Employee Invention Assignment in Indiana

Can an Indiana employer require assignment of every invention?

Because there is no statute on point, the limits come from general principles rather than a legislative carve-out. Indiana Code Title 22 (Labor and Safety) contains no employee-inventions article — the only assignment regulation anywhere in the title is the assignment-of-wages chapter, Ind. Code § 22-2-6, which governs paychecks, not patents — and Title 24 (Trade Regulation) is no different, its nearest neighbors being the Indiana Uniform Trade Secrets Act, Ind. Code § 24-2-3, and a chapter on bad-faith assertions of patent infringement. The General Assembly plainly regulates restrictive covenants when it chooses to — its physician-noncompete statute, Ind. Code § 25-22.5-5.5, was tightened again by 2025 legislation (SEA 475) barring new physician–hospital noncompetes entered into on or after July 1, 2025 — but it has never enacted a § 2870-style ceiling on what an invention-assignment promise may capture.

The controlling Indiana-specific authority is Michels v. Dyna-Kote Industries, in which the Indiana Court of Appeals, construing an employment agreement strictly against the employer, refused to treat the employer as owner of an employee's coating formulas that the contract never expressly assigned A.1.

“we hold that there was no express contract giving ownership of the formulas in Dyna-Kote”

The substantive default that Indiana contract law operates against is the federal patent premise restated in Stanford v. Roche: absent an effective assignment, rights in an invention belong to the person who conceived it A.2.

“Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor.”

The practical consequence is that an Indiana employer can, in principle, contract for assignment more broadly than a California, Illinois, or Washington employer, because no statute carves out own-time inventions from the reach of the clause. But Michels shows the other edge of the same rule — the clause captures what its express terms say, read strictly against the drafter, and no more. The court there also refused to let the trade-secrets statute substitute for an ownership term the employer never bargained for, pushing the dispute back to the contract itself A.1. There is no statutory safe harbor for the employee to invoke, and equally no statute for a sloppy drafter to fall back on.

Must an Indiana employer notify the employee?

There is nothing to give notice of. A notice requirement exists in California and Washington precisely to alert the employee to a statutory own-time carve-out that limits the assignment; Indiana has enacted no such carve-out, so there is no statutory line for a notice to mark. This is why the entry is marked not applicable rather than a bare no — the question presupposes a statutory carve-out that Indiana does not have.

Where Indiana does police the employer-employee invention relationship, it does so through the contract itself. Michels v. Dyna-Kote Industries turned entirely on what the agreement said: with no express assignment term, ownership of the employee's formulas stayed with the employee, and the court — construing the agreement strictly against the employer — declined to read in the obligation the employer wished it had drafted B.1.

“we hold that there was no express contract giving ownership of the formulas in Dyna-Kote”

For a multistate employer the takeaway is the inverse of the notice states: an Indiana employer neither has to give a § 2872-style notice nor can rely on one to cure an overbroad clause. Everything turns on the express language of the assignment term, because Indiana construes employment agreements strictly against the employer and enforces only the duties the words actually create.

Who owns an invention by default in Indiana?

Stanford v. Roche anchors the default. The Supreme Court held that even 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 is measured C.1.

“Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor.”

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 must trace back to that inventor-grantor C.3.

“Thus, although others may acquire an interest in an invention, any such interest — as a general rule — must trace back to the inventor.”

The principal exception is the employee hired to invent. Under United States v. Dubilier Condenser Corp., an employee engaged to make a particular invention who succeeds during the term of service must assign the resulting patent to the employer C.4.

“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.”

Indiana's own case law runs the same framework, and Michels v. Dyna-Kote Industries applies every piece of it in a single opinion. Where the employee developed his formulas using the employer's resources but never expressly assigned them, the most the employer could claim was a shop right — a license to use, not title C.2.

“it is true that an employer may acquire a license or shop right in the use of an employee invention when it is shown the employee expended his employer's time, tools, and materials.”

And the hired-to-invent exception is applied as written, not implied. The employee in Michels had been brought on to run the business as its president, and the court declined to treat him as hired to invent when the contract did not say so C.5.

“Furthermore, the contract does not specifically state that Michels was hired to invent.”

Because ownership therefore starts with the inventor and Indiana has no statute filling the gap, the dependable path for an employer is a written present-assignment (hereby assigns) clause that transfers legal title automatically on conception, rather than a future promise to assign that leaves the employer with a mere equitable claim — and Michels is a standing warning that an Indiana court will hold the drafter to exactly what the clause says.

Are trailing-assignment (holdover) clauses enforceable in Indiana?

Two gaps define the Indiana picture. First, there is no statute: nothing caps the duration of a post-employment trailing assignment or otherwise limits what such a clause may reach. Second, our review found no Indiana appellate decision applying the restrictive-covenant principles specifically to an invention-holdover clause, so the invention-specific application of the doctrine is a prediction rather than settled law.

What Indiana supplies is a mature restrictive-covenant doctrine. In Central Indiana Podiatry v. Krueger the Indiana Supreme Court restated its long-held rule that noncompetition covenants arising out of employment are restraints of trade and disfavored by the law D.2, and stated the operative standard plainly D.1.

“We construe these covenants strictly against the employer and will not enforce an unreasonable restriction.”

A trailing assignment clause functions as exactly such a restraint: to the extent it sweeps in inventions a former employee first conceives after leaving, it burdens that employee's ability to work and invent in the field. Measured under the Krueger line, an Indiana court would most likely ask whether the clause protects a legitimate employer interest — confidential information carried out the door, work begun during employment — and whether its time and subject-matter reach is reasonable. Indiana's blue-pencil rule sharpens the risk: a court may strike severable unreasonable terms but will not rewrite them, so an overbroad trailer is more likely to be excised entirely than trimmed to a reasonable core D.1.

The most instructive invention-specific precedent is regional and persuasive only. In Guth v. Minnesota Mining, decided in 1934 — before Erie required federal courts sitting in diversity to apply state law — the Seventh Circuit struck the limitless post-employment invention-assignment provisions of an employment contract as contrary to public policy while enforcing the reasonable, during-employment portions. It is a federal common-law holding, not Indiana law, but it remains the leading nearby treatment of exactly this clause D.3.

“Assignments in gross of future inventions are not favored.”