Employee Inventions in California

In Division 3, Chapter 2, Article 3.5, California’s Labor Code has provisions related to inventions made by an employee. Article 3.5 was added by Chapter 1001 in 1979.

Labor Code Section 2870 specifies that any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer does not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information, with two exceptions:

• When it relates at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

• Results from any work performed by the employee for the employer.

Section 2871 prohibits an employer from requiring a provision made void and unenforceable as specified above as a condition of employment or continued employment. Nothing in this article is to be construed to forbid or restrict the right of an employer to provide in contracts of employment for disclosure, provided that any such disclosures be received in confidence, of all of the employee’s inventions made solely or jointly with others during the term of his or her employment, a review process by the employer to determine such issues as may arise, and for full title to certain patents and inventions to be in the United States, as required by contracts between the employer and the United States or any of its agencies.

Section 2872 provides that, if an employment agreement contains a provision requiring the employee to assign or offer to assign any of his or her rights in any invention to his or her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the above provisions. In any suit or action arising thereunder, the burden of proof is on the employee claiming the benefits of its provisions.