Can a Michigan employer require assignment of every invention?
There is no statutory ceiling. Unlike California or New York, Michigan has no employee-invention-assignment statute — nothing that voids an assignment of a true own-time, own-resource invention and no statutory limit on what an assignment clause may capture — so the clause's reach is bounded only by ordinary contract law, the common-law inventor-owns default, and, where the clause operates as a post-employment restraint, Michigan's reasonableness limits on restraints of trade. The baseline the contract is written against is that the individual inventor owns, even for inventions conceived on the job. On a touch screen, a tap shows all 2 sources in this group.
Because there is no statute on point, the limits come from general principles rather than a legislative carve-out. The Michigan Compiled Laws contain no analogue of California Labor Code § 2870 or New York Labor Law § 203-f. The only invention statute in the code is MCL 17.401, which authorizes the state administrative board to enter contracts relating to state-owned inventions affecting the public health — a public-administration provision, not a regulation of private employment agreements. Michigan's Uniform Trade Secrets Act (MCL 445.1901 et seq.) supplies a trade-secret backdrop but does not regulate what an invention-assignment clause may reach.
The default an assignment clause is drafted against is stated in Banks v. Unisys Corp., a Federal Circuit decision arising out of Michigan employment .
That is the same premise the Supreme Court restated in Stanford v. Roche: absent an effective assignment, rights in an invention belong to the person who conceived it .
The practical consequence is that a Michigan employer can, in principle, contract for assignment more broadly than a California or New York employer, because no statute carves out own-time inventions from the reach of the clause. But that breadth is not unlimited: an assignment clause is still an ordinary contract term, and where it functions as a restraint on the employee after termination it faces Michigan's reasonableness limits on restraints of trade, discussed in the trailing-clause question below. There is simply no statutory own-time safe harbor for the employee to invoke and no statutory ceiling for the drafter to code around.
Sources for this answer
Banks v. Unisys Corp., a Federal Circuit decision arising out of Michigan employment, states the modern general rule that an individual owns the patent rights to the subject matter of which he is an inventor even though he conceived it or reduced it to practice in the course of his employment — the default a Michigan assignment clause is drafted against.
The general rule is that an individual owns the patent rights to the subject matter of which he is an inventor, even though he conceived it or reduced it to practice in the course of his employment.
See Banks v. Unisys Corp., 228 F.3d 1357 (Fed. Cir. 2000).
Stanford v. Roche confirms the long-standing premise of U.S. patent law that rights in an invention belong to the inventor, the baseline against which any assignment clause is measured.
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).
Must a Michigan employer notify the employee?
Not applicable. Because Michigan has no invention-assignment statute, there is no statutory carve-out to notify the employee about and no notice requirement of the kind California imposes under Labor Code § 2872 or Washington imposes under RCW 49.44.140(3). Assignment and disclosure duties in Michigan arise from the parties' agreement, and the Michigan Supreme Court does not even require that the agreement be express — an understanding fairly inferred from the facts can support a decree compelling assignment .
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; Michigan 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 Michigan does not have.
Where Michigan does impose assignment duties, they come from the contract — and the contract can even be implied. In A & C Engineering Co. v. Atherholt, the Michigan Supreme Court sustained an employer's claim to compel assignment without a signed invention-assignment form, because the pleaded facts supported an inferred agreement .
For a multistate employer the takeaway is the inverse of the notice states: a Michigan employer neither has to give a § 2872-style notice nor can rely on one to cure an overbroad clause. The enforceability of the assignment turns entirely on the agreement — express or fairly inferred — and on the general limits on restraints, not on any statutory notice or disclosure formality.
Sources for this answer
A & C Engineering Co. v. Atherholt holds that an agreement to assign an invention need not be express — an agreement or understanding fairly inferred from the facts is sufficient — showing that Michigan assignment and disclosure duties arise from the parties' agreement rather than from any notice-requiring statute.
