Can a Montana employer require assignment of every invention?
In our review of Montana's statutes we found no statute exempting an employee's own-time, own-resource inventions from an employer's invention-assignment clause. Montana is not a pure no-statute state, however. MCA § 39-2-102, an 1895 Field Civil Code provision, declares that everything an employee acquires by virtue of employment belongs to the employer, and whether that partial employer-ownership rule reaches inventions is an open question no Montana decision found in our review has decided. On a touch screen, a tap shows all 2 sources in this group.
Start with what the statute books do and do not contain. Montana has enacted no employee-invention-assignment statute: nothing in the Montana Code Annotated voids an overreaching assignment clause, carves out own-time inventions, or requires any disclosure about the clause's limits. What Title 39 does contain is a much older and much broader provision — § 39-2-102, captioned What belongs to employer — that sweeps in everything an employee acquires by virtue of the employment .
Read literally, that text plausibly reaches an invention conceived by virtue of the employment — which would make Montana employer-favoring rather than employee-protective. But the statute never mentions inventions, and the only Montana Supreme Court decision to confront it in an employee-intellectual-property dispute declined to give it that automatic effect. In Associated Management Services, Inc. v. Ruff, a fight over payroll software the employee had developed, the court said it had not previously construed how § 39-2-102 interacts with the employee-duty statutes, and it resolved ownership through the parties' contract instead — the employment relationship, the court emphasized, is primarily a contractual one .
So Montana sits between the two familiar camps. It is not a carve-out state — a Montana employer can, in principle, contract for assignment more broadly than a California or Washington employer, because no statute voids the overreach. And it is not a clean no-statute state — § 39-2-102 hovers over the analysis as a possible employer-ownership default that a future court could apply to inventions. The uncertainty comes from ambiguous statutory text plus missing case law, not from any conflict in the decided cases. The practical limits on an aggressive clause are ordinary contract law and, for post-employment reach, Montana's restraint-of-trade framework (see the holdover question below).
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MCA § 39-2-102, enacted as part of Montana's 1895 Field Civil Code, makes everything an employee acquires by virtue of employment the employer's property except compensation due — a partial employer-ownership statute that plausibly reaches inventions but never mentions them and has never been applied to one.
Everything that an employee acquires by virtue of employment, except the compensation, if any, that is due from the employee's employer, belongs to the employer, whether acquired lawfully or unlawfully or during or after the expiration of the term of the employee's employment.
See Mont. Code Ann. § 39-2-102.
Associated Mgmt. Servs. v. Ruff shows the Montana Supreme Court had not previously construed how § 39-2-102 interacts with the employee-duty statutes and treats the employment relationship as primarily contractual — so no Montana holding makes the statute an automatic invention-assignment rule.
Though we have not heretofore construed the interplay between §§ 39-2-102, -403, and -409, MCA, the employment relationship is primarily a contractual relationship. Section 39-2-101, MCA.
See Associated Mgmt. Servs., Inc. v. Ruff, 2018 MT 182, 392 Mont. 139, 424 P.3d 571.
Must a Montana employer notify the employee?
In our review of Montana's statutes we found no statute requiring an employer to give an employee notice of an own-time, own-resource invention carve-out. Because Montana 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). The one Montana statute that touches employee acquisitions, MCA § 39-2-102, vests ownership language in the employer without conditioning anything on notice to, or disclosure by, anyone .
There is nothing to give notice of. Notice statutes exist to alert the employee to a statutory own-time carve-out that limits the assignment clause; Montana has enacted no such carve-out, so there is no statutory line for a notice to mark. That is why this entry is marked not applicable rather than a bare no — the question presupposes a statutory regime Montana does not have.
Nor does the employer-acquisition statute impose any procedural formality of its own. Its text operates unconditionally, without reference to any warning, acknowledgment, or disclosure .
For a multistate employer the takeaway is symmetrical: a Montana employer neither has to give a § 2872-style notice nor can rely on one to cure an overbroad clause. Whether an assignment binds turns on the contract language, the unresolved statutory default discussed elsewhere on this page, and the general limits on restraints — not on any notice formality.
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MCA § 39-2-102 operates unconditionally by its terms, without requiring any notice to or disclosure by the employee — and Montana has no invention-assignment statute, so no statutory notice regime of any kind exists.
Everything that an employee acquires by virtue of employment, except the compensation, if any, that is due from the employee's employer, belongs to the employer, whether acquired lawfully or unlawfully or during or after the expiration of the term of the employee's employment.
See Mont. Code Ann. § 39-2-102.
Who owns an invention by default in Montana?
In our review we found no Montana decision deciding whether MCA § 39-2-102 gives an employer ownership of an employee's patentable invention absent a written assignment. Montana is caught between two defaults that point in opposite directions. The federal baseline is that rights in an invention belong to the inventor unless assigned, subject to the narrow hired-to-invent exception and the employer's shop right. But MCA § 39-2-102's text — everything acquired by virtue of employment belongs to the employer — points the other way, and no Montana decision found in our review has resolved the tension for an invention. On a touch screen, a tap shows all 3 sources in this group.
