It is increasingly common for employees to be asked to sign an intellectual property assignment agreement (sometimes referred to as an invention assignment agreement), either as part of an employment agreement or as a standalone document. For companies operating in the tech and media sectors, these provisions are critical because they rely on their employees to create the intellectual property that drives their businesses. Because employee-created intellectual property is often the foundation of these businesses, these companies have to ensure that they are its owners. Invention assignment clauses found in various types of company agreements are the way in which these companies secure the IP rights that are critical to their long-term success.
Since most people who wish to work in the tech, media, or fashion industries will have to sign intellectual property assignment documents of some type, it is important to know what to expect when asked to sign one of these agreements. Intellectual property assignments typically include the following:
- A “work made for hire” clause. If the invention assignment agreement is between an employee and his or her employer, a “work made for hire clause” is not legally necessary. However, it is good practice to include this language so that the employee understands that certain copyrights created as part of his or her employment are considered the property of the employer under US copyright law. A “work made for hire” clause is legally required for contractor agreements.
- Assignment language. This language is applicable to all types of intellectual property, including trade secrets, trademarks, patents, and copyrights. Regardless of the industry in which the employer operates, it will want to secure any rights related to the work performed by its employees.
- Further Assurances. These agreements typically include language requiring the employee to help the company secure and protect its intellectual property rights. These clauses generally ask the employer to sign filings with government offices (such as the United States Patent and Trademark Office or the Copyright Office). Language requiring the employee to help in the defense of company’s IP rights (such as by providing testimony) is often included. However, this language should also state that the employer will pay for any costs incurred by the employee in helping the employer secure its IP rights.
There are a few things that should not be included in a well-drafted invention assignment agreement.
- There should be no unrestricted assignment clause. The assignment language should be limited to those inventions and other intellectual property related to the employer’s business and/or created by the employee as part of his or her employment. This limitation on the scope of the assignment might not be found in the intellectual property assignment section itself, but in a definition of a key term used in the assignment such as the “Work Product” or “Company Intellectual Property.”
- In most circumstances, any intellectual property created by the employee before the start of employment should also be excluded. Many invention assignment agreements include a section where the employee can list his or her existing IP. If an employee has preexisting intellectual property, he or she should list all of it in the appropriate section.
- The employee should never have to pay out of pocket to help the employer secure or defend its intellectual property rights. Expenses accrued by any obligations of the employee after the termination of his or her employment should be the responsibility of the employer, and not the employee.
Invention assignment agreements can be complex and include many other clauses than those outlined above. However, understanding the basics of these agreements and knowing what to avoid can demystify them and give the employee confidence in understanding each party’s rights and responsibilities.
David has helped individuals, research institutions, and start-ups with registering their trademarks and applying for patent protection on their inventions. During his career, he has helped his clients buy and sell intellectual property of all types, either alone or as part of a larger transaction, and license intellectual property rights.