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

An NDA protects confidential information from being disclosed, while an IP Assignment Agreement dictates who owns the intellectual property you create during your employment.

How can I protect my side projects from my employer?

Review your contract for 'Invention Assignment' clauses, ensure you use zero company equipment, work entirely outside of business hours, and seek a written carve-out or 'Prior Inventions' disclosure if possible.

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.

Does an employment NDA prevent me from working on personal side projects that do not use company resources?

Q: Does an employment NDA prevent me from working on personal side projects that do not use company resources?

Not necessarily, but an NDA is often paired with a Proprietary Information and Inventions Assignment Agreement (PIIAA). If your contract contains an 'Assignment of Inventions' clause, the company may claim ownership of your side projects regardless of whether you used company resources.

Does an employment NDA prevent me from working on personal side projects?

An employment NDA alone typically does not prevent you from working on side projects, but it is rarely the only document you signed. Most employment contracts include an 'Invention Assignment' clause that may grant your employer ownership of any work created during your employment, even if it is unrelated to your job and uses none of their resources.

Understanding the Legal Framework

To determine if your side project is safe, you must distinguish between an NDA and an Invention Assignment Agreement. An NDA is designed to prevent the disclosure of trade secrets. An Invention Assignment Agreement is designed to transfer ownership of your creative output to the company.

The Scope of Invention Assignment Clauses

Many standard employment agreements contain broad language that captures almost everything you create. These clauses often include:

Scope: Any invention, discovery, or improvement created during the term of employment.
Connection: Language that includes work 'related to the company's business' or 'demonstrably anticipated research.'
Resources: Explicit claims to any work created using company equipment, supplies, or proprietary information.

Key takeaway: If your contract states that you assign all inventions created 'during the term of employment' without a carve-out for personal projects, you are legally vulnerable regardless of whether you used company resources.

Action Item: Locate your 'Proprietary Information and Inventions Assignment Agreement' (PIIAA) and highlight any section titled 'Assignment of Inventions' or 'Intellectual Property Rights.'

Jurisdictional Protections: The California Exception

Your location significantly impacts your rights. California, for example, provides statutory protection for employees under Labor Code Section 2870.

Jurisdiction	Protection Level	Key Requirement
California	High	Must not relate to employer's business or result from work performed for employer.
Washington	Moderate	Protects inventions developed entirely on own time without company resources.
New York	Low	Generally enforces contract language as written; fewer statutory carve-outs.

In states like California, an employer cannot force you to assign rights to an invention developed entirely on your own time without using the employer's equipment, supplies, facilities, or trade secret information, provided the invention does not relate to the employer's business.

Action Item: Search your state's labor code for 'Employee Invention Assignment' statutes to see if your state provides baseline protections that override restrictive contract language.

How to Safely Manage Side Projects

If you intend to pursue a side project, you must minimize the risk of a legal claim. Follow this protocol to maintain a clear separation between your employment and your personal work.

Review the 'Prior Inventions' Schedule: Most contracts have an exhibit where you list inventions created before your start date. Ensure your current project is not already covered by a previous agreement.
Strict Resource Separation: Never use company laptops, software licenses, cloud storage, or email accounts for your side project.
Time Management: Perform all work outside of your contracted hours. Working on a side project during a lunch break or while on the clock is a common trigger for ownership claims.
Documentation: Keep a log of your development process, including timestamps and proof that no company resources were utilized.

Key takeaway: If your side project is in the same industry as your employer, the risk of a 'conflict of interest' or 'breach of fiduciary duty' claim is significantly higher, even if you own the IP.

Action Item: Create a 'clean room' environment for your project—use a personal computer, personal internet connection, and personal software subscriptions only.

When to Seek Legal Counsel

If your side project has significant commercial potential or if you are unsure about the breadth of your restrictive covenants, do not rely on self-interpretation. A lawyer can help you negotiate a 'carve-out' or a formal waiver from your employer.

Red Flag 1: Your contract defines 'Inventions' as anything created 'at any time' during your employment.
Red Flag 2: Your job description is broad enough to encompass your side project.
Red Flag 3: You have signed a non-compete agreement in addition to an NDA.

Action Item: If you identify these red flags, consult with an employment attorney before launching your project publicly or seeking investment.

Navigating the intersection of employment law and intellectual property is complex, but you don't have to do it alone. TermScore uses advanced AI to analyze your specific employment contracts, flagging restrictive invention assignment clauses and potential conflicts of interest so you can understand your rights before you start your next project.