Can a North Dakota employer require assignment of every invention?
There is no employee carve-out — the statute runs the other way. North Dakota has no §2870-style law protecting an employee's own-time, own-resource inventions. Instead, N.D.C.C. § 34-02-11 provides that everything an employee acquires by virtue of the employment belongs to the employer, except compensation due the employee — an employer-acquisition default, not a limit on assignment clauses. The Eighth Circuit applied that statute to patent ownership in Keller v. Clark Equipment Co., and the North Dakota Supreme Court adopted the Keller construction in First American Bank West v. Berdahl. On a touch screen, a tap shows all 3 sources in this group.
The statutory text is broad and runs in the employer's favor .
No provision of the North Dakota Century Code carves out an employee's own-time inventions from that default or from the reach of an assignment clause: chapter 34-02, the chapter governing the obligations of employers and employees, contains no invention carve-out, and the state has enacted no analogue to California Labor Code §2870. So the drafting question in North Dakota is not how far an assignment clause may reach during employment — the statute already points in-scope work product at the employer — but whether post-employment reach survives the state's restraint-of-trade statute, addressed in the trailing-clause question below.
The statute has been applied in a real patent fight. In Keller v. Clark Equipment Co., the Eighth Circuit, applying North Dakota law to the skid-steer loader patents, concluded that the employer would have owned the disputed patent under the statute had the parties not agreed otherwise .
“Melroe would have been the exclusive owner of the 117 patent under N.D.Cent.Code § 34-02-11.”
Two limits keep this from being a blank check. First, Keller construed the statute in a hired-to-invent posture — the inventor there had been hired for his inventive abilities — so the case does not establish that the statute captures an invention by an employee who was not hired to invent (see the default-ownership question below) . Second, the statute itself yields to an express or implied agreement to the contrary, which is how the inventors in Keller retained an ownership interest in their patent , and which the North Dakota Supreme Court reaffirmed when it adopted the Keller construction .
One adjacent statute deserves a flag. N.D.C.C. § 47-07-04 gives the author of any product of the mind — expressly including an invention — exclusive ownership for as long as the product remains in the author's possession . No North Dakota decision found in our review construes that author-ownership provision against § 34-02-11's employer-acquisition rule, so the tension between the two Field Code companions is real but unresolved; the cases to date have run the analysis through § 34-02-11.
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N.D.C.C. § 34-02-11 makes everything an employee acquires by virtue of the employment, other than compensation due the employee, belong to the employer — an employer-acquisition default with no own-time employee carve-out.
Everything which an employee acquires by virtue of the employee's employment, whether acquired lawfully or unlawfully or during or after the expiration of the term of the employee's employment, except any compensation which is due the employee from the employee's employer, belongs to the employer.
See N.D. Cent. Code § 34-02-11.
Keller v. Clark Equipment Co., applying North Dakota law in a hired-to-invent posture, holds that absent a contrary agreement the employer would have been the exclusive owner of the employee's patent under N.D.C.C. § 34-02-11 — the statute operates on patent ownership.
Melroe would have been the exclusive owner of the 117 patent under N.D.Cent.Code § 34-02-11.
See Keller v. Clark Equipment Co., 715 F.2d 1280 (8th Cir. 1983), cert. denied, 464 U.S. 1044 (1984).
First American Bank West v. Berdahl adopts the Keller construction of N.D.C.C. § 34-02-11 as North Dakota law — absent an agreement to the contrary, what the employee acquires by virtue of the employment belongs to the employer.
Following the Keller interpretation of N.D.C.C. § 34-02-11, we conclude, absent an agreement to the contrary, the commissions earned by Berdahl belonged to the Bank.
See First American Bank West v. Berdahl, 556 N.W.2d 63 (N.D. 1996).
Keller v. Clark Equipment Co. affirms the finding that the employer agreed to recognize that the inventors retained an ownership interest in the patent, so an agreement to the contrary displaced the employer's ownership under N.D.C.C. § 34-02-11.
