Minnesota, North Carolina, Washington, Delaware) have similar statutes.

What counts as 'using company resources' for inventor rights purposes?

Company resources include: company computers, servers, or cloud computing accounts; time worked during paid work hours; company facilities; company trade secrets or confidential information used in the invention; company software tools or development environments. Using any of these can bring an invention within the employer's assignment rights, even if the invention was developed outside normal work hours. Even 'bringing your work laptop home' and coding on a side project can implicate company ownership under a broad assignment agreement.

What should I do before leaving a job to start a company?

Before leaving: (1) Review your employment agreement carefully — look for invention assignment, non-compete, and non-solicitation clauses; (2) consult an employment attorney about what your agreement actually requires; (3) make sure your startup idea does not use or derive from your employer's trade secrets or confidential information; (4) ensure any work on your startup was done on your own time, on your own equipment, without employer resources; (5) disclose your startup plans to your employer if required (some agreements require prior written consent for outside activities); (6) understand your non-compete's scope — it may restrict what industry or role you can work in after leaving.

For Inventors & Founders

Employee Inventors: Who Owns What You Invent at Work?

This question matters enormously to anyone building a startup after a corporate job, anyone working a day job while developing a side project, and any employer trying to protect its IP. The answer is nuanced — and getting it wrong can have serious consequences.

Educational guide. Invention ownership is a complex legal question that depends on your specific agreement, state law, and facts. Consult an employment and IP attorney for your situation.

The general rule: what your employer likely owns

Without a written employment agreement, the common law default in most US states is that an employer owns inventions created by an employee within the scope of their employment — inventions made while doing the job they were hired to do, using company resources, during work time.

In practice, almost every tech employment agreement goes further. Standard tech employment agreements include a broad 'Intellectual Property Assignment' or 'Proprietary Information and Inventions Agreement' (PIIA) clause requiring employees to assign to the employer all inventions that: (1) relate to the company's current or reasonably anticipated business; (2) result from work performed for the company; or (3) are made using the company's equipment, facilities, or information.

The practical effect: if you work at a tech company and develop a software invention that relates in any way to the company's business — even on a weekend — a broad PIIA likely gives the company ownership. 'Relates to the company's business' is interpreted broadly, especially in AI, software, and hardware.

What an employee may own: the exceptions

Most states follow the common law rule with no statutory limits on employment invention assignments. But a significant minority of states have statutes that carve out protections for employee inventors.

California Labor Code § 2870 (and similar statutes in MN, WA, NC, DE, IL)

An employer cannot claim ownership of inventions that the employee (1) developed entirely on their own time, (2) without using company equipment, supplies, facilities, or trade secrets, AND (3) the invention does not relate to the company's business OR reasonably anticipated R&D, AND (4) does not result from work performed for the company. All conditions must be met simultaneously. 'Does not relate' is the hardest condition to satisfy if you work in tech.

The 'moonlighting' carve-out in many PIIAs

Many PIIA agreements include a Schedule A or Exhibit A where you disclose pre-existing inventions and outside projects before signing. Inventions properly disclosed in that exhibit are typically excluded from the assignment. If you have a side project before starting a job, disclose it properly in the PIIA exhibit before signing.

No-assignment for unrelated prior inventions

Most agreements do not require assignment of inventions you made before your employment started. However, if you continue developing a pre-employment invention after starting your job — especially using company resources or knowledge — the line between pre-existing and new can blur. Document the prior invention with timestamps, commits, and prior filings before starting any new job.

The 'company resources' trap

The most common mistake employee inventors make: using a company laptop, company cloud account, company VPN, or company development tools for a side project, even outside work hours. Under most PIIAs, this single fact can bring the invention within the company's assignment rights — even if the invention is completely unrelated to the company's business.

This is particularly acute in tech: company GitHub accounts, company AWS credits, company design tools, even company Slack (which may contain work-related communications that touch on the invention). Any use of company infrastructure during development is a risk factor.

Best practice for side projects: use personally-owned equipment, personal cloud accounts, personal development tools, and personal email. Keep every aspect of the side project separate from your work environment. Document the separation.

Before leaving to start a company: a checklist

Review your employment agreement. Read every clause about IP assignment, non-competition, non-solicitation, and moonlighting disclosure requirements. If there are terms you don't understand, get an employment attorney to explain them before you make any moves.

Identify everything your company will claim. Under your agreement's assignment clause, what inventions or work product might the company assert ownership over? The products you are building for your startup — do they use any knowledge, code, designs, or processes developed at your job?

Clean break: the safest structure is a startup idea and technology that does not derive from your employer's confidential information, does not build on work you did for the employer, and does not target the employer's direct business. The further your startup is from your employer's domain, the cleaner the IP picture.

Timing of filing: if you have a patentable invention for your startup, file before leaving — or at minimum before the 12-month grace period runs on any public disclosure. But be careful: if the invention was conceived while employed and relates to the employer's business, filing in your own name may be a misrepresentation.

Document what your employer actually owns. If there is a dispute, the party with better documentation usually prevails. Keep records showing when you conceived your startup idea, what resources you used, and how it differs from your work.

What happens when companies fight over employee inventions

IP ownership disputes between former employees and employers are common in startups. The employer's typical theory: the employee developed the core technology while employed, using company resources, in a field related to company business. The employee's typical defense: the invention was conceived outside work hours, without company resources, and relates to a different business area.

Courts look at: timing of conception, resources used, relationship to job duties, relationship to company business, and what the employment agreement says. Witness testimony about when and how the invention was conceived matters enormously — which is why contemporaneous documentation (dated commit histories, personal notebooks, emails from personal accounts) is so valuable.

The stakes can be existential for startups: if a court finds the employer owns the core IP, the startup may have no protectable technology. Many startups have been forced into licensing arrangements with former employers because this analysis was done too late.

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