The federal starting point is settled. Stanford v. Roche restates the premise that has governed since the first Patent Act: an invention belongs to the person who conceived it .
Against that baseline, the traditional common-law doctrines allocate limited rights to the employer. Under United States v. Dubilier Condenser Corp., an employee hired to invent must assign the resulting patent , and an employee who used the employer's time, materials, and appliances owes the employer a shop right — a non-exclusive license, not ownership .
Note the framing here: our review found no Montana Supreme Court decision adopting or applying the shop-right or hired-to-invent doctrines. A Montana court confronting an ownership fight without a written assignment would be writing on a clean slate, with Dubilier the canonical statement it would most likely consult — a prediction, not Montana authority.
What makes Montana genuinely uncertain rather than merely quiet is § 39-2-102. Read literally, the statute would hand the employer everything the employee acquires by virtue of the employment — which, applied to an invention, would displace the inventor-first baseline entirely .
The Montana Supreme Court treats that text as live law — in Associated Management Services, Inc. v. Ruff it recited the rule while analyzing an employer's claim to employee-developed software .
Yet Ruff did not treat the statute as automatic employer ownership. The court resolved the dispute through the parties' contract, holding that the employment relationship is primarily contractual and that the agreement's scope defined what the employer owned — the employer did not automatically acquire work product created outside contract-defined duties .
Open statutory question: whether § 39-2-102 reaches patentable inventions at all. No Montana case applies it to a patent, Ruff signals contract primacy and scope-of-duties limits, and under federal law any employer interest in a patent must in any event trace back to the inventor through some transfer — but a Montana court could still treat the statute as an ownership hook for an in-scope invention. This page therefore reports the default as unclear rather than picking a side the authorities have not picked.
The drafting consequence is the same one careful employers reach everywhere, only more urgent here: because the default is contested, a written present-assignment clause (hereby assigns) that transfers title automatically on conception is the dependable path, and relying on the statutory default is a litigation position, not a plan.
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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 — the federal baseline that competes with MCA § 39-2-102's employer-favoring text in Montana.
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).
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 — the hired-to-invent exception a Montana court would most likely consult, since our review found no Montana decision adopting it.
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 on the employer's time with the employer's materials owes the employer a non-exclusive right to practice it, not ownership; our review found no Montana decision applying the doctrine, so it operates here only as the federal baseline a Montana court would most likely consult.
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).
MCA § 39-2-102's text vests everything an employee acquires by virtue of employment in the employer — an employer-favoring state-law default that, if applied to inventions, would displace the federal inventor-first baseline; no Montana court has decided whether it applies.
Everything that an employee acquires by virtue of employment, except the compensation, if any, that is due from the employee's employer, belongs to the employer, whether acquired lawfully or unlawfully or during or after the expiration of the term of the employee's employment.
See Mont. Code Ann. § 39-2-102.
Associated Mgmt. Servs. v. Ruff recites § 39-2-102's employer-acquisition rule as live Montana law in an employee-intellectual-property dispute, showing the statute cannot be dismissed when predicting Montana's default ownership rule.
Moreover, except for compensation due, "[e]verything that an employee acquires by virtue of employment
See Associated Mgmt. Servs., Inc. v. Ruff, 2018 MT 182, 392 Mont. 139, 424 P.3d 571.
Associated Mgmt. Servs. v. Ruff resolves an employee-created-IP ownership dispute on contract primacy — the employment relationship is primarily contractual — rather than treating § 39-2-102 as automatic employer ownership, leaving the statute's reach over inventions undecided.
Though we have not heretofore construed the interplay between §§ 39-2-102, -403, and -409, MCA, the employment relationship is primarily a contractual relationship. Section 39-2-101, MCA.
See Associated Mgmt. Servs., Inc. v. Ruff, 2018 MT 182, 392 Mont. 139, 424 P.3d 571.
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 — so whatever state-law default MCA § 39-2-102 supplies, an employer's federal patent title still runs through a transfer from the employee-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).
Are trailing-assignment (holdover) clauses enforceable in Montana?
A Montana court would most likely enforce a trailing invention-assignment clause that restrains employment only if it is restricted in time or place, supported by good consideration, and reasonable, affording only fair protection to the employer without interfering with the interests of the public . That answer is by analogy, not by holding: our review found no Montana decision addressing a post-employment invention-assignment tail. What Montana does have is a statutory restraint-of-trade framework: MCA § 28-2-703 voids a contract restraining anyone from exercising a lawful profession, trade, or business except in two narrow statutory situations, and the Montana Supreme Court enforces employment covenants only when reasonable and supported by a legitimate business interest. A court asked to enforce an aggressive holdover clause would most likely test it under that framework. On a touch screen, a tap shows all 3 sources in this group.
