November/December 2009 / Features
California Limits Employer’s Rights to Former Employees’ Inventions
A recent federal court decision has limited a California employer’s right to claim ownership of inventions by former employees. As a result, the authors write, companies need to review their employment and proprietary invention agreements.
In Applied Materials, Inc. v. Advanced Micro-Fabrication Equipment, the court voided a standard technology company employment contract provision that claimed the right to inventions created by former employees for up to a year after they left their job. The court found this provision conflicted with the employee’s right to job mobility and that certain previously established exceptions did not apply.
In light of this decision, the authors write, “companies with California employees should analyze their existing employment and proprietary invention assignment agreements (including any form agreements) to ensure that key provisions do not contain language that would render them void…”
With this decision in mind, employer contracts touching on this matter should be drawn narrowly, restricting their purview to inventions arguably reliant on confidential information and trade secrets. Employers, the authors conclude, should “draft invention and confidentiality provisions within the boundaries established by existing law, rather than adopt broader provisions in the hopes that the law someday may change.”
