What is an 'Invention Assignment' clause?

An Invention Assignment clause is a legal provision in your employment contract that automatically transfers ownership of any intellectual property you create during your employment to your employer, provided it relates to their business or uses their resources.

How can I protect my side projects?

You can protect side projects by ensuring they are completely unrelated to your employer's business, using only personal equipment, working entirely outside of business hours, and negotiating a 'Prior Inventions' disclosure or an IP carve-out in your employment contract.

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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 cover personal side projects created during my off-hours?

Generally, yes. If your side project relates to your employer's business, uses their equipment, or was developed during work hours, it is likely covered by your NDA and IP assignment agreement. Most contracts claim ownership of anything 'conceived or reduced to practice' during your employment, regardless of when you worked on it.

The Anatomy of IP Ownership Clauses

Most employment agreements contain two distinct but related sections: the Non-Disclosure Agreement (NDA) and the Invention Assignment Agreement. While the NDA restricts you from sharing trade secrets, the Invention Assignment clause is what actually strips you of ownership of your side projects.

Key Indicators of Employer Ownership

Scope of Business: If your project falls within the 'actual or anticipated' business of your employer, they have a strong claim.
Resource Usage: Using company laptops, software licenses, or proprietary data is a definitive trigger for employer ownership.
Time Allocation: Even if done on weekends, if the project is deemed an extension of your professional duties, courts often rule in favor of the employer.

Key takeaway: Never assume that 'off-hours' work is safe. If your employer can prove you used their knowledge, tools, or time, they can legally claim your side project as their own intellectual property.

Action Item: Review your contract for a section titled 'Proprietary Information and Inventions Agreement' (PIIA) and highlight any language that mentions 'work product' or 'developments' created during your term of employment.

Jurisdictional Protections: The California Exception

Not all states treat IP assignment clauses the same way. California, for example, provides statutory protection for employees under California Labor Code Section 2870.

Jurisdiction	Protection Level	Key Limitation
California	High	Must not relate to employer's business or result from work performed for employer.
New York	Moderate	Strictly interpreted based on contract language.
Delaware	Low	Employer-friendly; contract language usually prevails.
Washington	Moderate	Requires specific notice of IP assignment limitations.

Action Item: Check if your state has an 'Invention Assignment Statute.' If you live in a state like California, Illinois, or Washington, your employer may be legally prohibited from claiming ownership of inventions created entirely on your own time without company resources.

How to Safely Develop Side Projects

If you are planning to launch a side project while employed, you must establish a clear 'firewall' between your professional duties and your personal innovation.

Use Personal Hardware: Never touch your work laptop for side project development. Use a separate machine.
Document Everything: Maintain a log of hours worked on your project to prove they fall outside of your contracted work hours.
Avoid Company IP: Do not use any proprietary algorithms, customer lists, or internal methodologies from your employer.
Disclose Prior Inventions: If you had the idea before you were hired, ensure it is listed in the 'Prior Inventions' exhibit of your employment contract.

Key takeaway: The burden of proof is often on you to demonstrate that your project is independent. Keep a digital paper trail that proves your project was developed in isolation from your employer's resources.

Action Item: Create a 'Prior Inventions' disclosure document today. Even if you haven't started the project yet, documenting the concept's origin can serve as vital evidence if a dispute arises later.

When to Seek Legal Counsel

If your side project has significant commercial potential or involves technology similar to your employer's, you should not rely on general advice. You need a specific review of your employment contract to identify 'carve-outs' or potential conflicts of interest.

TermScore can automatically analyze your employment contract to identify aggressive IP assignment clauses and highlight potential risks to your side projects. By uploading your agreement, you can instantly see if your employer's language is standard or overly restrictive, allowing you to negotiate better terms or protect your intellectual property before you start building.