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What is IP assignment in an employment offer?

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Short answer: IP assignment is the clause where you agree to give the employer ownership of any inventions, code, designs, or other intellectual property you create related to your work. Standard scope: work created during employment using company resources. Overbroad scope: anything created during employment regardless of resources used. Eight states (CA, DE, IL, KS, MN, NC, UT, WA) have statutory carve-outs requiring exclusion of inventions made on personal time without company resources. Always disclose pre-existing inventions in a Prior Inventions schedule.

What IP assignment typically covers

A standard IP assignment clause assigns to the employer:

The assignment is automatic at the moment of creation. You don't have to take any further action; the IP is the employer's the moment you create it.

This is appropriate for work-related output. The concern is overreach.

Overbroad IP assignments

Many initial offer letters include IP assignment language that reaches further than necessary:

These broader formulations can swallow up:

The result: you can't pursue side projects, you can't contribute to open source, your creative work in your personal time becomes the employer's property.

State carve-out statutes

Eight states have statutes requiring IP assignment clauses to exclude certain employee inventions:

The carve-out generally requires excluding inventions that meet all of these criteria:

If you're employed in one of these states, the statute applies regardless of what the agreement says. Inventions meeting these criteria are yours, not the employer's.

See What is California Labor Code 2870? for detailed treatment of the most prominent carve-out statute.

How to negotiate IP assignment

When negotiating an offer that includes IP assignment:

Request the statutory carve-out language. If you're in a carve-out state, request the verbatim statutory carve-out be added as an exhibit to the agreement. This is rarely refused; the statute applies anyway, so explicit recognition costs the employer nothing.

Counter language for California (adaptable to other states):

"This IP assignment does not require assignment of any invention that meets the requirements of California Labor Code § 2870, specifically inventions developed entirely on Employee's own time, without using Employer's equipment, supplies, facilities, or trade secret information, and that (i) do not relate to Employer's business or actual or demonstrably anticipated research, or (ii) do not result from work performed by Employee for Employer."

Add a Prior Inventions schedule. Disclose existing inventions you want to exclude from the assignment. This is standard practice and almost always accepted.

Carve out side projects or other employment. If you have known side projects (advisory roles, board seats, hobby businesses), specifically carve them out by listing them in a permitted-activities schedule.

Narrow the scope. Limit assignment to inventions actually related to your role and developed using employer resources, not all inventions during the term.

Address open source contributions. Specifically permit ongoing contributions to open source projects you participate in.

The Prior Inventions schedule

Most IP assignment agreements include a "Prior Inventions" schedule (often Exhibit A or similar). Use it.

List:

If you don't disclose, the assumption is the IP belongs to the employer. Better to over-disclose than under-disclose. The employer doesn't typically care about your prior work; they just don't want surprises.

Why IP assignment matters

For most employees, the IP assignment is rarely tested. You do your job, you create work-related output, the employer owns it. Standard and uncontroversial.

The clause matters in specific situations:

For these situations, getting the IP assignment right is highly valuable. For ordinary employment with no side projects or aspirations, the standard clause is usually fine but the carve-out statutes are still worth invoking.

What to do next

If you want a delivered analysis of your offer including IP assignment language and recommended carve-out language for your state, we deliver one in 24 hours for $199. See Offer Review.

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Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time)

Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice.