Can a California employer require assignment of every invention?
California employers cannot require assignment of every employee invention because section 2870 excludes qualifying own-time, own-resource inventions, subject to its business, research, and work exceptions. On a touch screen, a tap shows all 2 sources in this group. The invention must be developed entirely on the employee's own time without the employer's equipment, supplies, facilities, or trade secret information, and it must neither relate, at the time of conception or reduction to practice, to the employer's business or actual or demonstrably anticipated research or development nor result from any work the employee performed for the employer.
Section 2870(a) frames the carve-out as a limit on what an assignment promise can do. However broadly the contract is written, it does not reach an invention the employee made on their own time and with their own resources unless one of two statutory exceptions applies .
Each section 2870 condition applies separately. An employee's personal laptop and evening work do not by themselves secure the carve-out if the invention relates, at conception or reduction to practice, to the employer's business or actual or demonstrably anticipated research or development, or results from any work performed for the employer. Conversely, use of the employer's equipment, supplies, facilities, or trade secret information defeats the own-resource condition even when the project began at home.
The CIIAA review checklist maps that boundary to the assignment, prior-inventions, and notice provisions of a draft agreement. The OpenAgreements CIIAA is the related form.
Subdivision (b) supplies the teeth: a provision that tries to require assignment of an invention the statute excludes is not merely unenforceable as written but declared against public policy .
The two exceptions are joined disjunctively, and the distinction matters. In Cubic Corp. v. Marty, the Court of Appeal read section 2870 to permit enforcement of an assignment agreement for an invention that relates to the employer's actual or demonstrably anticipated business or results from the employee's work for the employer, so even an invention developed on the employee's own time without the employer's resources is protected only if it neither relates, at conception or reduction to practice, to the employer's business or actual or demonstrably anticipated research or development, nor results from any work the employee performed for the employer . If either condition is present, the employer has a right to the invention under an assignment agreement. On a touch screen, a tap shows all 2 sources in this group.
Section 2871 closes the obvious workaround. An employer cannot demand the void assignment anyway by making the employee sign it to keep the job — a provision void under section 2870 may not be required as a condition of employment or continued employment. On a touch screen, a tap shows all 2 sources in this group.
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Section 2870(a) makes an assignment clause inapplicable to an invention the employee developed entirely on their own time without the employer's equipment, supplies, facilities, or trade-secret information, unless the invention relates, at the time of conception or reduction to practice, to the employer's business or actual or demonstrably anticipated research or development, or results from any work the employee performed for the employer.
Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) 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 (2) Result from any work performed by the employee for the employer.
See Cal. Lab. Code § 2870(a).
Section 2870(b) makes a provision that purports to require assignment of an otherwise-excluded own-time invention against the public policy of the state and unenforceable.
To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.
See Cal. Lab. Code § 2870(b).
Cubic Corp. v. Marty reads section 2870's two exceptions disjunctively: the statute permits enforcement of an employer's assignment agreement for an invention that relates to the employer's actual or demonstrably anticipated business or that resulted from the employee's work for the employer.
Thus, section 2870 permits enforcement of employer assignment agreements for inventions which relate to the “actual” or “demonstrably anticipated” business of the employer or which resulted from work performed by the employee for the employer.
See Cubic Corp. v. Marty, 185 Cal. App. 3d 438 (1986).
Cubic explains that where the invention either comes within the employer's business or results from work the employee did for the employer, the employer has a right to the invention under an assignment agreement.
we construe the statutory language to cover both the situation where the invention comes within the scope of the employer’s business (actual or demonstrably anticipated) and the situation where the invention was not within the usual scope of the employer’s business but resulted from work the employee did for the employer. If either situation is present, then the employer has a right to the invention under an assignment agreement.
See Cubic Corp. v. Marty, 185 Cal. App. 3d 438 (1986).
Section 2871 bars an employer from requiring a provision made void and unenforceable by section 2870 as a condition of employment or continued employment.
No employer shall require a provision made void and unenforceable by Section 2870 as a condition of employment or continued employment.
See Cal. Lab. Code § 2871.
Cubic reaffirms that an agreement to assign an invention falling within section 2870 cannot be made a condition of employment or continued employment.
