What makes an IP assignment clause unenforceable?

An IP assignment clause is typically unenforceable if it attempts to claim inventions unrelated to the employer's business, developed without company equipment, and created outside of working hours.

How can I protect my side projects from my employer?

Ensure your side projects are developed on personal hardware, outside of business hours, and are entirely unrelated to your employer's current or anticipated research and development.

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.

Can an employment NDA legally claim ownership of projects built on my own time?

Q: Can an employment NDA legally claim ownership of projects built on my own time?

Generally, no. Most jurisdictions, such as California, prohibit employers from claiming ownership of inventions created entirely on your own time without using company resources or trade secrets. However, overly broad contract language can create legal ambiguity that requires professional review.

Generally, no. Most jurisdictions, such as California (Labor Code Section 2870), prohibit employers from claiming ownership of inventions created entirely on your own time without using company resources or trade secrets. However, overly broad contract language can create legal ambiguity that requires professional review to ensure your rights are protected.

The Legal Framework of IP Ownership

Employment contracts often bundle Non-Disclosure Agreements (NDAs) with Intellectual Property (IP) Assignment clauses. While an NDA protects company secrets, an IP assignment clause dictates who owns the code, designs, or inventions you create. The default rule in many jurisdictions is that if you are hired to invent, the employer owns the output. However, this does not grant them a blanket claim over every idea you have.

The Three-Prong Test for Ownership

In states like California, Washington, and Illinois, legislation specifically limits an employer's reach. To maintain ownership of your side project, you must typically satisfy these three criteria:

No Company Resources: You did not use company equipment, supplies, facilities, or trade secret information.
Outside Working Hours: The work was performed entirely on your own time, not during your contracted hours.
No Relation to Business: The invention does not relate directly to the employer's business or their actual or demonstrably anticipated research and development.

Key takeaway: If your side project is even tangentially related to your employer's core product, you are in the "danger zone" for litigation, regardless of whether you used company laptops.

Action Item: Audit your current employment agreement for the phrase "all work created during the term of employment." If this phrase exists without carve-outs, you should seek a formal written amendment or a "Prior Inventions" disclosure.

Comparing Standard Clauses

Clause Type	Scope	Risk Level
Narrow Assignment	Limited to work related to employer business	Low
Broad Assignment	Includes all work created during employment	High
Prior Inventions	Excludes projects created before start date	Essential

Red Flags in Your Employment Contract

Many employers use "boilerplate" contracts that are intentionally over-broad to discourage employees from moonlighting. You should look for these specific red flags:

"Work Made for Hire" ambiguity: Language that claims ownership of "all intellectual property conceived or reduced to practice" during your employment.
Lack of Carve-outs: The absence of an "Excluded Inventions" section where you can list your existing side projects.
Broad Definition of Business: Definitions that include "any business the company may enter into in the future," which effectively captures almost any software or creative project.

How to Mitigate Risk

Document Everything: Keep a log of hours worked on your side project to prove it occurred outside of business hours.
Use Personal Hardware: Never install proprietary company software or use company-licensed tools on the machine used for your side project.
Disclose Early: If you have a significant side project, disclose it to your employer in writing and ask for a written acknowledgment that it falls outside the scope of your employment.

Key takeaway: Never assume that a verbal "it's fine" from your manager is legally binding. Always get a written waiver or a signed disclosure document.

Action Item: Create a "Prior Inventions" document today, listing every project you own, and send it to your HR department to establish a paper trail of your pre-existing IP.

Jurisdictional Nuances

While California provides strong protections for employees, other states are more employer-friendly. In states without specific statutes like Labor Code 2870, the common law "shop right" doctrine may apply. This doctrine can grant an employer a non-exclusive, royalty-free license to use an invention if you used company resources to develop it, even if they don't own the patent outright.

Always check your state's specific labor laws. If you are in a state with weak IP protections, your contract language becomes the primary governing document, making it even more critical to negotiate specific exclusions before signing.

Leveraging Technology for Contract Clarity

Understanding the nuances of IP assignment and NDA clauses is difficult without a legal background. TermScore simplifies this process by automatically analyzing your employment contracts to identify overly broad IP assignment clauses, missing carve-outs, and restrictive covenants that could threaten your side projects. By using TermScore, you can gain the clarity needed to negotiate your contract with confidence and protect the work you build on your own time.