In the United States, the contract usually decides. If you signed an invention assignment agreement — and almost every US employment package includes one — your employer likely owns inventions you create within its scope, whether or not you made them at your desk. Without such an agreement, the default is that the inventor owns the patent rights, with two important exceptions that often hand practical control to the employer anyway. Understanding which situation you are in is the first thing to do before you spend a dollar on a patent or a prototype.

The Default Rules When No Agreement Exists

US patent law starts from the inventor, not the employer. Absent an agreement, two doctrines shift things:

  • Hired to invent. If you were employed specifically to solve the problem your invention solves — an R&D engineer assigned to develop exactly that — courts will generally find an implied obligation to assign the resulting invention to the employer.
  • Shop right. If you invented something on your own initiative but used company time, materials, tools, or facilities, the employer typically gets a shop right: a non-exclusive, royalty-free, non-transferable license to use the invention. You keep the patent, but you cannot stop your employer from using it and you cannot collect from them.

Both doctrines are fact-heavy, decided case by case, and expensive to litigate. That uncertainty is precisely why employers use written agreements.

The Agreement Almost Always Controls

The document is usually called an employee invention assignment agreement, a PIIA, or a CIIA, and it is often an exhibit to your offer letter. Typical provisions:

  • A present assignment. Well-drafted agreements say you "hereby assign" future inventions, not that you "agree to assign" them. The distinction has decided real cases, so the wording matters.
  • Scope. Inventions conceived during employment that relate to the employer's business or anticipated research, or that result from work performed for the employer, or that were made using company time, equipment, or confidential information.
  • A duty to disclose inventions to the employer, sometimes including ones you believe are your own.
  • Cooperation. An obligation to sign filings and assist with prosecution even after you leave.
  • Holdover or trailer clauses. A window after employment during which inventions related to your former work are presumed to belong to the employer. Enforceability varies and depends heavily on how narrowly it is drawn.
  • A prior inventions exhibit. A list where you disclose inventions you already own. Leaving it blank is treated as saying you had none — which is why filling it in at hiring is one of the highest-value five minutes of your career.

State Statutes That Limit the Agreement

Several states restrict how far an employer can reach. California is the best-known example: Labor Code section 2870 makes an assignment provision unenforceable as to inventions the employee developed entirely on their own time, without using the employer's equipment, supplies, facilities, or trade secret information, and which neither relate to the employer's business or actual or demonstrably anticipated research and development, nor result from work performed for the employer. Washington, Minnesota, Illinois, Delaware, Kansas, North Carolina, Utah, and New Jersey have statutes in a similar spirit, with meaningful differences in wording, and some require the employer to give written notice of the carve-out.

The practical effect is narrower than people hope. "Entirely on your own time, with none of their equipment, and unrelated to their business" is a demanding test — and "related to the business" is read broadly. A software engineer at a consumer-device company inventing a consumer device is very likely inside the scope even if all the work happened on a weekend.

Practical Guide for an Employee With an Idea

  1. Read your actual agreement, including every exhibit and the handbook it references. Request a copy from HR if you do not have one; you are entitled to it.
  2. Check your state. Where you work changes the answer materially.
  3. Separate your resources completely. Your own computer, your own accounts, your own time, your own network, no company confidential information, no colleagues — and keep dated records showing it.
  4. Do not use the company's information. This is where most claims succeed. Even knowledge gained internally about a customer problem can taint the invention.
  5. Consider disclosure. Some agreements require it. Disclosure can produce a written release or waiver, which is worth far more than a hopeful silence — and worth much less if you ask for it after you have quit.
  6. Get a written release if the employer has no interest. A short signed acknowledgment that they claim no rights is the cleanest possible outcome.
  7. Talk to counsel before filing or resigning, not after. Order of operations matters here.

Note that keeping the invention secret from your employer while building it inside the scope of your agreement does not create ownership; it creates a dispute later, usually at exactly the moment an investor asks about the chain of title. If you are thinking about how much to say and to whom, read how to talk about your invention idea without getting it stolen and when an NDA actually protects you.

From the Employer's Side

Founders hiring their first team should get this right early, because investor and acquirer diligence always checks it:

  • Every employee signs an assignment agreement on or before their first day — not months later.
  • Contractors need express assignment clauses. Work-for-hire language addresses copyright and does not transfer patent rights; without an explicit assignment, your freelance engineer may own the invention in your product. This is the single most common gap we see.
  • Founders assign their own pre-incorporation work to the company. Surprisingly often nobody remembers to do this.
  • Record assignments with the USPTO so the chain of title is documented.
  • Handle overseas and agency staff under the law that governs them, which may not be US law.
  • Respect the state carve-outs and give the required notices where applicable.

The same question comes up when you outsource development rather than hire — see who owns the IP when a company develops your product. And if the invention is best kept unpublished, compare trade secret versus patent protection before filing anything.

If the Rights Are Clearly Yours

Then the normal path applies: search the prior art, decide whether to file, and consider a provisional application to hold a date while you develop. Our step-by-step overview of how to patent an idea covers the sequence, and more background sits in the patents and intellectual property hub.

Projects House is an engineering firm, not a law firm. This article is general education, not legal advice, and employment and patent law vary by state and by contract. Have an attorney review your specific agreement before you act on any of it.

Sitting on an idea you believe is yours and want to understand what it would actually take to build? Contact Projects House for a confidential conversation about the engineering path from idea to product.