Here’s an example Invention Assignment agreement. It protects a company’s rights in the technology its employees build at work. Does it favor the company or the employee? I’d call it a balanced document for California, but employee-friendly in New York.
The example contract is based off an Orrick doc, but I’ve trimmed some legalese and tried to eliminate unnecessary confusion.
Startup Co. Confidential Information and Invention Assignment Agreement.
Employee Name:
Effective Date:
Company: [StarupCo, Inc., a Delaware Corporation]. Startupco, Inc., together with its current or future subsidiaries, affiliates, successors or assigns are collectively, the “Company.”
As a condition of my becoming employed (or my employment being continued) by StartupCo, I agree to the following:
1. Relationship. This Confidential Information and Invention Assignment Agreement (this “Agreement”) applies to my employment relationship with the Company.
1.1. Future Relationships. If my employment ends, and the Company hires me again (either as employee or consultant) within 1 year of the termination date, this Agreement will also apply to later employment or consulting relationship.
1.2. Any employment or consulting relationship (whether commenced before, upon or after the date of this Agreement) is referred to as the “Relationship.”
2. Duties. I will perform the work the Company designates for me, as well as any other work within the scope of the Relationship and not contrary to the Company’s instructions.
2.1. Entire Business Efforts. During the Relationship, I will devote my entire best business efforts to the interests of the Company and will not engage in other employment or in any activities detrimental to the Company’s interests.
[Optional: Substitute a less restrictive side-project policy here.]
3. Confidential Information.
3.1. Protection of Information. I may receive Confidential Information (as defined below). I will not disclose Confidential Information to any third party at any time, during or after the Relationship. I will not use Confidential Information except for the benefit of the Company.
3.2. Exception. If information becomes publicly and widely known and made generally available without any wrongful act on my part, it shall no longer be considered Confidential Information.
3.3. Confidential Information Defined. “Confidential Information” means information and physical material not generally known or available outside the Company and information and physical material entrusted to the Company in confidence by third parties. Confidential Information includes: (i) Company Inventions (defined below); and (ii) technical data, trade secrets, know-how, research, product or service ideas or plans, software codes and designs, algorithms, developments, inventions, patent applications, laboratory notebooks, processes, formulas, techniques, mask works, engineering designs and drawings, hardware configuration information, (iii) agreements with third parties, employee lists and other employee information (including the names, contact information, jobs, compensation, and expertise of such employees and consultants), supplier and customer information (including customers of the Company on whom I called or with whom I became acquainted during the Relationship), (iv) price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, historical financial data, budgets or other business information.
3.4. Third Party Information. I will not improperly use or disclose any of my former employer’s (or any third party’s) confidential, proprietary or secret information to the Company.
3.5. Other Rights. This Agreement is intended to supplement any other rights the Company may have in law or equity with respect to the protection of trade secrets or confidential or proprietary information.
4. Ownership of Inventions.
4.1. Existing Personal Inventions. All Inventions (as defined below) that I have invented or own any interest in, and that relate in any way to any of the Company’s actual or proposed businesses, products, services, or research and development are listed in Exhibit A. These inventions are not assigned to the Company.
If no such list is attached, I represent that there are no Inventions, and to the extent such Inventions do exist and are not listed on Exhibit A, I hereby forever waive any and all rights or claims of ownership to such Inventions.
4.2. Incorporation of Personal Inventions. If I use or incorporate any personal Invention into a Company product, I will automatically give the Company permission to use the personal Invention. Specifically, I hereby irrevocably grant to the Company a nonexclusive, fully paid-up, royalty-free, assumable, perpetual, worldwide license, with right to transfer and to sublicense, to practice and exploit such Invention and to make, have made, copy, modify, make derivative works of, use, sell, import, and otherwise distribute such Invention under all applicable intellectual property laws without restriction of any kind. I will promptly inform the Company in writing before incorporating any personal Invention into a Company Product.
4.3. Inventions Defined. “Inventions” means discoveries, developments, concepts, designs, ideas, know how, improvements, inventions, trade secrets and/or original works of authorship, whether or not patentable, copyrightable or otherwise legally protectable. I understand this includes any new product, machine, article of manufacture, biological material, method, procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon. “Company Inventions” means any and all Inventions that I may solely or jointly author, discover, develop, conceive, or reduce to practice during the period of the Relationship.
