When you sign an employment contract that includes an IP assignment clause — sometimes called a Proprietary Information and Inventions Assignment (PIIA) agreement — you are agreeing to transfer ownership of your inventions, creative works, and intellectual property to your employer. These clauses are standard in technology, media, and product companies, and they are often presented as non-negotiable boilerplate. But IP assignment clauses vary enormously in scope. A narrowly drafted clause covers only inventions you create using company resources, during working hours, within the scope of your role. An overreaching clause purports to claim ownership of everything you create during your employment — even personal projects you build on weekends with your own equipment. Knowing what you are signing — and what statutory protections you have — matters enormously for anyone who creates anything outside of work.
What is a IP Assignment Clause?
An IP assignment clause transfers ownership of intellectual property — inventions, software, written works, designs — from you to your employer. Under US copyright law, works created by an employee 'within the scope of employment' are automatically 'works made for hire' owned by the employer (17 U.S.C. § 101). IP assignment clauses in contracts often go further, claiming inventions that relate to the company's business even if created outside of work hours. Several states have enacted employee invention assignment statutes that limit how far these clauses can reach.
Red flags to watch for
This language is intentionally broad. If you work for a software company, it could arguably claim your personal app, game, or side project if it involves software. Negotiate for a 'scope of employment' limitation.
Without an exhibit listing your pre-existing IP, the employer could claim that inventions you built before joining belonged to them once you signed. Always insist on attaching a prior inventions schedule.
A temporal limitation alone — covering anything created while employed — is overbroad. It would sweep in weekend projects with no connection to your job.
Some agreements include a post-employment period (e.g., 6 months) during which inventions are presumed to be company property. This is aggressively overreaching.
States including California (Lab. Code § 2870), Delaware (§ 805), Illinois (765 ILCS 1060/2), Minnesota (§ 181.78), North Carolina (§ 66-57.1), and Washington (RCW 49.44.140) prohibit assigning inventions made on your own time without company resources. If you're in one of these states and the contract ignores the statutory carve-out, demand it be added.
Some agreements include a blanket waiver of all moral rights. While US law recognises limited moral rights for visual art (VARA), this clause type suggests the drafter is using an international template with broader scope.
Your legal rights
Several US states limit employer IP assignment rights by statute. California Labor Code § 2870 is the most protective: it voids any assignment of inventions that (1) did not involve employer equipment or time, (2) did not relate to the employer's business or research, and (3) did not result from your employment duties. Similar protections exist in Delaware (§ 805), Illinois (765 ILCS 1060/2), Minnesota (§ 181.78), North Carolina (§ 66-57.1), and Washington (RCW 49.44.140). Federally, 'works made for hire' under 17 U.S.C. § 101 covers works by employees in the scope of their employment — but the 'scope' limitation is key.
Questions to ask before you sign
- 1Does the IP assignment cover only inventions created within the scope of my employment, or everything I create during my employment?
- 2Can I attach a prior inventions exhibit listing my personal projects before I sign?
- 3Does this contract comply with the employee invention statutes of my state (e.g., California Labor Code § 2870)?
- 4If I create something on my own time, using my own equipment, unrelated to this company's business — do you claim ownership?
- 5Is there a post-termination period during which inventions are presumed to be company property?
- 6Does the contract include a waiver of moral rights, and if so, what does that cover?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.