The Legislature has stated an agreement to assign an invention which falls within Labor Code section 2870 cannot be made a condition of employment or continued employment.
See Cubic Corp. v. Marty, 185 Cal. App. 3d 438 (1986).
Must a California employer notify the employee?
California Labor Code section 2872 requires an employer whose agreement assigns inventions to give the employee written notice of section 2870's carve-out when the agreement is made . The same section places the burden of proof on the employee who later claims the carve-out's protection .
The notice obligation is contemporaneous, not eventual: for an agreement entered into after January 1, 1980 that contains an invention-assignment provision, the written notification must accompany the agreement when it is made. It does not change which inventions are carved out — section 2870 does that — but it ensures the employee is told the carve-out exists .
The allocation of proof cuts the other way. When a dispute arises, the employee who wants the benefit of the own-time carve-out must establish that the invention qualifies — the statute puts that burden on the employee, not the employer .
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Section 2872 requires an employer whose employment agreement, entered into after January 1, 1980, contains an invention-assignment provision to give the employee, at the time the agreement is made, a written notification that the agreement does not apply to an invention qualifying fully under section 2870.
If an employment agreement entered into after January 1, 1980, contains a provision requiring the employee to assign or offer to assign any of his or her rights in any invention to his or her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the provisions of Section 2870.
See Cal. Lab. Code § 2872.
Section 2872 places the burden of proof on the employee claiming the benefit of section 2870's own-time carve-out.
In any suit or action arising thereunder, the burden of proof shall be on the employee claiming the benefits of its provisions.
See Cal. Lab. Code § 2872.
Who owns an invention by default in California?
As a general rule, the employee inventor initially owns a patentable invention in California unless the employee assigns the rights to another party. On a touch screen, a tap shows all 2 sources in this group. The U.S. Supreme Court restated that baseline in Stanford v. Roche: others may acquire an interest, but it must trace back to the inventor . A California employer therefore depends on a written present-assignment clause — constrained by sections 2870–2872 — to take title.
In most circumstances, an inventor must expressly grant rights in an invention to the employer for the employer to obtain them ; the narrow common-law exceptions are described below.
Stanford v. Roche anchors the default. The Court held that the Bayh-Dole Act did not displace the long-standing rule that an invention belongs to its inventor, treating that premise as the baseline against which any assignment must be measured .
Because ownership starts with the inventor, an employer's title is derivative: it exists only if and to the extent the employee assigned it. Any third-party interest in the invention must trace back to that inventor-grantor .
California recognizes two narrow common-law overlays that can give an employer rights without an express assignment, but neither is a substitute for a written clause. Under the hired-to-invent doctrine, an employee engaged to make an invention who succeeds during the term of service is bound to assign the resulting patent to the employer . Separately, the shop right gives an employer only a non-exclusive right to practice, not ownership of, an invention the employee conceived and perfected during working hours with the employer's materials and appliances . Because neither doctrine transfers title to inventions outside those conditions, California employers rely instead on a written present-assignment (hereby assigns) clause — present-tense language that transfers legal title automatically on conception, rather than a future promise to assign — operating within the boundaries that sections 2870–2872 impose.
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Stanford v. Roche confirms the long-standing premise of U.S. patent law that rights in an invention belong to the inventor.
Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
Stanford v. Roche states that in most circumstances an inventor must expressly grant rights in an invention to the employer for the employer to obtain them.
In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
Stanford v. Roche holds that although others may acquire an interest in an invention, that interest as a general rule must trace back to the inventor.
Thus, although others may acquire an interest in an invention, any such interest — as a general rule — must trace back to the inventor.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
United States v. Dubilier Condenser Corp. holds that an employee hired to make an invention who succeeds during the term of service is bound to assign the resulting patent to the employer.
One employed to make an invention, who succeeds, during his term of service, in accomplishing that task, is bound to assign to his employer any patent obtained.
See United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933).
United States v. Dubilier Condenser Corp. states the shop-right rule: an employee who conceives and perfects an invention during working hours with the employer's materials and appliances owes the employer a non-exclusive right to practice it, not ownership.
Recognition of the nature of the act of invention also defines the limits of the so-called shop-right, which shortly stated, is that where a servant, during his hours of employment, working with his master's materials and appliances, conceives and perfects an invention for which he obtains a patent, he must accord his master a non-exclusive right to practice the invention.
