Can a South Carolina employer require assignment of every invention?
There is no statutory ceiling, and — unusually — there is a direct state-supreme-court answer on what governs instead. South Carolina has no employee-invention-assignment statute of any kind, so nothing like a California-style own-time carve-out limits what an assignment clause may reach. In Milliken & Co. v. Morin, the South Carolina Supreme Court held that invention-assignment and confidentiality clauses are not restraints of trade and are not strictly construed in favor of the employee; they are tested under a general reasonableness standard. On a touch screen, a tap shows all 2 sources in this group.
The statutory silence is complete. A full-text search of the South Carolina Code of Laws returns no match for the word invention anywhere in the code, and the chapter indexes of Title 41 (Labor and Employment) and Title 39 (Trade and Commerce) contain no provision regulating employment invention-assignment clauses. South Carolina also has no general employment noncompete statute — its restrictive-covenant law is entirely common law.
That common-law backdrop is strict. South Carolina courts treat covenants not to compete with disfavor and construe them against the employer .
Milliken & Co. v. Morin expressly pulled invention-assignment and confidentiality clauses out of that regime. The court reasoned that assignment clauses do not restrain the employee's trade at all — they allocate ownership of an invention .
The holding is explicit and is the controlling South Carolina rule .
The nearest IP-adjacent statute is the South Carolina Trade Secrets Act, and it points the same direction rather than limiting assignment clauses. Section 39-8-30(B) imposes a nondisclosure duty on every employee who knows of an employer's trade secret, “independently of and in addition to any written contract of employment” — a statutory secrecy floor, not a ceiling on what the contract may capture .
The practical consequence is that a South Carolina employer can contract for assignment more broadly than an employer in a carve-out state, and it does so under a friendlier standard of review than a noncompete would get. But the breadth is not unlimited: the clause must still be reasonable on its face, and a clause drafted so broadly that it restrains the employee's ability to work is treated as a noncompete and tested under the strict regime — a limit discussed with the holdover question below.
Sources for this answer
Milliken & Co. v. Morin holds that confidentiality and invention-assignment clauses are not in restraint of trade and are not strictly construed in favor of the employee, so no statutory or strict-construction ceiling limits what a South Carolina assignment clause may reach.
We therefore hold confidentiality and invention assignment clauses are not in restraint of trade and should not be strictly construed in favor of the employee.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Milliken & Co. v. Morin reasons that invention-assignment clauses do not restrain the employee's trade but merely allocate ownership of an invention, the premise for exempting them from strict noncompete scrutiny.
Thus, they do not operate in restraint of the employee’s trade but merely vest ownership of an invention with the entity which ought to have it.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Rental Uniform Serv. of Florence, Inc. v. Dudley states the strict South Carolina backdrop rule that covenants not to compete are disfavored and strictly construed against the employer — the regime Milliken exempts invention-assignment clauses from.
Restrictive covenants not to compete are generally disfavored and will be strictly construed against the employer.
See Rental Uniform Serv. of Florence, Inc. v. Dudley, 278 S.C. 674, 301 S.E.2d 142 (S.C. 1983).
S.C. Code Ann. § 39-8-30(B) imposes a trade-secret nondisclosure duty on every employee independently of any contract — a statutory secrecy floor adjacent to invention assignment, not a statute limiting assignment clauses.
Every employee who is informed of or should reasonably have known from the circumstances of the existence of any employer's trade secret has a duty to refrain from using or disclosing the trade secret without the employer's permission independently of and in addition to any written contract of employment, secrecy agreement, noncompete agreement, nondisclosure agreement, or other agreement between the employer and the employee.
See S.C. Code Ann. § 39-8-30(B). (S.C. Code Ann. § 39-8-30(B))
Must a South Carolina employer notify the employee?
Not applicable. Because South Carolina 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 notice paragraph that appears in the leading South Carolina case was a term of the contract itself — a voluntary narrowing device, not a statutory prerequisite .
There is nothing to give notice of. Notice requirements exist in carve-out states precisely to alert the employee to a statutory own-time exclusion that limits the assignment; South Carolina has enacted no such exclusion, 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 carve-out that South Carolina does not have.
The distinction matters because the agreement in Milliken & Co. v. Morin did contain a notice. Milliken's associate agreement carried a NOTICE paragraph telling the employee that the assignment “does not apply to an Invention for which no equipment, supplies, facility or proprietary information of Milliken was used and which was developed entirely on your own time”, absent a relation to Milliken's business or research or a connection to the employee's work . That paragraph mirrors the shape of the statutory notices used in carve-out states, but in South Carolina it was purely contractual — the employer chose to narrow its own clause, and that narrowness helped the clause survive reasonableness review.
For a multistate employer the takeaway is double-edged. A South Carolina employer neither has to give a § 2872-style notice nor can point to one as a statutory safe harbor. But a contractual own-time carve-out of the Milliken type is exactly the kind of self-imposed limit that makes an assignment clause look reasonable to a South Carolina court, so dropping the notice language from a multistate form gains little and gives up real protection.
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The agreement upheld in Milliken & Co. v. Morin contained a contractual NOTICE paragraph excluding own-time, no-employer-resources inventions lacking a business or work nexus — a voluntary contract term, not a statutory notice requirement, since South Carolina has no invention-assignment statute.
This is to notify you that paragraph A of this Milliken “Associate Agreement” you are being asked to sign as a condition of your employment does not apply to an Invention for which no equipment, supplies, facility or proprietary information of Milliken was used and which was developed entirely on your own time, and (1) which does not relate (a) directly to the business of Milliken or (b) to Milliken’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by you for Milliken.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Who owns an invention by default in South Carolina?
The inventor, unless hired to invent. No South Carolina statute addresses default invention ownership, and no South Carolina appellate decision found in our review articulates the hired-to-invent or shop-right doctrines — so the default comes from the federal common-law baseline: rights in an invention belong to the employee who conceived it, with a narrow exception for the employee hired to invent. On a touch screen, a tap shows all 2 sources in this group.
Stanford v. Roche anchors the default. The Supreme Court held that even the Bayh-Dole Act did not displace the long-standing rule that an invention belongs to its inventor, treating that premise as the baseline against which any assignment is measured .
Because ownership starts with the inventor, an employer's title is derivative — it exists only if and to the extent the employee assigned it .
The principal exception is the employee hired to invent. Under United States v. Dubilier Condenser Corp., an employee engaged to make a particular invention who succeeds during the term of service must assign the resulting patent to the employer . Short of that, an employee who used the employer's time, tools, and materials to reach a concrete result gives the employer at most an equitable shop right — a non-exclusive license, not ownership.
South Carolina's own leading case does not change this picture, because it is contract-clause authority rather than default-ownership authority: Milliken & Co. v. Morin decided how an express assignment and holdover clause is reviewed, not who owns absent a contract. Its facts do, however, show what dependable South Carolina drafting looks like. The Milliken clause used present-assignment wording — the employee agreed to “Assign (and I do hereby assign) to Milliken all of my rights to such Inventions” — so title passed automatically rather than resting on a future promise to assign . Because South Carolina has no statute filling the gap, a written present-assignment (hereby assign) clause remains the only reliable path to employer ownership.
Sources for this answer
Stanford v. Roche confirms the long-standing premise of U.S. patent law that rights in an invention belong to the inventor.
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).
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 an employer takes title only through an assignment 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).
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.
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).
The agreement upheld in Milliken & Co. v. Morin used present-assignment wording — assign (and I do hereby assign) — illustrating the drafting that passes title automatically, since Milliken reviews an express clause rather than deciding default ownership.
Assign (and I do hereby assign) to Milliken all of my rights to such Inventions, and to applications for letters patent, copyright registrations and/or mask work registrations in all countries and to letters patent, copyright registrations and/or mask work registrations granted upon such Inventions in all countries.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Are trailing-assignment (holdover) clauses enforceable in South Carolina?
Yes, when reasonable — and South Carolina is one of the few states where that answer rests on a direct holding rather than analogy. In Milliken & Co. v. Morin, the South Carolina Supreme Court upheld a clause assigning inventions conceived within one year after termination, calling the one-year holdover eminently reasonable, and reviewed it under a general reasonableness standard rather than strict noncompete scrutiny. On a touch screen, a tap shows all 2 sources in this group. The limit is functional: a trailing clause broad enough to operate as a noncompete is tested as one, and South Carolina courts will not blue-pencil it. On a touch screen, a tap shows all 2 sources in this group.
