Proprietary Information and Inventions Agreement Template

In plain language: Defines the scope of confidential information covered by the agreement — what counts as proprietary and what is excluded (e.g., publicly available information).

Common mistake: Defining proprietary information so broadly — 'all information Employee encounters' — that courts find the clause unconscionable and strike it entirely, leaving the company with no protection at all.

In plain language: Prohibits the employee from disclosing or misusing proprietary information during and after employment, and requires them to use at least the same precautions to protect it as they would their own confidential information.

Common mistake: Setting a fixed expiration on the confidentiality duty — e.g., 'for two years after termination' — when trade secret protection under the Defend Trade Secrets Act (US) and equivalent laws is indefinite as long as secrecy is maintained.

In plain language: Transfers to the employer full ownership of all inventions, discoveries, improvements, software, and creative works the employee creates in connection with the company's business — including work done on personal time if it relates to the company's actual or anticipated activities.

Common mistake: Omitting the 'reasonably anticipated business' language, which leaves a gap for employees to claim inventions in adjacent product areas the company had not yet launched but had clearly been developing.

In plain language: Creates a mechanism for employees to list, on a schedule signed at the same time as the PIIA, any inventions they made before employment that they want excluded from the assignment — preventing the company from inadvertently claiming pre-existing work.

Common mistake: Skipping Schedule A entirely. Without it, employees may later claim they assigned personal projects they built before being hired — causing disputes or unwinding patent applications mid-prosecution.

In plain language: States that eligible work product created by the employee within the scope of employment is 'work made for hire' under applicable copyright law, vesting ownership in the employer automatically — and that the assignment clause operates as a backup for work that does not qualify as work made for hire.

Common mistake: Relying solely on the work-made-for-hire doctrine without a backup assignment clause. The doctrine applies only to employees — not contractors — and only to specific categories of works, leaving significant gaps for software and research output.

In plain language: The employee warrants that they have no prior agreements — non-competes, confidentiality obligations, or IP assignments — with former employers or third parties that would restrict their ability to perform their new role.

Common mistake: Not following up when an employee discloses a prior conflicting agreement in writing. Acknowledging the conflict without resolving it — or documenting a legal opinion that the new role is outside the prior restriction — creates significant litigation risk.

In plain language: Prohibits a departing employee from recruiting the company's staff or soliciting its customers for a defined period after separation.

Common mistake: Using an identical non-solicitation clause regardless of the employee's seniority. Courts are more likely to enforce narrow, role-calibrated restrictions — a broad all-employees clause applied to a junior hire is vulnerable to challenge.

In plain language: Requires the employee to return all physical and digital company property upon separation, including devices, credentials, files, and any copies stored on personal accounts or hardware.

Common mistake: Forgetting to include cloud storage and personal email accounts. Employees routinely forward files to personal Gmail or Dropbox accounts before resigning — omitting these from the return obligation leaves the company without a contractual basis to demand deletion.

In plain language: To the extent permitted by applicable law, the employee waives any moral rights they hold in work product created for the company — preventing them from claiming authorship credit or objecting to the company modifying or sublicensing the work.

Common mistake: Omitting the moral rights waiver for employees based in Canada, the EU, or the UK, where moral rights cannot be assigned but can be waived by contract — leaving the company exposed to authorship claims even after a valid IP assignment.

In plain language: Specifies which jurisdiction's law governs interpretation and enforcement, and how disputes will be resolved — typically binding arbitration for claims below a threshold, with carve-outs for injunctive relief.

Common mistake: Choosing a governing law with no connection to where the employee actually works. California, for example, applies its own law regardless of a choice-of-law clause when the employee performs work there — and its law voids many standard PIIA provisions.

A Proprietary Information and Inventions Agreement (PIIA) is a contract between an employer and an employee or contractor that covers two core obligations in a single document: confidentiality and IP assignment. The confidentiality section prohibits the individual from disclosing the company's trade secrets and non-public information. The inventions section transfers ownership of all work product, inventions, and IP created in connection with the company's business to the employer. Together, these protections ensure the company — not individual employees — owns its technology and information assets.