It is sufficient that such an agreement or understanding can fairly be inferred from the facts pleaded.
See A & C Engineering Co. v. Atherholt, 355 Mich. 677, 95 N.W.2d 871 (1959).
Who owns an invention by default in Michigan?
The inventor-employee, unless hired to invent. The Michigan Supreme Court's stated default is that, absent an express agreement to the contrary, inventions belong to the inventor-employee rather than the employer — even inventions conceived, developed, and patented on the employer's time and at its expense — with the employer entitled only to a shop right. The exception is the employee hired to invent, whose resulting invention the employer may claim. On a touch screen, a tap shows all 2 sources in this group.
A & C Engineering Co. v. Atherholt is the cleanest Michigan Supreme Court statement of the default .
The root of that rule is Detroit Testing Laboratory v. Robison, in which a chemist kept his patent even though he developed the invention on his employer's time and in its laboratory, because inventing was not what he was hired to do .
The hired-to-invent exception is recognized in Gear Grinding Machine Co. v. Stuber. The employer lost — the draftsman there was not hired to invent, so he kept his patent — but the court made clear that the result would flip if the employee had been engaged to devise the very improvement at issue .
In reaching that result the Michigan court quoted with approval the federal formulation of the hired-to-invent rule from United States v. Dubilier Condenser Corp. .
Gear Grinding also carries the Michigan Supreme Court's own drafting lesson — the employer lost precisely because nothing in writing gave it the invention .
Getting it in writing is necessary but not always sufficient: the words must actually transfer title. In Omni MedSci, Inc. v. Apple Inc., the Federal Circuit construed a University of Michigan bylaw stating that certain patents shall be the property of the university and held that such language is, at most, a promise about the future rather than a present transfer — it did not effect a present automatic assignment of title, so the inventor's later assignment to his own company stood . The dependable path for a Michigan employer is therefore 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 contract claim.
Sources for this answer
A & C Engineering Co. v. Atherholt states the Michigan default that, absent an express agreement to the contrary, an invention belongs to the inventor-employee rather than the employer, with the employer entitled only to a shop right, even for inventions conceived, developed, and patented on the employer's time and at its expense.
There is authority in Michigan that in the absence of an express agreement to the contrary inventions belong to the inventor-employee rather than his employer, and that the employer is entitled only to a “shop-right” therein, notwithstanding that the invention was conceived, developed and patented on the employer’s time and at its expense.
See A & C Engineering Co. v. Atherholt, 355 Mich. 677, 95 N.W.2d 871 (1959).
Detroit Testing Laboratory v. Robison, the root of Michigan's employee-ownership default, holds that an employee who was not hired to invent keeps his patent even though the invention was developed on the employer's time and with its facilities.
He was not hired to exercise his inventive genius in the discovery of patentable ideas for plaintiff.
See Detroit Testing Laboratory v. Robison, 221 Mich. 442, 191 N.W. 218 (1922).
Gear Grinding Machine Co. v. Stuber recognizes Michigan's hired-to-invent exception — had the employee been employed to devise the improvement at issue, the employer would be entitled to an assignment of the patent — while holding that the draftsman there was not hired to invent and so kept his patent.
We agree with plaintiff that if defendant had been employed to devise a new universal joint or make improvements in the Rzeppa joint, plaintiff would be entitled to an assignment of the patent.
See Gear Grinding Machine Co. v. Stuber, 282 Mich. 455, 276 N.W. 514 (1937).
United States v. Dubilier Condenser Corp. states the federal formulation of the hired-to-invent rule — an employee employed to make an invention who succeeds during the term of service must assign the resulting patent — a formulation the Michigan Supreme Court quoted with approval in Gear Grinding.
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).
Gear Grinding Machine Co. v. Stuber admonishes that where the parties contemplate that inventions made by an employee during the course of his work will belong to the employer, the contract relations should be reduced to writing — the Michigan Supreme Court's own drafting lesson from a case the employer lost for want of such an agreement.