The district court, however, found that Melroe indeed agreed to recognize that the Kellers retained an ownership interest in the 117 patent and never claimed sole ownership.
See Keller v. Clark Equipment Co., 715 F.2d 1280 (8th Cir. 1983), cert. denied, 464 U.S. 1044 (1984).
N.D.C.C. § 47-07-04 gives the author of any product of the mind, expressly including an invention, exclusive ownership while the product remains in the author's possession — an author-ownership companion provision whose interplay with § 34-02-11 no case found in our review has resolved.
The author of any product of the mind, whether it is an invention, a composition in letters or art, a design, with or without delineation or other graphical representation, has an exclusive ownership therein and in the representation or expression thereof which continues as long as the product and the representations or expressions thereof made by the author remain in the author's possession.
See N.D. Cent. Code § 47-07-04.
Must a North Dakota employer notify the employee?
No. North Dakota has a statutory invention-ownership regime, but it imposes no notice, disclosure, or acknowledgment duty of any kind — the contrast is with California, which requires written notice of the Labor Code §2870 carve-out under §2872, and Washington, which requires one under RCW 49.44.140(3). Those notice duties exist to mark a statutory employee carve-out; N.D.C.C. § 34-02-11 protects the employer, not the employee, so there is no statutory line for a notice to mark .
The statute vests the employer's interest unconditionally on its face — nothing in the text ties the employer's ownership to any warning, form, or disclosure given to the employee .
The neighboring provision sometimes mistaken for a disclosure regime points the other way. N.D.C.C. § 34-02-12 is an accounting-and-remittance rule — it obliges the employee to account to the employer and to give prompt notice of everything received for the employer's account; it imposes no invention-disclosure duty on either side and no employer notice obligation .
As a matter of drafting hygiene, a multistate confidential-information-and-invention-assignment agreement will often carry a §2872-style notice anyway, along with a prior-inventions schedule. In North Dakota that is portability, not compliance — the notice neither is required nor cures anything.
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N.D.C.C. § 34-02-11 vests the employer's interest by operation of law without conditioning it on any notice to, or disclosure by, the employee — North Dakota imposes no statutory invention-assignment notice requirement.
Everything which an employee acquires by virtue of the employee's employment, whether acquired lawfully or unlawfully or during or after the expiration of the term of the employee's employment, except any compensation which is due the employee from the employee's employer, belongs to the employer.
See N.D. Cent. Code § 34-02-11.
N.D.C.C. § 34-02-12 is an employee accounting-and-remittance duty, not an invention-disclosure regime — it obliges the employee to account and give notice of what is received for the employer's account, and imposes no notice duty on the employer.
An employee, upon demand, shall render to the employee's employer just accounts of all the employee's transactions in the course of the employee's service as often as may be reasonable, and the employee shall give, without demand, prompt notice to the employee's employer of everything which the employee receives for the employer's account.
See N.D. Cent. Code § 34-02-12.
Who owns an invention by default in North Dakota?
For an employee hired to invent, the employer — by statute as construed. In Keller v. Clark Equipment Co., the Eighth Circuit read N.D.C.C. § 34-02-11 through the prevailing hired-to-invent rule: an employee hired for inventive work who succeeds must assign the resulting patent, so absent a contrary agreement the employer owns. The North Dakota Supreme Court adopted that construction in First American Bank West v. Berdahl. For an employee who was not hired to invent, the question is open — the statute's literal everything-belongs-to-the-employer text points one way, the federal baseline that an invention belongs to its inventor points the other, and no North Dakota shop-right decision was found in our review. On a touch screen, a tap shows all 3 sources in this group.
Keller is the construing case. Writing on a clean slate, the Eighth Circuit anchored § 34-02-11 to the prevailing national rule for employees hired to invent .
