Tips for Writing an Effective Employee Inventions Assignment Clause
Define the Subject MatterWhenever you want to get something, using a legal instrument such as an inventions assignment clause, it is very important to use words that accurately define what you want to get. In this case, the employer wants to get an exclusive right to any inventions made by an employee that are relevant to the employer's business. For example, the following language might be used: "all inventions, discoveries, developments, writings, computer programs and related documentation, designs, ideas, and any other work product made or conceived by EMPLOYEE during the term of employment". See Preston v. Marathon Oil (Fed. Cir. 2012).
Provide ConsiderationWhenever you want to get something, using a legal instrument, it is very important to give something in return ("consideration"). Providing for mutual consideration, within the legal instrument, is one of the requirements for forming a binding and enforceable contract. However, in case one of the parties does not provide -sufficient- consideration, a court still may decline to enforce the contract as being "unconscionable." Thus, it is important to give -due- consideration. For example, in an employment agreement for an at-will employee, simply being hired or continued in employment may - in many States - suffice as consideration for an assignment of intellectual property obtained in the course of employment.
Limit the Subject MatterAnother reason why a court may decline to enforce an otherwise valid contract, is if the contract seems to "over-reach." For example, a contract requiring an employee to assign all inventions, whenever made and for whatever purpose, might be seen as over-reaching. Thus, it is important to -limit- the scope of an inventions assignment agreement, so that to a disinterested observer (a court), the contract will appear to be fair. For example, the following language might be used: "(1) relating to EMPLOYER's
present or reasonably anticipated business, or (2) made or created with the use of EMPLOYER's Confidential Information, equipment, supplies, or facilities." See, again, Preston v. Marathon Oil Co.
Make Sure You Get it NowOne pitfall in writing an inventions assignment clause is that this is a -prospective- clause. It is meant to include things that the employee has not yet done. In a relatively recent case between a major university and a large pharmaceutical company, this pitfall prevented the university obtaining its rights to an invention made by the university employee using university resources. See Stanford v. Roche, 131 S.Ct. 2188 (2011). The drafter of that employment agreement merely established an obligation for the employee -to assign rights-, rather than effecting a -present assignment of rights-. By contrast, the following language has been found effective for a present assignment: "EMPLOYEE agrees to promptly disclose and does hereby assign to EMPLOYER all Intellectual Property, and EMPLOYEE agrees to execute such other documents as
EMPLOYER may request in order to effectuate such assignment."