The case illustrates the advisability of reducing contract relations to writing where the parties contemplate that any invention made by an employee during the course of his work shall belong to the employer.
See Gear Grinding Machine Co. v. Stuber, 282 Mich. 455, 276 N.W. 514 (1937).
Omni MedSci, Inc. v. Apple Inc., construing a University of Michigan bylaw providing that certain patents shall be the property of the university, holds that such language at most reflects a future agreement to assign rather than a present assignment — so title did not pass automatically, and drafters who want automatic transfer need present-assignment wording.
reflects a future agreement to assign
See Omni MedSci, Inc. v. Apple Inc., 7 F.4th 1148 (Fed. Cir. 2021).
Are trailing-assignment (holdover) clauses enforceable in Michigan?
Only if reasonable. Michigan has no statute specifically addressing post-employment trailing-assignment clauses and no fixed temporal cap, and no Michigan state appellate decision found in our review is squarely on point. The decision that is on point — a federal district court applying Michigan law — held an indefinite trailing-assignment clause invalid as an unreasonable restraint of trade, and every framework a modern Michigan court might bring to such a clause, statutory or common-law, tests it for reasonableness. On a touch screen, a tap shows all 2 sources in this group.
The on-point authority is Federal Screw Works v. Interface Systems, Inc., decided by the U.S. District Court for the Eastern District of Michigan in 1983. The clause there obligated employees to assign inventions conceived or developed during employment or afterward that related to the company's field of activity or its contemplated field of activity, with no time limit. The court held the agreements invalid, drawing a sharp line between protecting the employer's information and confiscating the employee's future inventions .
The court stressed the clause's open-ended duration and described its breadth bluntly .
“The agreements in question are for an indefinite period of time.”
“It is hard to imagine a more restrictive or overbroad agreement.”
Two features of Federal Screw Works keep the Michigan picture thinner than the holding suggests, and honesty requires stating both. First, it is a federal district court decision — persuasive when applying Michigan law, but not binding on Michigan state courts, and our review found no Michigan state appellate decision squarely deciding a trailing invention-assignment clause. Second, the decision rested on two grounds, only one of which survives: the court applied Michigan's 1905 blanket ban on post-employment restraints (then MCL 445.761), a statute the Michigan Antitrust Reform Act repealed when it took effect in 1985, so that ground is historical only; but the court also held, as an independent alternative ground, that the clause was invalid as an unreasonable restraint of trade under Michigan common law — and that reasonableness holding carries forward.
Since 1985, the Michigan Antitrust Reform Act supplies the statutory backdrop for post-employment restraints. MCL 445.774a — added to the act in 1987 and applicable to covenants entered into after March 29, 1985 — permits reasonable post-termination covenants and lets a court trim an unreasonable one .
The Michigan Court of Appeals has stated the operative reasonableness test under that section .
Which framework actually governs a trailing assignment clause is an open question. Section 445.774a by its terms reaches covenants that expressly prohibit an employee from engaging in employment or a line of business, and a trailing assignment clause does not expressly prohibit anyone from working — so a Michigan court might route such a clause through § 445.774a by treating substance over form, through the act's general restraint-of-trade section , or through the surviving common-law reasonableness doctrine that Federal Screw Works applied. Federal Screw Works itself predates § 445.774a and never construed it. But the choice may matter less than it appears: every candidate framework tests the clause for reasonableness, which is why the practical answer is reasonableness-only rather than a fixed statutory limit.
Sources for this answer
Federal Screw Works v. Interface Systems, applying Michigan law, held an indefinite trailing invention-assignment clause invalid as an unreasonable restraint of trade, reasoning that restricting ex-employees from using information gathered at the company would be reasonable but confiscating all new inventions in which the company might have an interest is not.
It would be reasonable to restrict these ex-employees from using information gathered at Interface. It is not reasonable to confiscate all new inventions made by the employees for which Interface might have an interest.
