Invention Agreement Template

In plain language: Identifies the company and the inventor (employee, contractor, or founder) as legal parties and states the purpose of the agreement — obtaining assignment of IP as a condition of the working relationship.

Common mistake: Using a trade name instead of the company's full registered legal name. A chain-of-title break at the parties clause can invalidate a patent assignment during due diligence.

In plain language: Specifies which inventions, discoveries, improvements, and developments fall within the scope of the assignment — typically those related to company business, made using company resources, or developed during working hours.

Common mistake: Defining covered inventions so broadly that they extend to unrelated personal projects. Courts in California, Delaware, and several other states will void or limit overbroad definitions under statutory carve-out rules.

In plain language: The operative clause transferring present and future ownership of all covered inventions from the inventor to the company at the moment of creation.

Common mistake: Using 'agrees to assign' instead of 'hereby assigns.' 'Agrees to assign' creates a future obligation that requires a further act — 'hereby assigns' operates as a present automatic transfer effective at the moment of creation, which is critical for patent priority.

In plain language: Establishes that all works created by the inventor within the scope of employment are works made for hire under applicable copyright law, with the company as the statutory author.

Common mistake: Omitting the work-made-for-hire clause and relying solely on the assignment clause. For contractors, copyright does not automatically vest in the company under US law without both a written agreement and a qualifying category — the WMFH clause closes this gap.

In plain language: Creates a schedule where the inventor lists inventions they own or co-own that predate the engagement and are excluded from the assignment — protecting the inventor's pre-existing IP from inadvertent transfer.

Common mistake: Leaving Schedule A blank without requiring the inventor to affirmatively represent there are no prior inventions. A blank schedule creates ambiguity — a competitor or acquirer may dispute whether a pre-existing invention was intentionally excluded or simply forgotten.

In plain language: Requires the inventor to promptly notify the company of any invention that may fall within the scope of the agreement, enabling the company to evaluate patent filings and assert its rights.

Common mistake: Setting no disclosure deadline or making disclosure discretionary. Without a mandatory timeline, inventors may delay or omit disclosures, causing the company to miss patent filing windows or lose prior-art priority.

In plain language: Obligates the inventor to sign patent applications, assignments, and other documents needed to perfect the company's title, both during and after the employment relationship.

Common mistake: No post-termination cooperation clause. If the inventor leaves before a patent application is filed and refuses to sign documents, the company has no mechanism to proceed — leading directly to the need for the power-of-attorney clause.

In plain language: Grants the company a limited, irrevocable power of attorney to execute IP documents on the inventor's behalf if the inventor is unable or unwilling to do so after the relationship ends.

Common mistake: Making the power of attorney revocable or conditional on the inventor's consent. An irrevocable power coupled with an interest — the company's ownership right in the invention — is enforceable in most jurisdictions and prevents a departing inventor from holding patent filings hostage.

In plain language: Acknowledges jurisdiction-specific limits on the scope of the assignment — particularly state statutes that exempt inventions developed entirely on the inventor's own time, without company resources, and unrelated to company business.

Common mistake: Omitting the statutory carve-out entirely in jurisdictions that require it. In California, Delaware, Illinois, Minnesota, North Carolina, and Washington, contracts that fail to include the statutory limitation are voidable and expose the employer to employee claims.

In plain language: Specifies the jurisdiction whose law governs the agreement and how disputes over ownership, scope, or breach are resolved — typically arbitration or courts in the company's home state.

Common mistake: Selecting a governing law with no connection to where the inventor works. Several states — most notably California — apply their own IP statutes regardless of the contract's choice-of-law clause, meaning a Delaware governing-law clause will not override California Labor Code §2870.

An invention agreement is a legally binding contract between a company and an employee, contractor, or co-founder that transfers ownership of any inventions, discoveries, and related intellectual property created during the working relationship to the company. It typically covers patentable inventions, trade secrets, software, and other technical work product. Without one, the individual creator may retain significant rights to technology the company paid to develop.

The terms are closely related but not identical. An invention agreement specifically covers inventions and discoveries — including patentable processes, machines, and compositions — and includes forward-looking obligations like disclosure duties and cooperation on patent filings. An IP assignment agreement is broader and may cover copyrights, trademarks, and trade secrets in addition to inventions. Many companies use a single document that combines both, often called an Employee Proprietary Information and Inventions Agreement (PIIA).

Yes — and contractors arguably require it more urgently. Under US copyright law, works created by independent contractors do not automatically become works made for hire unless the work falls into one of nine statutory categories and there is a written agreement to that effect. For inventions, there is no automatic transfer at all — an explicit written assignment is always required. Engaging a contractor without a signed invention agreement means the contractor likely owns any IP they create, regardless of what you paid them.

In most US jurisdictions, an employer can claim inventions that relate to the company's current or reasonably anticipated business, were developed using company resources or confidential information, or were created during working hours. However, California, Illinois, Minnesota, North Carolina, Washington, and Delaware prohibit employers from claiming inventions developed entirely on the employee's own time, without company resources, and unrelated to company business. These statutory carve-outs cannot be waived by contract.

'Hereby assigns' is a present-tense operative transfer — ownership moves to the company automatically at the moment of creation, with no further act required. 'Agrees to assign' creates a future contractual obligation that the inventor must honor through a separate act of transfer. Federal courts have ruled that 'agrees to assign' language does not by itself transfer patent ownership, leaving companies dependent on a departing inventor's cooperation. Always use 'hereby assigns' in invention agreements.

The agreement should be signed before the employee's or contractor's first day of work. In common-law jurisdictions — including all US states, Canada, the UK, and Australia — contracts signed after work begins require fresh consideration (a new benefit, pay increase, or bonus) to be enforceable. Signing on or after day one without fresh consideration can void the IP assignment and any restrictive covenants included in the same document.

For most standard employment-related invention agreements, notarization is not required for the contract to be binding between the parties. However, the USPTO requires notarized or witnessed patent assignment recordation for certain filings, and some states require notarization for a power-of-attorney clause to be enforceable. Check USPTO requirements and applicable state law before execution if the agreement includes a power-of-attorney provision.

An NDA and an invention agreement address overlapping but distinct risks. An NDA restricts the use and disclosure of confidential information. An invention agreement transfers ownership of IP created using that information. Many companies combine both into a single Proprietary Information and Inventions Agreement (PIIA), but they can be executed as separate documents. Both are typically required — an NDA alone does not give the company ownership of inventions derived from confidential data.

Yes — and it happens frequently. If a co-founder contributed technology before signing an invention agreement, or if the agreement was signed after work began without fresh consideration, the co-founder may retain a partial ownership interest in the underlying IP. Investors conduct IP chain-of-title reviews as part of standard due diligence and will condition funding on clean assignment from all founders. Resolving a co-founder IP dispute after a term sheet is signed is significantly more expensive than executing a proper agreement at formation.