Can a Vermont employer require assignment of every invention?
There is no statutory ceiling. Unlike California or New York, Vermont has no employee-invention-assignment statute — nothing that voids an assignment of a true own-time, own-resource invention — so an assignment clause's reach is bounded only by ordinary contract law, the common-law inventor-owns default, and the federal patent and copyright overlay. Vermont's trade-secrets act expressly leaves contractual remedies untouched, and the baseline the contract operates against is that rights in an invention belong to the inventor.
Because there is no statute on point, the limits come from general principles rather than a legislative carve-out. Title 21, chapter 5 of the Vermont Statutes Annotated (Employment Practices) — current through the 2025 session — contains no invention-, patent-, or intellectual-property-assignment provision, and the only invention-focused chapter anywhere in the Vermont statutes is 9 V.S.A. chapter 120, a consumer-protection statute aimed at bad-faith assertions of patent infringement, not employment. The gap is not an oversight: S.113 (2013), an act relating to employee rights to certain inventions, would have created a California-style own-time carve-out, and it died after a first reading and committee referral. Vermont considered the statutory model and declined it.
What Vermont statute law does say points the same way. The Vermont Trade Secrets Act — the state's version of the Uniform Trade Secrets Act, 9 V.S.A. §§ 4601–4609 — expressly does not affect contractual remedies, so invention-assignment and nondisclosure agreements are left to ordinary contract law rather than displaced by the statute .
“contractual remedies, whether or not based upon misappropriation of a trade secret”
The substantive default that contract law operates against is the federal patent premise restated in Stanford v. Roche: absent an effective assignment, rights in an invention belong to the person who conceived it .
When a Vermont-law invention agreement has mattered in litigation, it has mattered as contract and as trade-secret evidence. In Vermont Microsystems, Inc. v. Autodesk, Inc., the Second Circuit, applying Vermont trade-secret law, treated a departing engineer's Invention and Nondisclosure Agreement as the foundation of the employer's trade-secret claim .
That decision polices secrecy, not ownership — it is not a holding that any particular assignment scope is enforceable. The practical consequence is that a Vermont employer can, in principle, contract for assignment more broadly than a California or Washington 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, subject to general contract-law defenses, and to the extent it operates as a restraint on the employee's future work it faces Vermont's covenant-reasonableness limits, discussed in the trailing-clause question below.
Sources for this answer
Primary law
A.1 Vermont Trade Secrets Act, 9 V.S.A. § 4607(b)(1)9 V.S.A. § 4607(b)(1) provides that the Vermont Trade Secrets Act does not affect contractual remedies, so invention-assignment and nondisclosure agreements are governed by ordinary contract law rather than displaced by the statute.
contractual remedies, whether or not based upon misappropriation of a trade secret
See 9 V.S.A. § 4607(b)(1).
Case law · 2011-06-06
A.2 Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular SystemsStanford v. Roche confirms the long-standing premise of U.S. patent law that rights in an invention belong to the inventor, the baseline against which any assignment clause is measured.
Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
Case law · 1996-07-08
A.3 Vermont Microsystems, Inc. v. Autodesk, Inc.Vermont Microsystems v. Autodesk, applying Vermont trade-secret law, rested the employer's trade-secret rights on the employee's Invention and Nondisclosure Agreement — Vermont-law invention agreements are policed by contract and trade-secret law, not by any invention-assignment statute.
As a full-time employee, Berkes signed an Invention and Nondisclosure Agreement in which he acknowledged that all trade secrets developed on VMI's time were company property and promised not to disclose such trade secrets for the benefit of himself or others.
See Vermont Microsystems, Inc. v. Autodesk, Inc., 88 F.3d 142 (2d Cir. 1996).
Must a Vermont employer notify the employee?
Not applicable. Because Vermont 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). What matters in Vermont instead is practical notice about confidentiality: trade-secret status under the Vermont Trade Secrets Act depends on efforts that are reasonable under the circumstances to maintain secrecy .
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; Vermont 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 Vermont does not have.
Notice to employees still matters in Vermont — just through trade-secret law rather than an invention statute. The Vermont Trade Secrets Act conditions trade-secret status on the owner's secrecy efforts, which is what makes a signed invention and confidentiality agreement legally valuable here .
“the subject of efforts that are reasonable under the circumstances to maintain its secrecy”
The Vermont Supreme Court has enforced that principle against an employer. In Omega Optical, Inc. v. Chroma Technology Corp., the court affirmed judgment against an employer whose confidence claims failed because it never told its employees what was supposed to stay secret .
The same logic runs through the invention-agreement case law. Vermont Microsystems required the employer to prove its own secrecy conduct before it could enforce rights under the employee's Invention and Nondisclosure Agreement .
