Does my company own my side project's IP? - Invention assignment in CA

Asked about 1 year ago - San Francisco, CA

I work at a large tech company that is primarily in the software business. I signed an assignment of invention agreement that says they own any inventions of mine that "relate to the company's business" present or future.

As a side project, I'm developing software that is unlike anything they currently sell or plan to sell, not even the same category. It may or may not be patentable, I'm not sure. And I also plan on trademarking certain terms it uses.

My software isn't related to my company's business. However, because my software is useful to anyone who sells things online (which my company does), does that make it related? Isn't that too broad?

Is it true that California limits employers' rights here, regardless of agreement language?

Thanks for your help!

Attorney answers (5)

  1. Daniel Nathan Ballard

    Contributor Level 20

    3

    Lawyers agree

    Answered . I assume that California law applies and that you signed an agreement with your former employer requiring you to assign to your employer, to the fullest extent permitted by law, all inventions created by you while employed.

    Under California law the only inventions that do NOT have to assigned in that situation are those that (1) the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information AND (2) do not relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer, or result from any work performed by the employee for the employer. Labor Code 2870.

    You, as the employee, have the burden to prove that your invention falls within this exception to the agreement that you signed. Labor Code 2872. So, right from the get-go, YOU have the burden to prove that you have the right to claim ownership of your invention.

    In short, even if you developed an invention on your own time and with your own resources, if your invention “relates” to your former employer’s “business, or actual or demonstrably anticipated research or development” then the agreement you signed controls and requires you to assign [i.e., give away all of your ownership interest in] your invention to your former employer—and it may also, depending on your contract, obligate you to disclose the invention to your former employer and cooperate with it in any patenting efforts [even if you’re no longer employed by the company].

    When does an employee’s invention “relate to” his employer’s “business, or actual or demonstrably anticipated research or development?” Courts interpret that section of the law very, very broadly. See Cubic Corp. v. Marty, 185 Cal. App. 3d 438 (1986); Cadence Design Sys., Inc. v. Bhandari, No. 07-0823, 2007 WL 3343085 (N.D. Cal. Nov. 8, 2007). You should read the latter court ruling via the link below. And then speak with your own California-licensed intellectual property attorney. Good luck.

    The above is general information ONLY and is not legal advice, does not form an attorney-client relationship, and... more
  2. S David Goldenberg

    Contributor Level 6

    1

    Lawyer agrees

    Answered . The first answer is very good at summarizing the law. If your employer has any sort of a decent form, in all likelihood it tracks the CA statutory language the first answer summarized, meaning that the document will assign to the employer all IP it can legally get from you. However, the business reality often varies considerably from company to company. As you can imagine this is a very common issue in the tech area. We have negotiated on behalf of employees several times and were able to obtain a release from the employer of the IP / rights in the new idea. As the other answers state, you should consult an attorney who understands intellectual property law. However, with the right approach, even if the law is not in your favor, you may be able to secure rights in the software you have developed.

    Note, the communication is intended for educational purposes only as a general overview of the matter discussed.... more
  3. Dana Howard Shultz

    Contributor Level 20

    Answered . It appears that your employer - like many others - provided an assignment agreement that tracks applicable provisions of the California Labor Code. (Please see the post at the link below.)

    Whether your software relates to your employer's business is a fact-specific issue. A lawyer would need to examine the agreement, your software, and the employer's lines of business to render an opinion - and, even then, the lawyer may not be able to say, definitively, whether you have retained all rights to your software.

    This information does not constitute legal advice and does not establish an attorney-client relationship.
  4. Bruce E. Burdick

    Pro

    Contributor Level 20

    1

    Lawyer agrees

    Answered . I think you have an uphill battle. The large tech company you work for will likely think it owns this software and deem you disloyal if you try to keep this. You need to seriously consider your job and career and what you will do if you get fired either directly or indirectly because of this.

    The law is easily found on this, but supplying is to your situation will take a legal review by an attorney near you. I would suggest you get top talent for this do your attorney and his firm will command immediate respect even by s large tech company. I suggest you call Benjamin Riley at Cooley Goodward . Or if you cannot afford big form rates, you might try Andrew Jacobsen,a frequent contributor here on Avvo from Oakland. There is no reason to go outside the Bay Area. Good Luck.

    I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is... more
  5. Sreenivasarao Vepachedu

    Contributor Level 14

    Answered . It depends. Consult with an ip attorney to determine if you are obligated to assign to your employer.

    This is not a legal advice or solicitation, and does not create an attorney-client relationship. Consult with an... more

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