The court then applied that rule to the facts — the inventor had been hired for his inventive abilities, which is what put the patent within the statute's reach .
“The district court found that Louis Keller was hired for his inventive abilities.”
What converts that Eighth Circuit prediction into North Dakota law is Berdahl, in which the state supreme court expressly followed the interpretation of § 34-02-11 described above . Its formulation preserves the same escape hatch — an agreement to the contrary displaces the statutory default . That is how the Keller inventors retained an ownership interest in their patent despite the statute .
Outside the hired-to-invent posture, the residue is genuinely uncertain. The federal baseline restated in Stanford v. Roche is that rights in an invention start with the inventor , and under United States v. Dubilier Condenser Corp. an employee who was not hired to invent ordinarily keeps the invention, leaving the employer at most a shop right . But § 34-02-11's text is not so limited, Berdahl applied it broadly to non-invention property, and our review found no North Dakota shop-right case at all. The honest statement of North Dakota's default is therefore layered: employer ownership where the employee was hired to invent, and an unresolved contest between the statute's literal breadth and the federal inventor-first baseline everywhere else.
Whatever the statute captures, it does not substitute for a written assignment. Keller frames the employer's statutory position as equitable ownership plus a duty to assign — not automatic legal title — and federal patent law recognizes transfers of legal title through a written instrument . So a North Dakota employer that wants a clean, recordable chain of title still needs a present-assignment clause (hereby assigns) that moves legal title from the inventor automatically on conception, rather than resting on the statute or on a future promise to assign .
Sources for this answer
Keller v. Clark Equipment Co. construes N.D.C.C. § 34-02-11 through the prevailing hired-to-invent rule — an employee employed to invent who succeeds makes the employer the equitable owner of the invention, with a duty to assign any resulting patent.
Although there are no cases construing this North Dakota law, the prevailing view in the United States is that when a person is employed for the purpose of inventing, and he or she succeeds in that task during the period of employment, the employer is the equitable owner of the invention and the employee must assign to the employer any patent he or she may obtain on the invention.
See Keller v. Clark Equipment Co., 715 F.2d 1280 (8th Cir. 1983), cert. denied, 464 U.S. 1044 (1984).
Keller v. Clark Equipment Co. applied N.D.C.C. § 34-02-11 in a hired-to-invent posture — the district court found the inventor was hired for his inventive abilities, which is what brought the patent within the statute's reach.
The district court found that Louis Keller was hired for his inventive abilities.
See Keller v. Clark Equipment Co., 715 F.2d 1280 (8th Cir. 1983), cert. denied, 464 U.S. 1044 (1984).
First American Bank West v. Berdahl adopts the Keller construction of N.D.C.C. § 34-02-11 as North Dakota law and preserves the agreement-to-the-contrary escape — absent such an agreement, what the employee acquires by virtue of the employment belongs to the employer.
Following the Keller interpretation of N.D.C.C. § 34-02-11, we conclude, absent an agreement to the contrary, the commissions earned by Berdahl belonged to the Bank.
See First American Bank West v. Berdahl, 556 N.W.2d 63 (N.D. 1996).
Keller v. Clark Equipment Co. affirms the finding that the employer agreed to recognize that the inventors retained an ownership interest in the patent, so an agreement to the contrary displaced the employer's ownership under N.D.C.C. § 34-02-11.
The district court, however, found that Melroe indeed agreed to recognize that the Kellers retained an ownership interest in the 117 patent and never claimed sole ownership.
See Keller v. Clark Equipment Co., 715 F.2d 1280 (8th Cir. 1983), cert. denied, 464 U.S. 1044 (1984).
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 a state acquisition statute operates against, and the reason a written present assignment is still needed for clean legal title.
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. supplies the federal common-law framework Keller drew on — an employee hired to make an invention must assign the resulting patent, while an employee not hired to invent ordinarily keeps the invention subject at most to the employer's shop right.
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).
