What states provide the strongest protection for employee-created inventions?

California, Washington, Illinois, Delaware, Kansas, Minnesota, New Jersey, North Carolina, and Washington state have statutes that limit an employer's ability to claim ownership of inventions created entirely on an employee's own time without company resources.

How can I protect my side projects from employer claims?

Review your employment agreement for 'Invention Assignment' clauses, ensure you use zero company resources, document your development process, and seek a written 'IP carve-out' or 'Prior Inventions' disclosure from your employer.

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Does an employment NDA automatically grant my employer ownership of personal projects created entirely on my own time without company equipment?

Q: Does an employment NDA automatically grant my employer ownership of personal projects created on my own time?

No. An NDA typically protects confidential information, not IP ownership. However, 'Invention Assignment' clauses in your employment contract often claim ownership of side projects if they relate to the company's business, even if created on your own time and equipment.

Does an employment NDA automatically grant my employer ownership of personal projects?

No. A standard Non-Disclosure Agreement (NDA) is designed to protect trade secrets and confidential information, not to assign ownership of your intellectual property. However, most employment contracts include a separate Invention Assignment Agreement. If your contract contains broad language, your employer may legally claim ownership of projects created on your own time if they relate to the company’s current or anticipated business, regardless of whether you used company equipment.

The Distinction Between NDAs and Invention Assignment Clauses

It is a common misconception that an NDA covers everything you create. In reality, these are two distinct legal instruments:

NDA (Non-Disclosure Agreement): Restricts you from sharing proprietary company data. It does not inherently transfer ownership of your creative output to the employer.
Invention Assignment Clause: This is the "IP killer." It explicitly states that any work product, invention, or software created during your employment—and sometimes even for a period after—belongs to the company.

Key takeaway: Check your contract for a section titled "Proprietary Information and Inventions Agreement" (PIIA). That is where the actual ownership claims reside, not in the NDA.

Criteria Employers Use to Claim Your Work

Even if you work on your own time, employers often use specific criteria to assert ownership. If your project meets any of the following, your employer may have a legal claim:

Business Relevance: The project relates directly to the company’s business or actual/demonstrably anticipated research.
Company Resources: You used company laptops, software licenses, cloud servers, or proprietary data to build the project.
Scope of Employment: The project resulted from work performed for the employer.

Factor	Risk Level	Mitigation Strategy
Company Laptop	High	Use a personal machine exclusively.
Company Software	High	Use open-source or personal licenses.
Work-Related Topic	Medium	Document the project as a hobby.
Company Time	Extreme	Strictly separate work and personal hours.

Key takeaway: If you use a company-issued laptop to write a single line of code for a side project, you have potentially handed the keys to that project to your employer.

Jurisdictional Protections: The "Employee-Friendly" States

Several states have enacted legislation that limits the enforceability of broad invention assignment clauses. If you live in one of these states, your employer cannot claim ownership of an invention if you meet specific criteria:

California (Labor Code § 2870): Protects inventions developed entirely on your own time without using company resources, provided the invention does not relate to the employer's business or actual/anticipated research.
Washington (RCW 49.44.140): Similar to California, it voids provisions that require employees to assign rights to inventions developed on their own time without company resources.
Other states: Illinois, Delaware, Kansas, Minnesota, New Jersey, and North Carolina have similar statutes.

Key takeaway: Always verify if your state has a "Labor Code" section governing invention assignments. These statutes often override overly broad contract language.

Steps to Protect Your Intellectual Property

If you are building a side project, follow this process to minimize legal exposure:

Audit your contract: Look for "Invention Assignment" or "Work for Hire" clauses.
Disclose prior inventions: Most contracts have an "Exclusions" or "Prior Inventions" list. Ensure your existing side projects are listed there before you sign.
Strict separation: Never use company email, Slack, or hardware for personal projects.
Document everything: Keep a log of your development hours and the hardware used to prove the work was done on your own time.
Negotiate a carve-out: If you are a developer or creator, ask for an IP carve-out in your employment agreement that explicitly excludes your personal projects.

Key takeaway: If you are starting a new project, send a formal email to your manager or HR department stating that you are working on a personal project that is unrelated to company business and uses no company resources.

How TermScore Can Help

Navigating the dense legalese of employment contracts is difficult, and missing a single clause can cost you the rights to your own work. TermScore uses AI to instantly scan your employment agreements, flagging aggressive invention assignment clauses and identifying potential ownership risks before you sign. Ensure your creative freedom is protected by letting TermScore analyze your contracts today.