See Federal Screw Works v. Interface Systems, Inc., 569 F. Supp. 1562 (E.D. Mich. 1983).
Federal Screw Works v. Interface Systems emphasized that the trailing-assignment agreements it held invalid ran for an indefinite period — open-ended duration counts heavily against a holdover clause under Michigan reasonableness analysis.
The agreements in question are for an indefinite period of time.
See Federal Screw Works v. Interface Systems, Inc., 569 F. Supp. 1562 (E.D. Mich. 1983).
Federal Screw Works v. Interface Systems characterized the indefinite, contemplated-field trailing-assignment clause before it as an extraordinarily restrictive and overbroad agreement.
It is hard to imagine a more restrictive or overbroad agreement.
See Federal Screw Works v. Interface Systems, Inc., 569 F. Supp. 1562 (E.D. Mich. 1983).
St. Clair Medical, P.C. v. Borgiel states the operative reasonableness test under MCL 445.774a — a restrictive covenant must protect against the employee gaining some unfair advantage in competition with the employer but may not prohibit the employee from using general knowledge or skill — the framework a Michigan court would bring to a post-employment restraint.
To be reasonable in relation to an employer's competitive business interest, a restrictive covenant must protect against the employee's gaining some unfair advantage in competition with the employer, but not prohibit the employee from using general knowledge or skill.
See St. Clair Medical, P.C. v. Borgiel, 270 Mich. App. 260, 715 N.W.2d 914 (2006).
MCL 445.774a(1) supplies Michigan's statutory reasonableness framework for post-employment restrictive covenants — an employer may obtain a covenant protecting reasonable competitive business interests if it is reasonable as to duration, geographical area, and type of employment, and a court may limit an unreasonable covenant to render it reasonable — the modern statutory backdrop a holdover clause would face if treated as a restrictive covenant.
An employer may obtain from an employee an agreement or covenant which protects an employer's reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business. To the extent any such agreement or covenant is found to be unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement as limited.
See Mich. Comp. Laws § 445.774a(1).
MCL 445.772, the Michigan Antitrust Reform Act's general restraint provision, makes contracts in restraint of trade in a relevant market unlawful — the candidate statutory hook for a trailing assignment clause if § 445.774a's noncompete-specific text is held not to reach it.
A contract, combination, or conspiracy between 2 or more persons in restraint of, or to monopolize, trade or commerce in a relevant market is unlawful.
See Mich. Comp. Laws § 445.772.
Omni MedSci, Inc. v. Apple Inc., construing a University of Michigan bylaw providing that certain patents shall be the property of the university, holds that such language at most reflects a future agreement to assign rather than a present assignment — so title did not pass automatically, and drafters who want automatic transfer need present-assignment wording.
reflects a future agreement to assign
See Omni MedSci, Inc. v. Apple Inc., 7 F.4th 1148 (Fed. Cir. 2021).
Do not treat the Michigan trailing-clause question as settled. The only decision found in our review that squarely voids a trailing invention-assignment clause under Michigan law is a 1983 federal district court ruling whose statutory ground rested on a since-repealed 1905 restraint ban — only its alternative common-law holding, that an indefinite clause confiscating all inventions of interest to the employer is an unreasonable restraint of trade, carries forward . Draft any holdover clause as if a reasonableness test applies: give it a defined, short duration, tie it to inventions derived from the employer's confidential information or the employee's actual work rather than to everything in the employer's contemplated field, and stay on the protectable-interest side of the line between preventing an unfair competitive advantage and stopping the former employee from using general knowledge or skill . And for the assignment itself, use present-assignment (hereby assigns) wording — a promise that inventions shall be the property of the employer is at most a future agreement to assign and does not pass title automatically .
What does federal law require a confidentiality and invention assignment agreement in Michigan to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can 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.
Sources for this answer
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).