What is the difference between an NDA and an Invention Assignment Agreement?

An NDA restricts you from sharing company secrets. An Invention Assignment Agreement (often bundled in employment contracts) transfers ownership of anything you create—even on your own time—to the employer, provided it relates to their business or uses their equipment.

How can I protect my side projects from my employer?

Ensure your project is completely unrelated to your employer's business, use your own personal equipment and software, work entirely outside of business hours, and request a written 'carve-out' or IP waiver from your employer if you intend to commercialize your work.

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.

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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. One-time purchases are also available: a single score for $5 or a 5-pack for $15, with no subscription required.

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.

Do employment NDAs automatically cover personal side projects built without company resources?

Q: Do employment NDAs automatically cover personal side projects built without company resources?

No. Standard NDAs protect confidential company information, not your personal intellectual property. However, many employment contracts include 'Invention Assignment' clauses that can claim ownership of side projects regardless of resources used. You must review your specific agreement for these provisions.

Do employment NDAs automatically cover personal side projects?

No. A standard Non-Disclosure Agreement (NDA) is designed to protect a company’s trade secrets and proprietary information, not to claim ownership of your personal work. However, most employment contracts include an Invention Assignment Agreement, which is a separate legal mechanism that can grant your employer ownership of your side projects, even if you built them on your own time using your own equipment.

The Critical Distinction: NDA vs. Invention Assignment

Employees often confuse confidentiality obligations with ownership rights. Understanding the difference is the first step in protecting your intellectual property.

What an NDA Actually Does

Restricts you from disclosing company-specific data, client lists, or internal processes.
Prevents you from using the company's proprietary technology in your own projects.
Remains in effect during and often for 1–3 years after your employment ends.

What an Invention Assignment Clause Does

Automatically transfers ownership of "Inventions" to the employer.
Defines "Inventions" broadly to include software, designs, and business processes.
Often triggers if the work "relates to the company's business" or "results from tasks assigned to the employee."

Key takeaway: An NDA prevents you from stealing company secrets, but an Invention Assignment clause can allow the company to steal your personal project. Always check your contract for an 'Inventions' or 'Proprietary Rights' section.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific phrases that signal potential danger for your side projects:

"Relates to the actual or anticipated business": This is dangerously broad. If you work for a software company, any code you write could be argued to "relate" to their business.
"Developed during the term of employment": This phrasing does not distinguish between work hours and personal time.
"Resulting from any work performed for the Company": This creates a nexus between your job duties and your side project that can be exploited in litigation.

Clause Type	Primary Purpose	Risk to Side Projects
NDA	Confidentiality	Low (unless you use company data)
Invention Assignment	Ownership	High (often claims all IP)
Non-Compete	Market Protection	Medium (limits your ability to launch)

Jurisdiction-Specific Protections

Some states provide statutory "safe harbors" that limit how aggressively an employer can claim your side projects. For example, California Labor Code Section 2870 is the gold standard.

California Labor Code Section 2870

This law states that an employer cannot require you to assign rights to an invention if:

The invention was developed entirely on your own time.
No company equipment, supplies, facilities, or trade secret information was used.
The invention does not relate to the employer's business or actual/anticipated research.
The invention does not result from any work performed for the employer.

Action Item: Check if your state has a statute similar to California's Section 2870. If you live in a state without these protections, your contract's language is the final word.

How to Protect Your Side Projects

If you are planning to launch a side project, follow these four steps to minimize legal exposure:

Audit your contract: Identify if you signed an Invention Assignment agreement.
Use personal hardware: Never use a company-issued laptop, cloud storage, or software license for your side project.
Document your time: Keep a log showing your project was developed outside of your 9-to-5 working hours.
Seek a carve-out: If your project is significant, ask your employer for a written waiver or "carve-out" confirming they have no claim to the specific project.

Key takeaway: Never assume your side project is safe just because you worked on it at home. If the project is in the same industry as your employer, you are at high risk of an ownership dispute.

Automate Your Contract Review

Manually parsing dense legal jargon to find hidden IP assignment clauses is time-consuming and prone to error. TermScore uses advanced AI to instantly scan your employment agreements, flagging risky invention assignment clauses and restrictive covenants that could jeopardize your side projects. Upload your contract to TermScore today to get a clear, plain-English breakdown of your rights and risks before you commit to your next big idea.