Your company is growing and developing, and you think you need invention assignment agreements to protect you on the way; here’s an invention assignment agreement template to get you started!
You may know what an inventions agreement is but are more familiar with referring to it by a different name. Most tech companies and professionals that work with these agreements daily are more likely to refer to it as a PIIA – “proprietary information and invention assignment” agreement. An invention agreement is a contract or inclusion in a contract in which employees, independent contractors, or freelancers assign all work and intellectual property rights to the company. By entering into this agreement, the employee is stating that everything created by them while rendering their services to the employer belongs to the employer’s company.
The main reason for entering into this agreement is to protect your company’s interests. Invention agreements can apply to many different areas of an employee’s work, including but not limited to research, works of authorship, inventions, discoveries, programs, applications, ideas, and more. In addition, companies provide many resources, including monetary funds, when they hire an employee, and it is necessary for the company to protect this investment.
Typically, many companies prefer to enter pre-invention assignment agreements when they employ a new worker to invent, and it is good practice to do so. This agreement is signed before the employee has invented the product, and it is important to ensure that what the employee invents under contact, on the company’s time, or using company resources is owned by the company. An invention agreement will prevent the employee from leaving the company with the invention, patenting the invention, or becoming your competition. You can, however, introduce this agreement during or after the inventive process.
Invention agreements are valuable to many businesses, but more so to businesses that rely heavily on innovations and inventions. In this case, making invention agreements a standard part of the paperwork for new hires may be a necessary inclusion to protect your company’s interests.
There are many more reasons you would want to use an invention agreement. As reiterated above, you may use such agreements when hiring independent contractors or freelancers who are not permanent employees. Invention agreements are especially necessary when hiring a contractor or freelancer to create or improve solutions that may need copyright or patent protection.
As important as it is to be aware of when you need to use an invention agreement, it is just as necessary to know when not to use it. Trust is an important part of working relationships, and it is not always a good idea to strain these relationships with such agreements or clauses. These are some of the instances where you may decide not to use one:
Invention Assignment Agreements are legally binding and therefore enforceable. However, several states have laws that govern the scope of these agreements, and these limitations are important to consider depending on the state in which your business is.
In California, the Labor Code provides that an invention agreement is not enforceable if an employee developed the invention on their own time (not within working hours) and did not use the company’s resources. However, there are exceptions to this law, and you should familiarize yourself thoroughly with the requirements in state laws that are applicable to your business.
Before you write an invention agreement, you must communicate and agree with your employee or the other party involved to ensure that the proposed terms are agreeable to them. Doing this ensures no friction in the working relationship and makes the drafting of the contract an easier feat.
Decrease your workload and simplify the process by downloading a FREE invention assignment agreement sample that you can edit to suit your company’s needs.
What to include in an employee invention agreement largely depends on your business. However, below are some main things you can include.
An assignment provision is an uncompromisable provision requiring employees to assign ownership of inventions made while employed at the company to the company. This is the provision that ensures your ownership over the work of your employees.
This provision conveniently requires that employees disclose inventions, innovations, or improvements that they make to your company. You should draft this provision to ensure that disclosure is made quickly so that your company can apply the necessary protections.
Some other provisions you can include are a confidentiality provision – requiring employees to keep all proprietary information confidential, and a power-of-attorney provision – giving you the right to exercise your ownership rights with or without the employee’s assistance or approval. Again, please consider that this is a non-exhaustive list but just a few main things this agreement should have.
Now that you have a clear understanding of an invention assignment agreement, here’s a free invention assignment agreement pdf and word document template to download that can be edited to suit your company’s specific needs.
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Frequently Asked Questions
A confidentiality and invention assignment agreement, more popularly known as PIIA, is an agreement between employers and their employees (this could be permanent staff, independent workers, or freelancers). The employees assign their intellectual property rights regarding inventions they create while underemployment, to their employer. This means that the employer owns the inventions created through their worker’s services to them. It also creates a confidential relationship between the parties to protect proprietary information.
You can use an invention assignment agreement template and redact or include relevant provisions. You may also wish to contact a legal professional where your working relationship is complicated.