4.4. Assignment of Company Inventions. The Company will own Company Inventions. I hereby assign to the Company, or its designee, all my rights throughout the world in all Company Inventions and all patent, copyright, trademark, trade secret and other intellectual property rights in them. I further acknowledge that all Company Inventions that are made by me (solely or jointly with others) within the scope of and during the period of the Relationship are “works made for hire” and are compensated by my salary. Assignment of Company Inventions includes all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world (including “moral rights,” “artist’s rights,” “droit moral,” or the like (collectively, “Moral Rights”). To the extent that Moral Rights cannot be assigned under applicable law, I hereby waive and agree not to enforce any and all Moral Rights, including any limitation on subsequent modification, to the extent permitted under applicable law. [Note – Moral Rights are generally a European right, not a U.S. right. Moral Rights generally involve an artists right to have their name attached to their artwork. This right cannot be sold, so the original artist can always demand their name stays attached to their artwork.]
4.5. Maintenance of Records. I agree to keep written records of all Company Inventions I make during the term of the Relationship. The records will be the sole property of the Company. I agree to deliver all such records (including any copies) to the Company upon any termination of the Relationship.
4.6. Patent and Copyrights. I agree to help the Company secure patents and copyright registrations. Specifically, I agree to assist the Company, or its designee, at its expense, in every proper way to secure the rights in the Company Inventions and any copyrights, patents, trademarks, mask work rights or other related intellectual property rights in any and all countries. This assistance includes (i) disclosing to the Company all pertinent information and data, and (ii) signing all applications, specifications, oaths, assignments, recordations, and all other documents which the Company deems necessary to secure, maintain and transfer such rights, and (iii) any other work the Company deems reasonably necessary to maintain and enforce its intellectual property rights. I agree to sign such reasonably necessary documents even after the termination of my Relationship with the Company. I hereby irrevocably designate and appoint the Company and its duly authorized agents as my agent and attorney-in-fact, to act for me to execute and file any such documents and to do all other lawfully permitted acts to help secure maintain and transfer rights related to Company Inventions.
4.7. Exception to Assignments. IF: applicable state law prohibits an assignment of an invention from me to the Company, THEN: I will keep the rights to the invention. See Exhibit B.
In order to assist in the determination of which inventions qualify for such exclusion, I will advise the Company promptly in writing, during and after the term of the Relationship, of all Inventions I solely or jointly conceived or develop during the Relationship.
5. Privacy. I understand that the Company may monitor communications I make using Company equipment. The Company may also inspect any physical property left on their premises (including any physical or digital storage media) without notice.
6. Termination Certificate. I agree to sign and deliver the “Termination Certification” (Exhibit C) upon the Termination of the Relationship. However, my failure to sign the Termination Certification shall not diminish my continuing obligations under this Agreement.
7. Restrictions.
7.1. No Solicitation of Employees for 1 Year. I agree that during the term of the Relationship, and for a period of 12 months immediately following the termination of the Relationship for any reason (whether with or without cause), I shall not, directly or indirectly, solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity.
7.2. Other Parties. During the Relationship, I will not try to help any of the Company’s competitors. Specifically, I agree that during the Relationship, I will not negatively influence any of the Company’s clients, licensors, licensees or customers from purchasing Company products or services. Likewise, I will not solicit or influence or attempt to influence any client, licensor, licensee, customer or other person either directly or indirectly, to purchase any products or services from any of the Company’s competitors.
7.3. Non-Compete. [Consider adding non-compete clause here. Be careful in California, where a non-compete is probably not valid. ]
7.4. Modification. The Company and I have attempted to minimize my post-employment restrictions to only to the extent necessary to protect the Company from unfair competition. Should a court of competent jurisdiction determine that the scope of these covenants exceeds the maximum reasonable restrictiveness, the court should modify and enforce the provision to fullest allowable extent of the law.
8. Notice to Third Parties. I agree that during the periods of time during which I am restricted in taking certain actions by the terms of this Agreement (the “Restriction Period”), I shall inform any entity or person with whom I may seek to enter into a business relationship (whether as an owner, employee, independent contractor or otherwise) of my contractual obligations under this Agreement. I also understand and agree that the Company may, with or without prior notice to me and during or after the term of the Relationship, notify third parties of my agreements and obligations under this Agreement. I further agree that, upon written request by the Company, I will respond to the Company in writing regarding the status of my employment or proposed employment with any party during the Restriction Period.
