What makes an IP assignment clause unenforceable?

An IP assignment clause is often unenforceable if it is overly broad, attempts to claim ownership of inventions unrelated to the employer's business, or violates state-specific labor codes that protect an employee's right to innovate outside of work hours.

How can I protect my side projects from my employer?

Ensure you work exclusively on personal hardware, use personal software licenses, avoid company networks, and document your development process to prove the project is unrelated to your employer's scope of 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.

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.

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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 side projects built without company resources?

Q: Can an employment NDA legally claim ownership of side projects built without company resources?

Generally, no. In many jurisdictions, including California, Illinois, and Washington, laws prohibit employers from claiming ownership of inventions developed entirely on your own time without using company equipment, trade secrets, or resources, provided the work does not relate directly to the employer's business.

In most jurisdictions, an employment agreement cannot legally claim ownership of side projects developed entirely on your own time, using your own equipment, and unrelated to your employer's business. While companies often include broad "Invention Assignment" clauses, state-specific labor laws frequently override these provisions to protect employee innovation.

The Legal Landscape of IP Ownership

Employment contracts often contain "Proprietary Information and Inventions Assignment Agreements" (PIIAA). These clauses are designed to ensure that anything you create while employed belongs to the company. However, these clauses are not absolute. Courts distinguish between work created within the scope of employment and independent creative endeavors.

Key Statutory Protections

Several states have enacted specific legislation to limit the reach of employer IP claims. If you work in these states, your side projects have a higher degree of legal protection:

California (Labor Code Section 2870): Prevents employers from claiming ownership of inventions developed on your own time without using company resources, provided the invention does not relate to the employer's business or anticipated research.
Illinois (Employee Patent Act): Similar to California, it voids any provision in an employment agreement that requires an employee to assign rights to an invention developed entirely on their own time.
Washington (RCW 49.44.140): Provides a "safe harbor" for employees, provided the invention was developed without company resources and does not relate to the employer's business.

Key takeaway: Even if your contract says "all inventions belong to the company," state law may render that clause void if it exceeds the scope of your actual job duties and uses zero company resources.

Action Item: Check your state’s labor code for "Invention Assignment" statutes. If your state has one, your contract cannot legally override it.

The "Scope of Business" Test

The most common point of litigation is the definition of "related to the employer's business." Employers often define this broadly to include any technology they *might* enter in the future. Courts, however, look at the actual, current business activities of the company.

Factor	Favors Employee Ownership	Favors Employer Ownership
Equipment	Personal laptop/software	Company laptop/VPN
Time	Evenings/Weekends	During business hours
Relevance	Unrelated to company products	Directly competes/improves product
Resources	Personal funds/tools	Company servers/proprietary data

How to Maintain Clear Boundaries

To ensure your side project remains yours, you must maintain a strict "firewall" between your professional and personal work.

Hardware Isolation: Never use a company-issued laptop, tablet, or phone for personal development.
Network Security: Do not connect to company VPNs or internal servers while working on your project.
Documentation: Keep a log of your development hours and the tools used. This serves as evidence if a dispute arises.
Disclosure: If your project is borderline, consult with an attorney before signing your contract to request an "IP carve-out" for your specific project.

Key takeaway: The moment you use a company-licensed software tool or a company-provided cloud storage account, you create a "nexus" that allows an employer to claim a legal interest in your work.

Action Item: Audit your current development environment. If you are using company-provided software (like a GitHub Enterprise account or a company-paid IDE license), migrate your project to a personal account immediately.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific red flags that indicate an overreaching IP clause:

"All-Encompassing" Language: Clauses that claim ownership of "any and all ideas, inventions, or concepts conceived during the term of employment."
Lack of Carve-outs: The absence of a schedule or appendix where you can list pre-existing intellectual property.
Broad Non-Compete Ties: Clauses that link IP ownership to non-compete restrictions, effectively preventing you from working on anything that could be considered a "competitor" to the firm.

Protecting Your Future

Navigating the intersection of employment law and intellectual property is complex. You should not have to guess whether your side project is safe. TermScore automatically analyzes your employment contracts to identify overreaching IP assignment clauses, helping you understand your rights before you sign. By flagging restrictive language, TermScore empowers you to negotiate better terms or seek the necessary legal carve-outs to protect your innovations.