What Is an Invention Assignment Agreement?

Updated June 16, 2023
8 min read
desktop with folders, paper named "Invention Assignment Agreement," images on the screen

Introduction

Confidential information and invention assignment agreement is a document signed by employees before they start working for a company. It protects the company's personal information and grants the employer rights over inventions an employee creates during employment. Effectively, ownership of the intellectual properties transfers to the employer, and they may use them for profit.

Main Requirements

The confidential information clause requires employees to commit not to disclose confidential company information to an outside party during their service and after employment termination. Confidential information may include the following:

Confidential Information
  • Trade secrets;
  • Technical data;
  • Product plans;
  • Customers;
  • Suppliers;
  • Software;
  • Research and development;
  • Services;
  • Inventions;
Confidential Information
  • Technology;
  • Processes;
  • Designs;
  • Hardware configuration information;
  • Formulas;
  • Personnel information;
  • Finances;
  • Drawings; and
  • Third-party information.

On the invention assignment declaration part, employees must commit to disclose to the employer any inventions they create or conceptualize during employment. However, in some states, employers have no right to the inventions employees make during their own time and using personal equipment. 

Examples of states with this exception include:

State Law
California
State Law
Delaware

Code Annotated, Title 19, §805

State Law
Utah

Code Annotated §§ 34-39-2, 34-39-3

Similarly, the employer has no rights to any intellectual properties the employee owned before moving to the company. However, the employee must disclose these in the agreement.

Employment confidential information and invention assignment agreement is mainly necessary for roles that require inventing solutions or creating products, including: 

  • Actors;
  • Animators;
  • Architects;
  • Art directors;
  • Artists;
  • Audio engineers;
  • Authors; 
  • Brand managers;
  • Cartoonist;
  • Choreographers;
  • Copywriters;
  • Curators;
  • Designers; 
  • Developers; 
  • Editors;
  • Engineers;
  • Film producers;
  • Glassblowers; 
  • Jewelers;
  • Journalists; 
  • Marketing professionals;
  • Musicians;
  • Music producers;
  • Painters;
  • Photographers;
  • Printmakers;
  • Sculptors;
  • Videographers; and
  • Woodworkers. 

Employees such as accountants and human resource managers may not necessarily need to sign the employment confidential information and invention assignment agreement unless their specific duties involve inventions.

What Types of Agreement Can Be Used to Protect My Company's Intellectual Property?

Intellectual property (IP) refers to creations such as inventions, designs, images, names, artistic works, and symbols. Agreements protect IPs and define terms and conditions, authorizing another party who wishes to use them.

There are several types of agreements for protecting a company's intellectual property, including:

  1. Non-disclosure agreement (NDA) that restricts sharing confidential information with third parties, such as trade secrets, financial information, business plan, processes, technology, company structure, etc.;

  2. Employment confidential information and invention assignment agreement that is signed between employees and the company mainly to restrict the disclosure of confidential information and assign inventions employees create during their employment term to the employer;

  3. Licensee agreement that goes between the owner of intellectual property (e.g., copyright, patent, and trademark) and another party authorizing the licensee to use the IP in exchange for royalties. Licenses can be exclusive or non-exclusive;

  4. Joint venture agreement made between two parties agreeing to collaborate in business activity. It sets out the obligations and rights of each party and provides protection in case of a dispute;

  5. Assignment agreement between two parties during the sale or merging of a business;

  6. Franchise agreement is signed between a franchisor and franchisee, authorizing the latter to use the former's intellectual property (business model) at another location;

  7. Software license and maintenance agreement made between a software provider and its customers granting them rights to use the solution;

  8. Material transfer agreement governs material transfer between two parties (material owner and the recipient). It grants the recipient the license to use the material and outlines their rights and obligations regarding its use; and

  9. Technology agreement that is signed between a technology owner and someone else intending to use it, outlining the terms of use.

Importance of Intellectual Property Agreements

According to statistics, IP-intensive industries account for about 38% of the nation's GDP, yet IP crime costs the economy billions of dollars in losses. For instance, trade secret theft cost the economy $180 billion, with another $18 being lost from pirated U.S. software.

As such, the importance of intellectual property agreements cannot be emphasized enough. Here are some of the main reasons you need an employment confidential information and invention assignment agreement, among other IP agreements.

  • Generate earnings for your company by licensing the intellectual property in exchange for royalties;
  • Secure the intellectual property by outlining the terms and conditions of use, effectively safeguarding your business in the event of infringement or theft issues;
  • Gain access to financing by using intellectual property (IP) rights as collateral;
  • Get a competitive advantage by assigning intellectual properties to your company to safeguard them from unauthorized use or distribution; and
  • Clarify ownership with IP agreements like employment confidential information and invention assignment agreements, which assign employees' inventions to the employer.

Start Using Confidential and Invention Assignment Agreements

Employment confidential information and invention assignment agreement is one of the many agreements you can use to protect your company's intellectual property. Others include non-disclosure, licensee, assignment, franchise, software license and maintenance, material transfer, technology consulting, and joint venture agreements. Legal protection can be in the form of trademarks, patents, copyright, and trade secrets. 

Agreements not only clarify ownership and secure the IP, but they give you a competitive advantage. They can also generate earnings for your company through licensing, or you can use the IP rights as collateral to access financing.

If you want to create a confidential information and invention assignment agreement, Lawrina is here to help. Check out this ready-made template and prepare the document in a few simple steps.

Article by
Yevheniia Savchenko
Lawrina

Yevheniia Savchenko is a Product Content Manager at Lawrina. Yevheniia creates user interface copies for Lawrina products, writes release notes, and helps customers get the best user experience from all Lawrina products. Also, Yevheniia is in charge of creating helpful content on legal template pages (Lawrina Templates) and up-to-date information on US law (Lawrina Guides). In her spare time, Yevheniia takes up swimming, travels, and goes for a walk in her home city.

If you have any questions or suggestions regarding the product or UX content for Lawrina, feel free to contact Yevheniia directly at y.savchenko@lawrina.org or connect with her on LinkedIn.