What states have specific laws protecting employee inventions?

States including California, Washington, Illinois, Delaware, Kansas, Minnesota, New Jersey, North Carolina, and Washington have specific statutes (e.g., California Labor Code Section 2870) that limit an employer's ability to claim ownership of employee inventions.

How can I ensure my side project is protected?

Ensure you work outside of business hours, use personal hardware and software, avoid using company proprietary information, and document your development process to prove independence.

A TermScore is an AI-generated risk rating from 0 to 100 that evaluates the fairness and risk level of any legal document. A score of 86-100 means the contract is highly favorable, while 0-30 indicates dangerous terms you should walk away from.

What types of documents can TermScore analyze?

TermScore analyzes any legal document including freelance contracts, employment agreements, residential leases, NDAs, brand sponsorship deals, SaaS vendor agreements, and rental applications. Upload PDFs, Word documents, or images.

How much does TermScore cost?

TermScore offers a free plan with 3 scores per month. The Team plan is $15/month for 30 scores, and the Professional plan is $50/month for 500 scores with team collaboration features.

Is my document data secure?

Yes. Documents are processed in memory and analysis results are stored encrypted. TermScore never shares your document data with third parties and you can delete your data at any time from your dashboard.

Can an employment NDA legally claim ownership of personal side projects built without company resources?

Q: Can an employment NDA legally claim ownership of personal side projects built without company resources?

In most jurisdictions, an employment agreement cannot claim ownership of inventions developed entirely on your own time, without company equipment, and unrelated to the employer's business. Overly broad clauses attempting to claim all personal work are often unenforceable or void as a matter of public policy.

In most jurisdictions, an employment agreement cannot legally claim ownership of inventions developed entirely on your own time, without company equipment, and unrelated to the employer's business. Overly broad clauses attempting to claim all personal work are often unenforceable or void as a matter of public policy.

The Legal Reality of Invention Assignment Clauses

While many employment contracts include "Invention Assignment" clauses, these are not absolute. Employers often draft these provisions to be as broad as possible to protect their intellectual property (IP). However, courts consistently balance the employer's right to protect their business interests against the employee's right to pursue independent work.

The Three-Prong Test for Ownership

To determine if an employer has a valid claim to your side project, courts typically look at whether the invention meets these three criteria:

No Company Resources: The project was developed entirely on your own time without using company equipment, supplies, facilities, or trade secret information.
No Relation to Business: The invention does not relate directly to the employer's business or their anticipated research and development.
No Connection to Employment: The invention does not result from any work performed by the employee for the employer.

Key takeaway: If your side project fails even one of these prongs, your employer may have a colorable claim to ownership. Always document your development environment to prove you used personal assets.

Action Item: Review your employment contract for the specific definition of "Inventions" or "Developments." If the definition includes "all work created during the term of employment," it is likely overbroad and potentially unenforceable.

State-Specific Protections

Several states have enacted legislation specifically to prevent employers from overreaching into an employee's personal creative life. These statutes act as a "floor" for employee rights.

State	Relevant Statute	Key Protection
California	Labor Code § 2870	Protects inventions made on own time without company resources.
Illinois	Employee Patent Act	Prohibits assignment of inventions unrelated to employer's business.
Washington	RCW 49.44.140	Limits assignment of inventions developed on own time.
New Jersey	N.J.S.A. 34:1B-265	Protects inventions developed without company resources.

Action Item: Check if your state has a specific "Invention Assignment" statute. If you live in a state like California, your contract cannot override the statutory protections provided by the Labor Code.

Red Flags in Your Employment Agreement

When reviewing your contract, look for these specific red flags that indicate an employer is attempting to overreach:

"Work Made for Hire" language: Clauses that claim ownership of everything you create, regardless of the subject matter or time of creation.
Broad "Scope of Business" definitions: Definitions that include "any business the company may enter into in the future," which is designed to capture any project you start.
Lack of Exclusions: The absence of a "Prior Inventions" schedule where you can list projects you were working on before joining the company.

Audit your contract: Identify the specific clause governing IP ownership.
Create a "Prior Inventions" list: If you have existing projects, disclose them in writing to your employer immediately.
Maintain strict separation: Use a separate laptop, email account, and cloud storage for all personal projects.
Document your hours: Keep a log of when you work on your side project to prove it occurred outside of company time.

Key takeaway: Never use company-provided software licenses (like Adobe Creative Cloud or IDE subscriptions) for your side projects. This creates a direct link to company resources that can be used to claim ownership.

Action Item: If you find an overbroad clause, consult with an employment attorney before signing. You may be able to negotiate an addendum that explicitly excludes your side projects from the assignment clause.

How TermScore Protects Your IP

Navigating the nuances of employment contracts is complex, and missing a single clause can cost you the rights to your own innovation. TermScore uses advanced AI to instantly analyze your employment agreements, flagging overbroad invention assignment clauses and identifying potential risks to your personal side projects. By providing clear, actionable insights, TermScore ensures you understand exactly what you are signing before you commit.