IP Assignment Clause in Employment Contracts: Red Flags
What This Clause Does
This clause says that anything you create during your employment (code, designs, inventions, written work) belongs to the company. That's expected for work you do on company time using company resources. The problem is when it extends to work you do on your own time, on your own equipment, with no connection to the company's business.
Some broad IP assignment clauses have tried to claim ownership of an employee's side projects, apps, or personal writing. Several states (including California, Delaware, and Washington) have laws limiting this overreach, but enforcement can still be costly. If you have any side projects or creative work you want to protect, address it explicitly before signing.
Example Clause Pattern
"Employee hereby assigns to Company all right, title, and interest in and to any Inventions, including but not limited to patents, copyrights, trade secrets, and other intellectual property rights, that Employee creates, conceives, or develops during the term of employment."
What to Watch
- Covers work created outside working hours and without company resources
- No carve-out for pre-existing IP or personal projects
- "Inventions" defined to include anything related to the company's current or future business areas
- Assignment applies retroactively to work created before signing
What to Negotiate
- Request an exhibit listing all pre-existing personal projects, side businesses, and IP you own before signing
- Negotiate a carve-out for work unrelated to the company's current or reasonably anticipated business, done on personal time without company resources
- Ask for a specific definition of "during employment" — broad clauses can claim IP created on personal time
- Confirm the assignment requires actual use of company resources or time, not just a broad "during employment" window
How This Clause Works by Jurisdiction
California Labor Code §2870 prohibits assignment of work created entirely on personal time, without company resources, and unrelated to the employer's current or reasonably anticipated business. This protection is non-waivable — it applies even if the contract says otherwise.
Reviewed May 2026
New York has no equivalent to California's §2870 and is generally employer-friendly on IP assignment. Broad clauses claiming work created outside business hours are routinely enforced, making a written exhibit of excluded personal projects especially important before signing.
Reviewed May 2026
Under Patents Act 1977 §39 and Copyright, Designs and Patents Act 1988 §11(2), inventions and copyrighted works created in the normal course of employment automatically belong to the employer. Work created outside employment duties on personal time is generally excluded.
Reviewed May 2026
Jurisdiction-specific information is general in nature and not legal advice. See disclaimer.
Found in These Contracts
This clause commonly appears in the following contract types:
Frequently Argued Questions
What is an IP assignment clause?
An IP assignment clause transfers ownership of work you create during your employment from you to the employer. This covers inventions, code, designs, written work, and other intellectual property. The clause is standard and generally reasonable for work done on company time using company resources — the legal dispute usually arises when employers claim ownership of work done on personal time.
Can an employer claim my side project under an IP assignment clause?
Potentially, yes. Broadly written IP assignment clauses can extend to personal projects if they relate to the company's current or future business areas, even if you did the work at home on your own computer. Several states — including California, Delaware, Washington, Illinois, and Minnesota — have laws limiting this overreach, but enforcement can still be costly. Document your side projects before you start the job and negotiate a carve-out.
How do I protect my personal projects from an IP assignment clause?
Before signing, create a written exhibit listing all pre-existing projects, code repositories, and IP you own. Negotiate to add language that explicitly excludes work done outside business hours, without company equipment, and unrelated to the company's actual business. Keep your personal projects on separate accounts, devices, and networks throughout your employment.
Negotiation Strategies
Add an exhibit listing pre-existing personal projects explicitly excluded
Negotiate a carve-out for work unrelated to company's business, done on personal time
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