9. At-Will Relationship. My Relationship with the Company is at-will. Either party (myself or the Company) may terminate the Relationship at any time for any reason or for no reason at all, without further obligation or liability, other than those provisions of this Agreement that explicitly continue after the termination of the Relationship.
10. Representations and Covenants. I represent and warrant as follows:
10.1. No Conflicts. I represent that my performance of all the terms of this Agreement will not breach any agreement I have entered into with any third party, including any agreement to keep proprietary information confidential.
10.2. I will not induce the Company to use any inventions, confidential or non-public proprietary information, or material belonging to any previous client, employer or any other party.
10.3. I acknowledge and agree that I have listed on Exhibit A all agreements (e.g., non-competition agreements, non-solicitation of customers agreements, non-solicitation of employees agreements, confidentiality agreements, inventions agreements, etc.), if any, with any current or former client, employer, or other entity, that may restrict my ability to accept employment with the Company or otherwise restrict my ability to perform my duties for the Company.
11. Electronic Delivery. This Agreement does not imply a right to participate in any equity incentive plans. However, if I do participate in such plans, I hereby consent to receive any documents related to the plan by electronic means.
12. Miscellaneous.
12.1. Governing Law. This Agreement is governed by the laws of the state of [California][New York], without giving effect to the principles of conflict of laws.
12.2. Entire Agreement. This Agreement sets forth the entire understanding between the parties relating to its subject matter. It may not be amended except by a signed writing.
12.3. Waiver. Rights under the agreement may not be waived implicitly. They may only be waived by a signed writing from an authorized Company officer. If I am a Company officer, I cannot waive any rights under this Agreement without the specific approval from the Company’s board of directors.
12.4. Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives, and my successors and assigns, and will be for the benefit of the Company, its successors, and its assigns.
12.5. Notices. Any notice under this Agreement shall be in writing. It shall be deemed sufficient when delivered by any reliable means of communication that creates a record of delivery (e.g., email with confirmation of receipt, certified mail, etc.).
12.6. Severability. If any provision of this Agreement is unenforceable, the remainder of the agreement shall remain in effect to the fullest extent allowed by law.
12.7. Remedies. I understand that a violation of this Agreement may cause the Company irreparable harm. I agree that the Company will be entitled to seek extraordinary relief in court, including temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other security (or, where such a bond or security is required, I agree that a $1,000 bond will be adequate). These rights supplement and do not replace, any of the Company’s other rights or remedies.
12.8. Advice of Counsel. I have had the opportunity to seek the advice of independent legal counsel. I have read and understood all of the terms of this agreement. This agreement shall not be construed against any party by reason of that party’s drafting or preparation of the Agreement.
Exhibit A - List of Prior Inventions Not Assigned to Company, and List of Prior Non-Disclosure or Similar Agreements.
All Inventions that, as of the Effective Date: (A) I made, and/or (B) belong solely to me or belong to me jointly with others or in which I have an interest, and that relate in any way to any of the Company’s actual or proposed businesses, products, services, or research and development, and which are not assigned to the Company are listed below.
All agreements, if any, with a current or former client, employer, or any other person or entity, that may restrict my ability to accept employment with the Company or my ability to recruit or engage customers or service providers on behalf of the Company, or otherwise relate to or restrict my ability to perform my duties for the Company or any obligation I may have to the Company are listed below:
Title / Date / Description
Signature of Employee:
Print Name of Employee:
Date:
Exhibit B - Section 2870 of the California Labor Code.
(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.
Exhibit C: Termination Certification
Employee: [Name]
Company: [Company Name], a Delaware corporation, its subsidiaries, affiliates, successors or assigns (collectively, the “Company”).
I certify that I have returned all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items belonging to the Company.
I certify that I have complied with all the terms of the Company’s Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any Inventions (as defined that agreement) covered by that agreement. I acknowledge my continuing obligations under that agreement.
I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.
I further agree that for 12 months from the date of this Certification, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity.
I agree that I shall not use any Confidential Information of the Company to negatively influence any of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct any purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.
(Signature)