Milliken is the rare case that decides the holdover question on its facts. The agreement reached inventions conceived during employment or within one year after termination, but only those relating to Milliken's business or its actual or anticipated research, or resulting from the employee's work — and it excluded own-time, no-employer-resources inventions through the contractual notice discussed above. Against that narrow scope, the court's assessment was emphatic .
“Moreover, the one-year holdover provision is eminently reasonable.”
The court framed the governing inquiry as a balance rather than a presumption of invalidity, explaining that “these agreements are designed to strike an appropriate balance between protecting an employer’s valuable interest in its proprietary information and permitting an employee to find gainful employment in his chosen field.”
To see how favorable that standard is, compare the regime Milliken displaced. For a true covenant not to compete, South Carolina applies a demanding multi-factor test — Rental Uniform Serv. of Florence, Inc. v. Dudley ties enforceability to necessity, time-and-place limits, hardship, public policy, and consideration On a touch screen, a tap shows all 2 sources in this group.: “An agreement’s enforceability depends on whether it is necessary for the protection of the legitimate interest of the employer, is reasonably limited in its operation with respect to time and place, is not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood, is reasonable from the standpoint of” “sound public policy, and is supported by a valuable consideration.”
Sermons v. Caine & Estes Insurance Agency had applied the same five-part standard in 1980, quoting an earlier decision, and held three covenants unenforceable under it. On a touch screen, a tap shows all 2 sources in this group.
And a covenant that fails any part of that test falls entirely, because South Carolina refuses to rewrite overbroad restrictions .
The functional limit on Milliken is real. In Fay v. Total Quality Logistics, LLC, the Court of Appeals reversed summary judgment for the employer because nondisclosure provisions with no time limit “operated as noncompete provisions and did not contain a reasonable time restriction, which violated the public policy of South Carolina” — pulling them out of the safe zone described above and back into the strict covenant regime . A trailing-assignment clause drafted so broadly that it restrains an ex-employee's ability to work in the field runs the same reclassification risk, and once reclassified it cannot be saved by narrowing.
The unsettled frontier is everything beyond the Milliken facts. The court blessed one year, tied to a business-or-work nexus, with a contractual own-time carve-out. No South Carolina decision found in our review approves a longer holdover period, a trailing clause without a carve-out, or a clause keyed to the employer's industry generally rather than the employee's actual work — so one year with a tight nexus is the supported safe harbor, and anything broader is untested rather than approved.
Sources for this answer
Milliken & Co. v. Morin upholds a one-year post-employment holdover invention-assignment provision as eminently reasonable — a direct South Carolina Supreme Court holding on trailing-clause enforceability.
Moreover, the one-year holdover provision is eminently reasonable.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Milliken & Co. v. Morin frames invention-assignment review as a balance between the employer's interest in its proprietary information and the employee's ability to find gainful employment — the general reasonableness standard that replaces strict noncompete scrutiny.
these agreements are designed to strike an appropriate balance between protecting an employer’s valuable interest in its proprietary information and permitting an employee to find gainful employment in his chosen field.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Rental Uniform Serv. of Florence, Inc. v. Dudley opens South Carolina's five-factor covenant test — necessity, time-and-place limits, hardship, public policy, and consideration — the strict regime a trailing clause re-enters if it functions as a noncompete.
An agreement’s enforceability depends on whether it is necessary for the protection of the legitimate interest of the employer, is reasonably limited in its operation with respect to time and place, is not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood, is reasonable from the standpoint of
See Rental Uniform Serv. of Florence, Inc. v. Dudley, 278 S.C. 674, 301 S.E.2d 142 (S.C. 1983).
Rental Uniform Serv. of Florence, Inc. v. Dudley closes the five-factor covenant test with the public-policy and consideration factors; the sentence spans a reporter page break, so the test is carded in two contiguous parts.
sound public policy, and is supported by a valuable consideration.
See Rental Uniform Serv. of Florence, Inc. v. Dudley, 278 S.C. 674, 301 S.E.2d 142 (S.C. 1983).
