What states offer the most protection for employee-created IP?

California, Washington, Illinois, Delaware, and New Jersey have specific statutes that limit an employer's ability to claim ownership of inventions created on an employee's own time without using company resources.

How can I tell if my contract claims my side projects?

Look for an 'Invention Assignment' or 'Proprietary Information' clause. If the language includes phrases like 'any and all inventions conceived during the term of employment,' your employer may be asserting ownership over your personal 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.

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 my employment NDA cover intellectual property created on my own time?

Q: Does my employment NDA cover intellectual property created on my own time?

Generally, no, provided the work was created entirely on your own time, without company equipment, and does not relate to the employer's business. However, broad 'Invention Assignment' clauses in your contract may legally claim ownership of your side projects regardless of when they were created.

Whether your employment agreement covers intellectual property (IP) created on your own time depends on the specific language of your 'Invention Assignment' clause and your state's labor laws. While many contracts attempt to claim everything you create during your employment, these clauses are often limited by state statutes that protect work created independently, without company resources, and unrelated to the employer's core business.

Understanding Invention Assignment Clauses

Most employment contracts contain an Invention Assignment clause, which is distinct from a standard Non-Disclosure Agreement (NDA). While an NDA protects company secrets, an Invention Assignment clause dictates who owns the IP you create. Employers use these to ensure that any innovation developed while you are on their payroll belongs to them.

Common Red Flags in Your Contract

Overbroad Scope: Clauses that claim ownership of 'any and all inventions' conceived during your employment, regardless of the subject matter.
Equipment Clauses: Language that claims ownership if you used even 'minimal' company resources, such as a company-issued laptop or software license.
Time-Based Claims: Provisions that define your employment as a 24/7 obligation, effectively claiming everything you produce during your tenure.

Key takeaway: If your contract does not explicitly exclude inventions created on your own time without company resources, you are at risk of your employer claiming ownership of your side projects.

Action Item: Search your contract for the words 'Invention,' 'Assignment,' or 'Intellectual Property.' If you find a clause that does not include an 'exclusion' section, you should consult with an attorney or use an analysis tool to identify the scope of the claim.

State-Specific Protections

Several U.S. states have enacted laws that override overly aggressive employment contracts. These statutes typically protect your personal IP if you meet three specific criteria:

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 directly to the employer's business or anticipated research and development.

State	Key Statute	Protection Level
California	Labor Code 2870	High (Strong protection for personal IP)
Washington	RCW 49.44.140	High (Strict limits on assignment)
Illinois	765 ILCS 1060/2	Moderate (Requires specific notice)
New Jersey	N.J.S.A. 34:1B-265	Moderate (Protects independent work)

Action Item: Check if your employment contract includes a 'Notice' provision. In states like Illinois, employers are legally required to provide you with a written notice explaining your rights under the state's invention assignment statute at the time of signing.

How to Protect Your Side Projects

If you are planning to build a side project, you must ensure you are not inadvertently assigning it to your employer. Follow these steps to maintain ownership:

Document Everything: Keep a log of hours spent on your project to prove it was done outside of work hours.
Use Personal Hardware: Never use your work laptop, company-provided cloud storage (like Slack or Google Drive), or company software licenses for your personal work.
Disclose Early: If your project is in a different industry, consider disclosing it to your employer and obtaining a written waiver or 'carve-out' to avoid future litigation.

Key takeaway: Even if you are in a protected state, using a company-issued laptop to write code for a side project can create a 'nexus' that allows an employer to claim ownership of your work.

Action Item: Create a 'Personal IP Disclosure' document. If you have existing side projects, list them in an addendum to your employment contract to explicitly exclude them from the scope of your employment agreement.

The Role of AI in Contract Analysis

Manually reviewing employment agreements for hidden IP traps is time-consuming and prone to human error. TermScore allows you to upload your employment contract and instantly identify overbroad Invention Assignment clauses, potential conflicts with state law, and hidden risks to your personal intellectual property. By leveraging AI-powered analysis, you can understand exactly what you are signing before you commit to a new role or launch your next venture.