Are trailing-assignment (holdover) clauses enforceable in North Dakota?
Untested — and the governing framework is voidness, not reasonableness. No North Dakota decision found in our review addresses a post-employment trailing-assignment clause. The statute such a clause would be tested under is N.D.C.C. § 9-08-06, which voids a contract restraining anyone from exercising a lawful profession, trade, or business to that extent, subject only to narrow sale-of-goodwill and business-dissolution exceptions. The North Dakota Supreme Court reads the statute strictly and has refused to soften it with judicially created exceptions, so a holdover clause that operates as a de facto non-compete faces being struck outright — severed as void, not rewritten to a reasonable scope. On a touch screen, a tap shows all 3 sources in this group.
The statutory text does the work. A restraining contract is void to that extent — the statute contains no reasonableness test for employment restraints and no authorization to trim an overbroad clause down to an enforceable core .
Warner and Co. v. Solberg is the modern statement that the statute means what it says .
“We see no ambiguity in N.D.C.C. § 9-08-06.”
Warner was urged to import the softening doctrines that courts elsewhere — including California, whose restraint statute shares the same Field Code text — had layered onto the rule, such as exceptions for trade secrets and customer lists. The court declined .
Osborne v. Brown & Saenger, Inc. adds the policy weight and closes the procedural escape route: North Dakota treats § 9-08-06 as a strong public policy, and it will not let an employer route around the statute with a foreign forum-selection or choice-of-law clause .
“Thus, we conclude that North Dakota has a strong public policy against non-compete agreements.”
What does that mean for a trailing invention-assignment clause? The threshold question — whether a holdover assignment is a restraint on exercising a profession at all, rather than a mere allocation of intellectual-property ownership — has never been decided in North Dakota, and Warner itself shows that a narrowly drawn post-employment clause can escape the statute when it does not actually restrain the former employee's ability to work. But if a court characterizes an untethered holdover — one sweeping in inventions conceived after employment ends, unmoored from the employer's trade secrets or the employee's prior work — as a de facto non-compete, the consequence under § 9-08-06 is outright voidness of the offending reach. The phrase to that extent void means severance of the offending restraint, not blue-pencil reformation to a reasonable duration or scope, and Warner forecloses the argument that some less burdensome version should survive. On a touch screen, a tap shows all 2 sources in this group.
None of this makes invention-assignment agreements suspect in themselves. In SolarBee, Inc. v. Walker, the North Dakota Supreme Court affirmed a damages judgment against employees who breached a proprietary-information-and-invention-assignment agreement through during-employment disloyalty .
SolarBee is also primary-source proof that the post-employment question remains open: the defendants raised § 9-08-06 against the agreement's post-employment restraints, and the issue dropped out only because the findings involved no post-employment conduct .
Sources for this answer
N.D.C.C. § 9-08-06 voids a contract restraining anyone from exercising a lawful profession, trade, or business to that extent, subject only to narrow enumerated exceptions — the void-outright framework a post-employment trailing-assignment clause that functions as a restraint would be tested under.
A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except:
See N.D. Cent. Code § 9-08-06.
Warner and Co. v. Solberg holds that N.D.C.C. § 9-08-06 is unambiguous — post-employment restraints are void to that extent, with no reasonableness gloss.
We see no ambiguity in N.D.C.C. § 9-08-06.
See Warner and Co. v. Solberg, 2001 ND 156, 634 N.W.2d 65.
Warner and Co. v. Solberg expressly declined to adopt the judicially created softening doctrines other courts have layered onto identically derived restraint statutes — North Dakota courts will not save a covered restraint by narrowing it or implying exceptions.
Because of the plain language of the statute, the history of legislation in North Dakota concerning this issue, and because North Dakota has enacted trade-secrets legislation, we decline to do so.
See Warner and Co. v. Solberg, 2001 ND 156, 634 N.W.2d 65.
