San Jose Intellectual Property Firm Explains Assigning Rights to Employee Inventions

Employees frequently steal their employers’ ideas that are acquired while on the job. They then turn around and call them original and claim that these ideas were developed outside of working hours. Employers frequently come to the attorneys here at SAC asking what they can do to inoculate themselves from this sort of intellectual thievery—can employers demand that employees sign over any patents created while employed? In this blog post, we will discuss intellectual property created by employees while they work for an employer and what steps can be taken to protect each side from having their work unfairly appropriated.

If your company could benefit from IP counsel regarding these issues or others, the attorneys at SAC Attorneys LLP are positioned to provide you with immediate, expert advice. Call us for your free consultation today at (408) 436-0789.

Employers in California can force employees to assign their future intellectual property that is created or conceived during the term of the employment relationship. To assign means to transfer the future rights you may have in any invention to another party. California has a statute addressing assigning employee inventions; while it is written in a tone and vocabulary suggesting that it is aimed at protecting employees, it is actually quite employer-friendly in practice:

(a) 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.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

This law starts from a position that an employer cannot have an employee assign his or her intellectual property as part of an employment contract, and the rule applies to all intellectual property created during the employee’s own time. However, the exceptions to this rule are so significant that they end up eclipsing the rule itself. It is legal to require an employee to assign intellectual property created in the employee’s own time if it required any of the employer’s tools, facilities, or intellectual property, or if that intellectual property relates to the employer’s business or research and development. Those exceptions are far reaching. In practice, employees are most likely to develop marketable intellectual property in areas relating to their area of employment—all of that intellectual property can be assigned at the time of employment. In reality, it is only ideas that are utterly foreign to the employee’s area of expertise that are protected from an assignment.

Unfortunately, in this competitive market, you need help protecting your intellectual property from your employees which requires expert human resources and intellectual property advice. For a free initial consultation, contact SAC Attorneys LLP today at (408) 436-0789. Based in San Jose, California, our firm is prepared to represent clients in Mountain View, Los Gatos, Cupertino, Fremont, Palo Alto, Santa Clara County, Silicon Valley, and around the world.