On September 15, 2023, New York law received a pivotal update that could significantly alter the landscape of invention assignment provisions in employment agreements. Spearheaded by Governor Kathy Hochul, the law took effect immediately after being signed and insinuates a significant change for employers and employees alike. Sheppard Mullin Richter & Hampton LLP has provided a detailed analysis of this revision.
The law encroaches not only on employment agreements but also on related conveyances such as offer letters and Confidentiality, Information and Invention Assignment Agreements (CIIAAs). The implications of this development cannot be overstated as it calls into question the enforceability of a wide range of agreements previously seen as stable and essential in the business world.
Incidentally, New York is not alone in this move towards curbing the utility of invention assignment provisions. It actually joins a mounting list of states with similar laws, signalling a potentially national shift in the manner in which these provisions are approached.
While the specifics of the law and its immediate impact are still being deciphered, it is indisputable that this change will have profound implications on employers, especially those whose businesses heavily rely on the intellectual output of their employees. Entities navigating this changing legal scenario will need to reevaluate their employment agreements and related contracts to adapt to this evolving legal landscape.