# Employee Invention Assignment in Michigan[^about] Michigan has no employee-invention-assignment statute, so an assignment clause is bounded only by ordinary contract law, the common-law default rules, and the federal patent and copyright overlay — not a California-style own-time carve-out or notice requirement. Absent a written assignment the inventor-employee owns unless hired to invent, with the employer holding at most a shop right, and a post-employment holdover clause is tested for reasonableness — a federal court applying Michigan law held an indefinite trailing-assignment clause invalid as an unreasonable restraint of trade. ## Can a Michigan employer require assignment of every invention? {#statutory-carve-out} **Short answer.** 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 [^banks-general-rule][^stanford-baseline]. 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 [^banks-general-rule]. "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."[^banks-general-rule] 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 [^stanford-baseline]. "Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor."[^stanford-baseline] 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. ## Must a Michigan employer notify the employee? {#employee-notice} **Short answer.** 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 [^ac-engineering-implied-agreement]. 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 [^ac-engineering-implied-agreement]. "It is sufficient that such an agreement or understanding can fairly be inferred from the facts pleaded."[^ac-engineering-implied-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. ## Who owns an invention by default in Michigan? {#default-ownership} **Short answer.** 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 [^ac-engineering-shop-right][^gear-grinding-hired-to-invent]. *A & C Engineering Co. v. Atherholt* is the cleanest Michigan Supreme Court statement of the default [^ac-engineering-shop-right]. "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."[^ac-engineering-shop-right] 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 [^detroit-testing-employee-owns]. "He was not hired to exercise his inventive genius in the discovery of patentable ideas for plaintiff."[^detroit-testing-employee-owns] 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 [^gear-grinding-hired-to-invent]. "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."[^gear-grinding-hired-to-invent] 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.* [^dubilier-hired-to-invent]. "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."[^dubilier-hired-to-invent] *Gear Grinding* also carries the Michigan Supreme Court's own drafting lesson — the employer lost precisely because nothing in writing gave it the invention [^gear-grinding-reduce-to-writing]. "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."[^gear-grinding-reduce-to-writing] 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 [^omni-present-assignment]. 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. ## Are trailing-assignment (holdover) clauses enforceable in Michigan? {#holdover-clause-limit} **Short answer.** 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 [^fsw-not-reasonable-to-confiscate][^st-clair-reasonableness]. 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 [^fsw-not-reasonable-to-confiscate]. "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."[^fsw-not-reasonable-to-confiscate] The court stressed the clause's open-ended duration [^fsw-indefinite-duration] and described its breadth bluntly [^fsw-overbroad]. "The agreements in question are for an indefinite period of time."[^fsw-indefinite-duration] "It is hard to imagine a more restrictive or overbroad agreement."[^fsw-overbroad] 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 [^mcl-445-774a-reasonableness]. "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."[^mcl-445-774a-reasonableness] The Michigan Court of Appeals has stated the operative reasonableness test under that section [^st-clair-reasonableness]. "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."[^st-clair-reasonableness] 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 [^mcl-445-772-restraint], 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. > [!NOTE] > **Practice note.** > > 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 [^fsw-not-reasonable-to-confiscate]. 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 [^st-clair-reasonableness]. 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 [^omni-present-assignment-practice]. [^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-07-02. License: CC BY 4.0. Steven Obiajulu, J.D. is admitted in New York, not Michigan. This article synthesizes Michigan primary law and is not legal advice from a Michigan-admitted attorney. This article is for informational purposes only and does not create an attorney-client relationship. CC BY 4.0. Cite as Steven Obiajulu, *Employee Invention Assignment in Michigan*, OpenAgreements (last updated July 2, 2026), https://openagreements.org/practice-guides/invention-assignment/us/michigan. [^banks-general-rule]: **Banks v. Unisys Corp.** — "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." *Banks v. Unisys Corp., 228 F.3d 1357 (Fed. Cir. 2000).* [^stanford-baseline]: **Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Systems** — "Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor." *Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).* [^ac-engineering-implied-agreement]: **A & C Engineering Co. v. Atherholt** — "It is sufficient that such an agreement or understanding can fairly be inferred from the facts pleaded." *A & C Engineering Co. v. Atherholt, 355 Mich. 677, 95 N.W.2d 871 (1959).* [^ac-engineering-shop-right]: **A & C Engineering Co. v. Atherholt** — "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." *A & C Engineering Co. v. Atherholt, 355 Mich. 677, 95 N.W.2d 871 (1959).* [^gear-grinding-hired-to-invent]: **Gear Grinding Machine Co. v. Stuber** — "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." *Gear Grinding Machine Co. v. Stuber, 282 Mich. 455, 276 N.W. 514 (1937).* [^detroit-testing-employee-owns]: **Detroit Testing Laboratory v. Robison** — "He was not hired to exercise his inventive genius in the discovery of patentable ideas for plaintiff." *Detroit Testing Laboratory v. Robison, 221 Mich. 442, 191 N.W. 218 (1922).* [^dubilier-hired-to-invent]: **United States v. Dubilier Condenser Corp.** — "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." *United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933).* [^gear-grinding-reduce-to-writing]: **Gear Grinding Machine Co. v. Stuber** — "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." *Gear Grinding Machine Co. v. Stuber, 282 Mich. 455, 276 N.W. 514 (1937).* [^omni-present-assignment]: **Omni MedSci, Inc. v. Apple Inc.** — "reflects a future agreement to assign" *Omni MedSci, Inc. v. Apple Inc., 7 F.4th 1148 (Fed. Cir. 2021).* [^fsw-not-reasonable-to-confiscate]: **Federal Screw Works v. Interface Systems, Inc.** — "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." *Federal Screw Works v. Interface Systems, Inc., 569 F. Supp. 1562 (E.D. Mich. 1983).* [^st-clair-reasonableness]: **St. Clair Medical, P.C. v. Borgiel** — "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." *St. Clair Medical, P.C. v. Borgiel, 270 Mich. App. 260, 715 N.W.2d 914 (2006).* [^fsw-indefinite-duration]: **Federal Screw Works v. Interface Systems, Inc.** — "The agreements in question are for an indefinite period of time." *Federal Screw Works v. Interface Systems, Inc., 569 F. Supp. 1562 (E.D. Mich. 1983).* [^fsw-overbroad]: **Federal Screw Works v. Interface Systems, Inc.** — "It is hard to imagine a more restrictive or overbroad agreement." *Federal Screw Works v. Interface Systems, Inc., 569 F. Supp. 1562 (E.D. Mich. 1983).* [^mcl-445-774a-reasonableness]: **Mich. Comp. Laws § 445.774a** — "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." *Mich. Comp. Laws § 445.774a(1).* [^mcl-445-772-restraint]: **Mich. Comp. Laws § 445.772** — "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." *Mich. Comp. Laws § 445.772.* [^omni-present-assignment-practice]: **Omni MedSci, Inc. v. Apple Inc.** — "reflects a future agreement to assign" *Omni MedSci, Inc. v. Apple Inc., 7 F.4th 1148 (Fed. Cir. 2021).*