What states offer the most protection for employee inventions?

California, Washington, Illinois, Delaware, Kansas, Minnesota, New Jersey, North Carolina, and Washington offer specific statutory protections that limit an employer's ability to claim ownership of inventions developed on an employee's own time without company equipment.

How can I protect my side projects from my employer?

Review your employment contract for IP assignment clauses, document your development process, use personal hardware and software, and ensure your project is outside the scope of your employer's current or anticipated business.

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.

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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 my employer legally claim ownership of personal side projects built without company resources under an NDA?

Q: Can my employer claim ownership of personal side projects built without company resources?

Generally, no, provided the project does not relate to the employer's business and uses no company resources. However, broad 'Invention Assignment' clauses in your employment agreement may legally grant the employer ownership regardless of these factors, depending on your state's labor laws.

Can my employer legally claim ownership of personal side projects?

In most cases, your employer cannot claim ownership of side projects developed entirely on your own time, using your own equipment, and unrelated to your employer's business. However, if your employment contract contains a broad 'Invention Assignment' clause, you may have inadvertently signed away rights to everything you create, regardless of resources used.

Key takeaway: An NDA is a confidentiality agreement, but an 'Invention Assignment' clause is a property transfer. Always check for the latter, as it is the primary legal mechanism employers use to claim your personal work.

The Legal Framework of IP Assignment

Employment contracts typically include an Intellectual Property (IP) Assignment clause. This clause dictates that any work product created during the term of employment belongs to the company. While this is standard for work performed within the scope of your job duties, companies often draft these clauses to be overly broad.

The 'Scope of Business' Test

Courts generally evaluate three factors to determine if an employer has a valid claim to your side project:

Resource Usage: Did you use company laptops, servers, proprietary software, or office space?
Temporal Proximity: Was the work performed during your contracted working hours?
Business Relevance: Does the project compete with, or relate to, the current or anticipated business of your employer?

Action Item: Audit your current employment agreement. If the assignment clause does not explicitly exclude projects developed on your own time, you are at risk.

State-Specific Protections

Several U.S. states have enacted statutes that override overly broad employment contracts. These laws provide a 'safe harbor' for employees. If you live in a state like California (Labor Code Section 2870), an employer cannot require you to assign rights to an invention that you developed entirely on your own time without using the employer's equipment or trade secrets.

State	Key Protection Statute
California	Labor Code § 2870
Washington	RCW 49.44.140
Illinois	765 ILCS 1060/2
New Jersey	N.J.S.A. 34:1B-265

Action Item: Research your specific state's labor code regarding 'employee invention assignments.' Do not assume your contract's language is legally enforceable if it contradicts state law.

Best Practices to Protect Your Work

To ensure your side projects remain yours, you must maintain a strict separation between your professional and personal development environments.

Use Personal Hardware: Never install development tools or store code on a company-issued laptop.
Document Everything: Keep a timestamped log of your development hours. If challenged, you must prove the work was done outside of company time.
Avoid Company IP: Ensure your project does not utilize any trade secrets, proprietary algorithms, or internal data you accessed through your employment.
Disclose (If Necessary): If your project is in a grey area, consider a formal disclosure to your HR or legal department to request a written waiver of interest.

Key takeaway: If you are building a project that could be considered a 'competing product,' no amount of personal hardware will protect you from a breach of non-compete or fiduciary duty claims. Consult an attorney before launching.

When to Seek Legal Counsel

If your side project has significant commercial potential or if you are concerned about a potential conflict of interest, do not rely on general advice. You should seek counsel if:

Your employer is a direct competitor to your side project.
You have access to highly sensitive trade secrets that could be 'tainted' by your personal work.
Your contract contains a 'Pre-existing Inventions' disclosure section that you failed to fill out upon hiring.

Action Item: If you have a project you are worried about, create a 'clean room' environment. Document that you are not using company resources and that the project is distinct from your job description.

How TermScore Simplifies Contract Analysis

Understanding the nuances of IP assignment clauses is difficult without a legal background. TermScore uses advanced AI to scan your employment agreements, highlighting risky IP assignment language and identifying clauses that may jeopardize your personal projects. By providing a clear, plain-English breakdown of your obligations, TermScore helps you understand your rights before you start building. Upload your contract today to see exactly what your employer is claiming.