See United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933).
Are trailing-assignment (holdover) clauses enforceable in California?
Under Whitewater West Industries v. Alleshouse, California law voids a trailing-assignment clause reaching post-employment inventions made without the former employer's trade secrets or confidential information. On a touch screen, a tap shows all 3 sources in this group. The Federal Circuit applied Business and Professions Code section 16600 and held that sections 2870–2872 did not rescue that clause.
The former employee in Whitewater left and then invented and patented new wave-pool technology without using any of his former employer's trade secrets. The court refused to enforce the trailing-assignment clause against him, holding the provision void under California law .
The legal engine is section 16600, the same restraint-of-trade statute that voids employee non-competes. A clause that forces a worker to hand over inventions made after they leave restrains them from practicing their profession and is void to that extent .
Critically, the clause's vice was not that it protected secrets — it was that it reached too far. The provision applied even though no trade-secret or confidential information had to be used to conceive or build the post-employment invention, so the clause restrained the former employee's later work rather than protecting the employer's confidential information. That reach is what makes California's limit a statutory one: an own-time carve-out plus a section 16600 ceiling on post-employment holdovers .
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Whitewater West v. Alleshouse holds that the assignment provision at issue, which the employer invoked to claim inventions its former employee conceived after his employment ended, is void under California law.
In particular, we reverse the judgment of breach of contract because we hold that the assignment provision is void under California law.
See Whitewater W. Indus., Ltd. v. Alleshouse, 981 F.3d 1045 (Fed. Cir. 2020).
Whitewater quotes Business and Professions Code section 16600, which, except as provided in that chapter, makes a contract restraining anyone from engaging in a lawful profession, trade, or business void to the extent of the restraint.
First, California Business and Professions Code § 16600 states: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”
See Whitewater W. Indus., Ltd. v. Alleshouse, 981 F.3d 1045 (Fed. Cir. 2020) (quoting Cal. Bus. & Prof. Code § 16600).
Whitewater observes that the trailing-assignment provision applied even though no trade-secret or other confidential information needed to be used to conceive the invention or reduce it to practice.
No trade-secret or other confidential information need have been used to conceive the invention or reduce it to practice for the assignment provision to apply.
See Whitewater W. Indus., Ltd. v. Alleshouse, 981 F.3d 1045 (Fed. Cir. 2020).
Whitewater describes the invalidated assignment duty as reaching a post-employment invention merely suggested by the employee's work for the former employer.
It applies when Mr. Alleshouse’s post-employment invention is merely “suggested by” his work for Wave Loch.
See Whitewater W. Indus., Ltd. v. Alleshouse, 981 F.3d 1045 (Fed. Cir. 2020).
Whitewater describes the invalidated post-employment assignment obligation as unlimited in time and geography.
The obliga- tion is unlimited in time and geography.
See Whitewater W. Indus., Ltd. v. Alleshouse, 981 F.3d 1045 (Fed. Cir. 2020).
Section 2872 requires an employer whose employment agreement, entered into after January 1, 1980, contains an invention-assignment provision to give the employee, at the time the agreement is made, a written notification that the agreement does not apply to an invention qualifying fully under section 2870.
If an employment agreement entered into after January 1, 1980, contains a provision requiring the employee to assign or offer to assign any of his or her rights in any invention to his or her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the provisions of Section 2870.
See Cal. Lab. Code § 2872.
An invention-assignment form drafted for another state can miss two California requirements. An out-of-state form that omits the section 2870 notice, without a separate written notice given when the agreement is made, leaves the employer out of compliance with section 2872 . It may also include a trailing-assignment (holdover) clause that reaches inventions conceived after employment ends, without limit of time or geography, including inventions merely suggested by the employee's former work and whether or not the employer's trade secrets were used. A clause of that reach risks being void under Whitewater. On a touch screen, a tap shows all 4 sources in this group.
What does federal law require a confidentiality and invention assignment agreement in California to say about whistleblowers and pay?
An employee confidentiality or invention assignment agreement that governs confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice when signed or updated . For employees the National Labor Relations Act covers, Section 7 also protects concerted activity over pay and working conditions that a broad confidentiality clause could restrict . The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
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An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).