The statutory backdrop is categorical. Montana, like a handful of states that inherited the same Field Code text, starts from a void-unless-excepted rule for restraints of trade .
The two statutory exceptions cover the sale of a business's goodwill and partnership dissolution — neither covers an employment invention clause. Employment covenants survive in Montana only through the reasonableness gloss the Montana Supreme Court has applied to the statute. In Access Organics, Inc. v. Hernandez, the court restated that a covenant not to compete is upheld as reasonable only if it meets three requirements .
The same decision underscores how those covenants are read: Montana public policy strongly disfavors restraints, so covenants are construed strictly .
Wrigg v. Junkermier, Clark, Campanella, Stevens, P.C. adds a threshold requirement with real bite for trailing clauses: the covenant must serve a legitimate business interest, and the employer normally forfeits that interest by ending the relationship itself .
Three hedges keep this honest. First, extending the covenant framework to an invention holdover is a prediction: no Montana court has faced one, and a court could instead treat a narrow trailing clause as pure ownership allocation rather than a restraint. Second, the trigger matters — a clause that functions as a practical restraint on the former employee's ability to work in the field is the kind most likely to draw § 28-2-703 scrutiny; a short tail tied to inventions conceived from the employer's confidential information looks less like a restraint. Third, our review found no Montana authority on reforming an overbroad clause, and the strict-construction approach gives no assurance a court would trim an overreaching tail rather than refuse to enforce it — § 28-2-703's own text voids an offending contract to that extent. On a touch screen, a tap shows all 2 sources in this group.
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MCA § 28-2-703 voids, to that extent, any contract restraining anyone from exercising a lawful profession, trade, or business except in the two narrow statutory situations of §§ 28-2-704 and 28-2-705 — the restraint-of-trade framework under which a Montana court would most likely test a post-employment trailing-assignment clause.
Any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided for by 28-2-704 or 28-2-705, is to that extent void.
See Mont. Code Ann. § 28-2-703.
Access Organics, Inc. v. Hernandez restates Montana's three-part reasonableness test for covenants restraining employment — restricted in time or place, supported by good consideration, and no broader than fair protection of the covenantee without interfering with the public interest — the test a court would most likely adapt to an invention holdover clause.
(1) [I]t must be partial or restricted in its operation in respect either to time or place; (2) it must be on some good consideration; and (3) it must be reasonable, that is, it should afford only a fair protection to the interests of the party in whose favor it is made, and must not be so large in its operation as to interfere with the interests of the public.
See Access Organics, Inc. v. Hernandez, 2008 MT 4, 341 Mont. 73, 175 P.3d 899.
Access Organics, Inc. v. Hernandez holds that because Montana public policy strongly disfavors agreements in restraint of trade, covenants are construed strictly — a canon that cuts against saving an overbroad trailing-assignment clause by narrowing it.
Since Montana’s public policy strongly disfavors agreements in restraint of trade, as discussed above, we construe non-compete agreements strictly
See Access Organics, Inc. v. Hernandez, 2008 MT 4, 341 Mont. 73, 175 P.3d 899.
Wrigg v. Junkermier holds that an employer normally lacks a legitimate business interest in a covenant when it chooses to end the employment relationship — a threshold requirement that would weigh heavily against enforcing a trailing-assignment clause after an employer-initiated termination.
We agree that an employer normally lacks a legitimate business interest in a covenant when it chooses to end the employment relationship.
See Wrigg v. Junkermier, Clark, Campanella, Stevens, P.C., 2011 MT 290, 362 Mont. 496, 265 P.3d 646.
Associated Mgmt. Servs. v. Ruff resolves an employee-created-IP ownership dispute on contract primacy — the employment relationship is primarily contractual — rather than treating § 39-2-102 as automatic employer ownership, leaving the statute's reach over inventions undecided.
Though we have not heretofore construed the interplay between §§ 39-2-102, -403, and -409, MCA, the employment relationship is primarily a contractual relationship. Section 39-2-101, MCA.
See Associated Mgmt. Servs., Inc. v. Ruff, 2018 MT 182, 392 Mont. 139, 424 P.3d 571.
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 — so whatever state-law default MCA § 39-2-102 supplies, an employer's federal patent title still runs through a transfer from the employee-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).
Do not treat MCA § 39-2-102 as a self-sufficient assignment. Whether the statute reaches inventions is undecided, and the Montana Supreme Court has resolved employee-created-IP ownership through the contract rather than the statute . Federal patent title must in any event trace back to the inventor, so use a written present-assignment (hereby assigns) clause that transfers title automatically on conception instead of relying on the contested statutory default . And keep any trailing or holdover tail narrow, short, and tied to the employer's protectable information, because Montana voids restraints of trade outside two narrow exceptions, construes covenants strictly, and normally denies a legitimate business interest to an employer who ends the relationship itself. On a touch screen, a tap shows all 3 sources in this group.
What does federal law require a confidentiality and invention assignment agreement in Montana 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.
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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).