For a multistate employer the takeaway is the inverse of the notice states: a Vermont employer neither has to give a § 2872-style notice nor can rely on one to cure an overbroad clause. But an employer that skips written agreements and confidentiality notices altogether weakens the trade-secret protection that Vermont law does supply.
Sources for this answer
Primary law
B.1 Vermont Trade Secrets Act, 9 V.S.A. § 4601(3)9 V.S.A. § 4601(3) conditions trade-secret status on efforts that are reasonable under the circumstances to maintain secrecy, which is why written invention and confidentiality agreements matter in Vermont even though no statute requires any employee notice.
the subject of efforts that are reasonable under the circumstances to maintain its secrecy
See 9 V.S.A. § 4601(3).
Case law
B.2 Omega Optical, Inc. v. Chroma Technology Corp.Omega Optical v. Chroma Technology affirms judgment against an employer that failed to put its employees on explicit or implicit notice of confidentiality — telling employees what is confidential matters practically in Vermont even though no statute requires it.
In light of this and other evidence available to the trial court, we find no error in the court’s finding that Omega failed to take steps to put its employees on explicit or implicit notice that certain information conveyed to them during their employment was to be kept confidential.
See Omega Optical, Inc. v. Chroma Technology Corp., 174 Vt. 10, 800 A.2d 1064 (2002).
Case law · 1996-07-08
B.3 Vermont Microsystems, Inc. v. Autodesk, Inc.Vermont Microsystems v. Autodesk holds that to enforce rights under an employee's Invention and Nondisclosure Agreement, the employer must demonstrate that it took reasonable steps to guard its trade secrets.
To enforce its rights under the Invention and Nondisclosure Agreement, VMI must demonstrate that it took reasonable steps to guard its trade secrets.
See Vermont Microsystems, Inc. v. Autodesk, Inc., 88 F.3d 142 (2d Cir. 1996).
Who owns an invention by default in Vermont?
The inventor, unless hired to invent. Absent a written assignment, the baseline under federal patent law — which governs who holds title to a patentable invention in Vermont as elsewhere — is that rights belong to the employee who conceived it. The narrow exception is the employee hired to invent, whose resulting invention the employer may claim.
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. Any third-party interest must trace back to that inventor-grantor .
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, where the employee is neither hired to invent nor bound by a written assignment but has used the employer's time, tools, and materials to reach a concrete result, the employer's remedy under Dubilier is only an equitable shop right — a non-exclusive license to use the invention, not ownership of it. No Vermont appellate decision found in our review addresses hired-to-invent, shop right, or the default ownership of an employee invention, so the federal baseline operates unmodified; the closest Vermont-flavored authority, Vermont Microsystems, enforced trade-secret rights under an invention agreement and is not an ownership-default holding. Because ownership therefore starts with the inventor and Vermont has no statute filling the gap, the dependable path for an employer is 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 equitable claim.
Sources for this answer
Case law · 2011-06-06
C.1 Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular SystemsStanford 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).
Case law · 2011-06-06
C.3 Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular SystemsStanford 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).
Case law · 1933-05-08
C.2 United States v. Dubilier Condenser Corp.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).
Are trailing-assignment (holdover) clauses enforceable in Vermont?
Unsettled. No Vermont decision found in our review addresses a trailing clause that reaches inventions first conceived after employment ends, and there is no statutory framework to supply a cap — Vermont has no invention-assignment statute and no employment noncompete statute either. Because a holdover clause operates as a restraint on the former employee's work, a Vermont court would most likely test it under the state's covenant-reasonableness line, proceeding with caution but enforcing a restraint the employer shows to be reasonable.
Two gaps define the Vermont picture. First, there is no statute: nothing caps the duration of a post-employment trailing assignment, and Vermont's covenant regime is entirely common law — a bill that would have banned most employment noncompetes (H.205, 2025–2026 biennium) was recommitted to committee in March 2026 and is not law. Second, our review found no Vermont decision applying the covenant cases to an invention-holdover clause, so everything below is analogy from the restrictive-covenant line, not holding.
What Vermont does supply is a well-developed posture toward restraints on competitive employment. The starting point is caution. Roy's Orthopedic, Inc. v. Lavigne states the threshold rule .
Caution is not hostility. In Vermont Electric Supply Co. v. Andrus, the Vermont Supreme Court — restating tests that trace to Dyar Sales & Machinery Co. v. Bleiler (1934) — framed enforcement as the default and put the burden of defeating a restraint on the employee, and Andrus itself upheld a five-year covenant on its facts .