Osborne v. Brown & Saenger, Inc. holds that North Dakota has a strong public policy against non-compete agreements — the policy backdrop against which a holdover clause characterized as a restraint would be judged.
Thus, we conclude that North Dakota has a strong public policy against non-compete agreements.
See Osborne v. Brown & Saenger, Inc., 2017 ND 288, 904 N.W.2d 34.
SolarBee, Inc. v. Walker affirms a damages judgment for breach of a proprietary-information-and-invention-assignment agreement based on during-employment disloyalty — North Dakota courts enforce these agreements as to conduct during employment.
violated the Proprietary Information Agreement and Invention Assignment by diverting customers, engaging in conflicting activities and consulting and rendering services to persons or entities marketing products to or in competition with systems or services offered by SolarBee.
See SolarBee, Inc. v. Walker, 2013 ND 110, 833 N.W.2d 422.
SolarBee, Inc. v. Walker shows the § 9-08-06 post-employment question was raised and expressly left undecided — the defendants abandoned the argument only because the findings involved no post-employment conduct, so how the statute applies to post-employment restraints in an invention-assignment agreement remains open.
In their pre-trial brief, Walker and Eilers raised North Dakota’s public policy against restraints on solicitation after employment ceases, see N.D.C.C. § 9-08-06; Warner and Co. v. Solberg, 2001 ND 156 , 634 N.W.2d 65 , but they do not renew it in view of the findings that do not include post-employment conduct.
See SolarBee, Inc. v. Walker, 2013 ND 110, 833 N.W.2d 422.
N.D.C.C. § 9-08-06 voids a covered restraint to that extent — severance of the offending clause, not reformation — so an untethered holdover clause characterized as a restraint falls entirely rather than being trimmed.
A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except:
See N.D. Cent. Code § 9-08-06.
Warner and Co. v. Solberg declined to adopt judicially created softening doctrines for N.D.C.C. § 9-08-06 — a drafter cannot count on a North Dakota court preserving a less burdensome version of an overbroad restraint.
Because of the plain language of the statute, the history of legislation in North Dakota concerning this issue, and because North Dakota has enacted trade-secrets legislation, we decline to do so.
See Warner and Co. v. Solberg, 2001 ND 156, 634 N.W.2d 65.
Osborne v. Brown & Saenger, Inc. refused to enforce a forum-selection clause that would have routed the dispute around N.D.C.C. § 9-08-06 — foreign forum-selection and choice-of-law clauses cannot be used to evade North Dakota's restraint statute.
the forum-selection clause in the parties’ employment agreement violates North Dakota’s public policy against non-compete agreements. The non-compete clause is unenforceable under N.D.C.C. § 9-08-06 to the extent it limits Osborne from exercising a lawful profession, trade, or business in North Dakota.
See Osborne v. Brown & Saenger, Inc., 2017 ND 288, 904 N.W.2d 34.
Because N.D.C.C. § 9-08-06 voids a covered restraint outright — severing it as void to that extent rather than rewriting it to a reasonable scope — tether any trailing-assignment clause to inventions conceived or reduced to practice during employment, or derived from the employer's trade secrets or confidential information, and keep any post-employment tail short and narrow. An untethered holdover that sweeps in a former employee's future inventions functions as a de facto non-compete and risks being struck entirely, and no North Dakota court will preserve a less burdensome version of it for you. On a touch screen, a tap shows all 2 sources in this group.
Do not plan on evading North Dakota's restraint statute with a foreign choice-of-law or forum-selection clause in the invention-assignment agreement. In Osborne v. Brown & Saenger, Inc., the North Dakota Supreme Court held a forum-selection clause in an employment agreement unenforceable because it would have circumvented the strong public policy behind N.D.C.C. § 9-08-06 — so a multistate employer that papers a North Dakota employee on another state's law should still expect the holdover analysis above to apply .
What does federal law require a confidentiality and invention assignment agreement in North Dakota 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).