In a recent legislative move, New York has altered the implementation of “Invention Assignment” provisions in employment contracts. The details of this change were outlined on September 15 when the region enacted Labor Law Section 203-f. The law now imposes limitations on the enforceability of invention assignment provisions in employment agreements.
As per the new legislation, employers are no longer granted the automatic right to employee inventions that are created during the employee’s personal time, particularly if these inventions did not involve the utilization of either employers’ resources or their trade secrets. Previously, the employers’ right to intellectual property (IP) developed by an employee was largely undifferentiated, regardless of the circumstances surrounding its production.
The shift inherent in Labor Law Section 203-f refocuses the perspective on invention assignments in employment contracts, which may potentially have a significant impact on tech companies, startups, and organizations that heavily depend on employee innovations. With this legislation, any assignments that fail to conform to the newly established conditions are now deemed as void against the public policy.
- If an invention was created during the employee’s own time, the employer has no automatic rights to it.
- If an invention did not utilize the employer’s resources or their trade secrets, the employer cannot claim IP rights over it.
This move is illustrative of the increasing emphasis on clarifying the boundaries of IP rights within employment contexts. It also signals an evolution in the protection of employee rights, particularly in industries where continuous innovation is encouraged and indeed, often expected. As Labor Law Section 203-f takes effect, corporations, particularly those within the legal circles, are encouraged to familiarize themselves with the stipulations and adjust their approach to employee agreements accordingly.