The current framework is the Restatement formulation adopted in Systems and Software, Inc. v. Barnes, which asks whether the restraint exceeds what the employer's legitimate interest needs or is outweighed by hardship to the employee and injury to the public .
Barnes also matters for what a holdover clause could permissibly protect: the court rejected the argument that restraints may protect only trade secrets or confidential customer information, recognizing a broader band of legitimate interests .
If a Vermont court found a holdover clause overbroad, the likely — but not guaranteed — outcome is trimming rather than total invalidation. The Second Circuit predicted in A.N. Deringer, Inc. v. Strough that Vermont would enforce a defective restrictive covenant to the limit of its validity, and the Vermont Supreme Court in Summits 7, Inc. v. Kelly later signaled the same approach.
“the court may enforce the agreement to the extent that it is reasonable.”
Neither statement is a square Vermont Supreme Court holding adopting reformation — Deringer is a federal court's prediction of Vermont law, and the Summits 7 passage was not necessary to the judgment — so an overbroad trailing clause still carries real total-invalidation risk.
One wrinkle cuts in the employer's favor. Vermont treats mid-employment consideration generously: Summits 7 holds that continued at-will employment alone supports a restrictive covenant signed after hiring, which makes rolling an invention-assignment agreement out to existing Vermont employees easier than in states that demand fresh consideration .
The safe reading is that a modest holdover clause — short, tied to the employer's legitimate interests, and no broader than needed — has a reasonable prospect of enforcement under the Andrus/Barnes line, while an aggressive one is at meaningful risk, and the invention-specific application of all of it remains undecided.
Sources for this answer
Case law · 1982-12-14
D.1 Roy's Orthopedic, Inc. v. LavigneRoy's Orthopedic v. Lavigne states Vermont's threshold posture — courts proceed with caution when asked to enforce restraints on competitive employment — the frame a holdover invention-assignment clause would most likely be tested under.
When this Court is asked to enforce restrictive covenants against competitive employment, we will proceed with caution, since such restraints “run counter to that public policy favoring the right of individuals to freely engage in desirable commercial activity.”
See Roy's Orthopedic, Inc. v. Lavigne, 142 Vt. 347, 454 A.2d 1242 (1982).
Case law · 1974-02-05
D.2 Vermont Electric Supply Co. v. AndrusVermont Electric Supply v. Andrus, restating the Dyar Sales tests, holds that a restraint will be enforced unless it is contrary to public policy, unnecessary for the employer's protection, or unnecessarily restrictive of the employee's rights — and places the burden of establishing those facts on the employee.
enforcement will be ordered unless the agreement is found to be contrary to public policy, unnecessary for protection of the employer, or unnecessarily restrictive of the rights of the employee, with due regard being given to the subject matter of the contract and the circumstances and conditions under which it is to be performed. The burden of establishing such facts is on the employee.
See Vermont Electric Supply Co. v. Andrus, 132 Vt. 195, 315 A.2d 456 (1974).
Case law · 2005-08-19
D.3 Systems and Software, Inc. v. BarnesSystems and Software v. Barnes states Vermont's current reasonableness framework, applying the Restatement (Second) of Contracts § 188(1) formulation for when a restraint is unreasonably in restraint of trade.
is unreasonably in restraint of trade if (a) the restraint is greater than is needed to protect the promisee’s legitimate interest, or (b) the promisee’s need is outweighed by the hardship to the promisor and the likely injury to the public.
See Systems & Software, Inc. v. Barnes, 2005 VT 95, 178 Vt. 389, 886 A.2d 762.
Case law · 2005-08-19
D.4 Systems and Software, Inc. v. BarnesSystems and Software v. Barnes rejects the premise that restraints may be enforced only to protect trade secrets or confidential customer information — Vermont recognizes a broader band of legitimate interests, which frames what a holdover assignment clause could permissibly protect.
This argument fails because it is based on a faulty premise — that noncompetition agreements may be enforced to protect only trade secrets or confidential customer information.
See Systems & Software, Inc. v. Barnes, 2005 VT 95, 178 Vt. 389, 886 A.2d 762.
Case law · 1996-12-31
D.5 A.N. Deringer, Inc. v. StroughA.N. Deringer v. Strough is the Second Circuit's prediction, applying Vermont law, that Vermont would enforce a defective restrictive covenant to the limit of its validity — a prediction, not a Vermont Supreme Court holding.
Thus, we conclude that Vermont would permit enforcement of a defective restrictive covenant to the limit of its validity.
See A.N. Deringer, Inc. v. Strough, 103 F.3d 243 (2d Cir. 1996).
Case law · 2005-08-19
D.6 Summits 7, Inc. v. KellySummits 7 v. Kelly signals that a Vermont court may enforce a restrictive agreement to the extent that it is reasonable — the strongest Vermont Supreme Court support for trimming rather than voiding an overbroad restraint, though the point was not necessary to the judgment.
the court may enforce the agreement to the extent that it is reasonable.
See Summits 7, Inc. v. Kelly, 2005 VT 97, 178 Vt. 396, 886 A.2d 365.
Case law · 2005-08-19
D.7 Summits 7, Inc. v. KellySummits 7 v. Kelly holds that continued at-will employment alone is sufficient consideration for a restrictive covenant signed during employment, which supports rolling out invention-assignment agreements to existing Vermont employees without fresh consideration.
we agree with the superior court, the majority of other courts, and the recent Restatement draft that continued employment alone is sufficient consideration to support a covenant not to compete entered into during an at-will employment relationship.
See Summits 7, Inc. v. Kelly, 2005 VT 97, 178 Vt. 396, 886 A.2d 365.
Case law
D.8 Smith, Bell & Hauck, Inc. v. CullinsSmith, Bell & Hauck v. Cullins holds that an employee's restrictive covenant is personal to the contracting employer and incapable of effective assignment without the employee's consent or ratification — a successor-enforcement trap for invention-assignment agreements bundled with restrictive covenants in an acquisition.
Since the beneficial interest in Cullins’ agreement not to engage in the insurance business was personal to Smith, Bell & Company, Inc., it was incapable of effective assignment without the employee’s consent or ratification.
See Smith, Bell & Hauck, Inc. v. Cullins, 123 Vt. 96, 183 A.2d 528 (1962).
Primary law
D.9 Vermont Trade Secrets Act, 9 V.S.A. § 4601(3)9 V.S.A. § 4601(3) conditions trade-secret status on efforts that are reasonable under the circumstances to maintain secrecy, which is why written invention and confidentiality agreements matter in Vermont even though no statute requires any employee notice.
the subject of efforts that are reasonable under the circumstances to maintain its secrecy
See 9 V.S.A. § 4601(3).
Case law
D.10 Omega Optical, Inc. v. Chroma Technology Corp.Omega Optical v. Chroma Technology affirms judgment against an employer that failed to put its employees on explicit or implicit notice of confidentiality — telling employees what is confidential matters practically in Vermont even though no statute requires it.
In light of this and other evidence available to the trial court, we find no error in the court’s finding that Omega failed to take steps to put its employees on explicit or implicit notice that certain information conveyed to them during their employment was to be kept confidential.
See Omega Optical, Inc. v. Chroma Technology Corp., 174 Vt. 10, 800 A.2d 1064 (2002).
Case law · 1996-07-08
D.11 Vermont Microsystems, Inc. v. Autodesk, Inc.Vermont Microsystems v. Autodesk holds that to enforce rights under an employee's Invention and Nondisclosure Agreement, the employer must demonstrate that it took reasonable steps to guard its trade secrets.
To enforce its rights under the Invention and Nondisclosure Agreement, VMI must demonstrate that it took reasonable steps to guard its trade secrets.
See Vermont Microsystems, Inc. v. Autodesk, Inc., 88 F.3d 142 (2d Cir. 1996).
Vermont's support for trimming an overbroad restraint rests on a federal court's prediction and a Vermont Supreme Court statement that was not necessary to the judgment, not on a square reformation holding. Draft a trailing invention-assignment clause so it never needs saving: keep the trailing period short, tie it to inventions derived from the employer's confidential information or the employee's actual work, include an own-time carve-out even though no Vermont statute requires one, use present-assignment (hereby assigns) wording so title passes automatically, and add express severability and reform-to-reasonable language so a court inclined to trim has a contractual hook. A clause broad enough to restrain the former employee's ordinary work will be measured against the Restatement test — no greater than the employer's legitimate interest needs — and an overbroad one still carries real total-invalidation risk .
Paper alone does not protect a Vermont employer; conduct around the agreement does. Trade-secret status under Vermont law depends on efforts that are reasonable under the circumstances to maintain secrecy , an employer that never puts employees on explicit or implicit notice of what is confidential can lose its claims outright , and even rights under a signed Invention and Nondisclosure Agreement are enforceable only on proof that the employer took reasonable steps to guard its trade secrets . In an acquisition, do not assume bundled agreements travel with the business: the Vermont Supreme Court has held an employee's restrictive covenant personal to the contracting employer and incapable of effective assignment without the employee's consent or ratification, so a buyer should obtain employee consents or ratifications (or fresh agreements) rather than relying on the asset-purchase paperwork alone .