An NDA (non-disclosure agreement) only covers confidentiality — it prevents a party from disclosing information but says nothing about who owns what they create. A PIIA does everything an NDA does, and additionally assigns ownership of inventions and work product to the employer. For employees involved in any product development, research, or creative work, a PIIA is the appropriate document; a standalone NDA leaves IP ownership unresolved.

No law mandates a PIIA by that name, but the protections it provides are practically essential. Without an IP assignment clause, work product created by employees may not automatically belong to the employer in all circumstances — particularly for independent contractors, who are not covered by the work-made-for-hire doctrine for most work types. Investors and acquirers routinely require evidence of signed PIIAs from all current and former employees as a condition of closing a funding round or M&A transaction.

Yes — in fact, it is more important for contractors than for employees. The work-made-for-hire doctrine under US copyright law generally does not apply to independent contractors except for a narrow list of work categories. Without an explicit IP assignment, a contractor may legally own the code, designs, or content they created for your company, even if you paid for it in full. A PIIA or standalone IP assignment agreement resolves this by contractually transferring ownership.

The prior inventions carve-out — typically Schedule A — lets the employee list inventions they made before joining the company that they want excluded from the assignment clause. Without it, the company might inadvertently claim ownership of personal projects or prior employer IP the employee brought with them. From the employer's perspective, the carve-out actually reduces risk: it creates a clear record of what is in and out of the assignment, which is far more defensible during patent prosecution or IP litigation than an ambiguous all-or-nothing clause.

PIIAs typically include non-solicitation restrictions but not full non-compete clauses — the latter are usually placed in the employment contract. Enforceability of non-competes varies sharply by jurisdiction: California, Minnesota, and Oklahoma ban most post-employment non-competes entirely. Even where permitted, courts require that restrictions be reasonable in duration, geography, and scope relative to the employee's actual competitive knowledge. Including an overbroad non-compete in a PIIA can render the entire agreement suspect in jurisdictions that apply a blue-pencil or all-or-nothing severability rule.

If a prospective employee refuses to sign before starting work, the employer must decide whether to rescind the offer or proceed without the agreement. Proceeding without a signed PIIA means the company lacks contractual IP assignment and confidentiality protections — trade secret law may still apply, but its protection is narrower and harder to enforce. For roles involving core product development, it is generally inadvisable to hire someone who will not sign the agreement.

Best practice — and the legally strongest position — is to make the confidentiality obligation survive termination indefinitely, or at least until the information enters the public domain through no act of the employee. Trade secret protection under the Defend Trade Secrets Act (US), the Uniform Trade Secrets Act, and equivalent laws in Canada, the UK, and the EU does not expire as long as the information remains secret and the company takes reasonable steps to protect it. Setting a fixed term — two or three years — voluntarily eliminates protection that statute would otherwise provide.

For straightforward domestic hires in most US states other than California, a high-quality template reviewed by a startup-experienced attorney is sufficient. Legal review becomes essential when hiring in California or other jurisdictions with restrictive covenant bans, onboarding key engineers or researchers whose inventions are central to the business model, addressing a co-founder whose IP was never formally assigned, or preparing for a funding round or M&A transaction where IP chain-of-title will be closely scrutinized. A 1–2 hour attorney review typically costs $300–$800 and is worthwhile for any senior technical hire.

California (Labor Code § 2870), Delaware (Title 19, § 805), Illinois (765 ILCS 1060/2), Minnesota (Minn. Stat. § 181.78), North Carolina (G.S. § 66-57.1), and Washington (RCW 49.44.140) all limit the scope of invention assignments by statute, carving out inventions made entirely on the employee's own time, without company equipment, and unrelated to the company's business. PIIAs used in these states must include express statutory carve-out language that mirrors the applicable statute.