Sermons v. Caine & Estes Insurance Agency states that the enforceability of a noncompetition clause depends on the five-part standard (necessity to protect the employer's legitimate interest, reasonable time and place limits, no undue harshness to the employee, sound public policy, and valuable consideration), quoting Oxman v. Sherman, 239 S.C. 218 (1961).
The enforceability of a noncompetition clause depends on whether it is “. . . necessary for the protection of the legitimate interest of the employer, is reasonably limited in its operation with respect to time and place, is not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood, is reasonable from the standpoint of sound public policy, and is supported by a valuable consideration.”
See Sermons v. Caine & Estes Ins. Agency, Inc., 275 S.C. 506, 273 S.E.2d 338 (1980) (quoting Oxman v. Sherman, 239 S.C. 218, 122 S.E.2d 559 (1961)).
Sermons v. Caine & Estes Insurance Agency applies that standard and holds all three sets of covenants before it unenforceable as a matter of law.
Applying the clearly-defined standard above, we conclude that, as a matter of law, all three sets of restrictions are unenforceable.
See Sermons v. Caine & Estes Ins. Agency, Inc., 275 S.C. 506, 273 S.E.2d 338 (1980).
Poynter Investments, Inc. v. Century Builders of Piedmont, Inc. holds that South Carolina courts cannot rewrite the restrictions in a noncompete clause, which must stand or fall on their own terms — so an assignment clause reclassified as a noncompete falls entirely rather than being narrowed.
These cases stand for the proposition that, in South Carolina, the restrictions in a non-compete clause cannot be rewritten by a court or limited by the parties’ agreement, but must stand or fall on their own terms.
See Poynter Invs., Inc. v. Century Builders of Piedmont, Inc., 387 S.C. 583, 694 S.E.2d 15 (S.C. 2010).
Fay v. Total Quality Logistics, LLC holds that nondisclosure provisions lacking a reasonable time restriction operated as noncompete provisions and violated South Carolina public policy — the functional-reclassification limit on Milliken's friendlier standard.
We agree with Fay and reverse the circuit court’s grant of summary judgment to TQL because the nondisclosure provisions operated as noncompete provisions and did not contain a reasonable time restriction, which violated the public policy of South Carolina.
See Fay v. Total Quality Logistics, LLC, 419 S.C. 622, 799 S.E.2d 318 (S.C. Ct. App. 2017).
The agreement upheld in Milliken & Co. v. Morin carried a contractual NOTICE excluding own-time, no-employer-resources inventions lacking a business or work nexus — the self-imposed narrowing that kept the clause within the reasonableness safe harbor.
This is to notify you that paragraph A of this Milliken “Associate Agreement” you are being asked to sign as a condition of your employment does not apply to an Invention for which no equipment, supplies, facility or proprietary information of Milliken was used and which was developed entirely on your own time, and (1) which does not relate (a) directly to the business of Milliken or (b) to Milliken’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by you for Milliken.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
The clause upheld in Milliken & Co. v. Morin used present-assignment wording — assign (and I do hereby assign) — so title passed automatically, the drafting pattern to preserve in a South Carolina holdover clause.
Assign (and I do hereby assign) to Milliken all of my rights to such Inventions, and to applications for letters patent, copyright registrations and/or mask work registrations in all countries and to letters patent, copyright registrations and/or mask work registrations granted upon such Inventions in all countries.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (S.C. 2012).
Milliken & Co. v. Morin is a green light for a modest holdover clause, not a broad one. The clause the South Carolina Supreme Court upheld trailed only one year past termination, reached only inventions tied to the employer's business, research, or the employee's own work, and carried a contractual notice excluding inventions developed entirely on the employee's own time without employer resources . Draft to that shape: keep the trailing period at one year, tie it to the employee's actual work and the employer's proprietary information, keep an own-time carve-out even though no statute requires one, and use present-assignment (hereby assign) wording so title passes automatically . A trailing clause broad enough to restrain an ex-employee's ordinary employment is tested as a noncompete , and because South Carolina courts will not rewrite an overbroad restriction, it falls in its entirety rather than being trimmed to a lawful scope .
What does federal law require a confidentiality and invention assignment agreement in South Carolina 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).