Ownership of IP developed while employed


I'm a 3d software developer working for a manufacturing company on industrial visualization software programs. In the future, I wish to develop 2d/3d games, mapping applications during my free time.

Given relevant company policies and forms I signed, I wish to know who will own the result IP I develop? (Assuming no work/non-work software program copyright infringement)

In my Employee Handbook:

  1. prohibited from secondary employment that compete, trades, or
    sells/buys with company business.
  2. prohibited from secondary employment that interferes with employee
  3. Must obtain approval for independent consulting/contracting.
  4. Employee can't work on secondary employment project during primary
    employment hours and facilities.

Forms I signed:

  • An acknowledgement form stating that the Employee Handbook isn't
    legally binding or a contract except the section about arbitration.
  • A Confidentiality Agreement preventing disclosure of company trade
    secrets, do not bring third party's secrets into company premise, do
    not pirate, etc..
  • An Ethical Conduct policy that essentially mirrors the four points in
    the Employee Handbook.

Hence there is no explicit form stating that all IP/ideas I developed during the course of employment (day and night) are to belong to the company I work for. While this seems to be in my favor, I was also told it's not.

I am a full time, exempt employee working in California for an out of state company.

Legal Intellectual Property Conflict Of Interest

asked May 15 '12 at 04:01
31 points
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  • This is a legal question that needs to be answered by an attorney, who has reviewed **all** the relevant documents. – Gary E 12 years ago
  • I've been asking people/forums/here to get a feel before an attorney in the future. The feedback I've gotten is better get employer agreement in writing regardless. If so, I'm better off spending money consulting attorney to draft such an agreement, rather than focusing on asking the 'whether if I will own IP' question. – User703047 12 years ago

3 Answers


Since your employer is from out of state, the California moonlighting provisions Dana cited may or may not apply to you. For an empirical case and outcome, see:

From http://lawzilla.com/content/noncompete.shtml

Out-of-State Agreements and Multi-State Employer Strategies

Who wins often depends upon a race to the courthouse. For multi-state
employers it is often a rush to the courthouse to determine if a
non-compete agreement is valid. The employer's strategy is to get an
order outside of California in their favor. The employee or California
prospective employer's strategy is to get an order within California
in their favor. In the face of dueling, and opposing orders, the first
to the courthouse may win because states often must give effect to
orders from other courts.

Microsoft v. Google. In 2005 a federal court agreed to stop a lawsuit
in California to invalidate a noncompete agreement, so that litigation
could proceed in Washington to enforce the noncompete. The ruling
essentially lost the case for Google. A copy of the ruling and more
analysis is in the Members Area. The bottom line, though, is that it
may be important than ever to win the race to the courthouse.

The seminal case discussing the conflict between California law and
multi-state employers is Application Group, Inc. v. Hunter Group, Inc.
(1998) 61 Cal.App.4th 881. In Hunter, a Maryland company with branch
offices in California and other states required its non-California
employees to sign a 1-year non-compete agreement. The agreement also
stated that it was governed by and to be construed by Maryland law. In
Maryland, non-compete agreements are valid. A Maryland employee [who
had never set foot in California] then left and sought to go work for
a competitor in California. When the prospective California employer
sued to invalidate the agreement, the court agreed and ruled that the
non-compete provision was invalid. Section 16600 reflects a "strong
public policy of the State of California" and California has a strong
interest in applying its law and protecting its businesses. (Id., at
900.) California law may thus be applied to non-California employees seeking employment in California. (Id., at 908.)

As a result of this case, the following individuals have the following
strategies to pursue:

California employees with a non-compete agreement signed in California
- no problem, the agreement is invalid unless an exception applies. Non-California individuals with an out-of-state non-compete seeking
employment in California - file suit in California to invalidate the
agreement. California employers seeking to hire an employee with an
out-of-state non-compete agreement - file suit in California to
invalidate the agreement. Out-of-state or multi-state employers with
an out-of-state non-compete agreement - file suit anywhere but
California to validate the agreement.

Disclaimer: This is an opinion and not legal advice nor does it constitute an attorney-client relationship.
answered May 15 '12 at 09:25
Henry The Hengineer
4,316 points


CA Labor Code Section 2870(a) says, generally, that inventions developed entirely on the employee’s own time without using the company’s equipment, supplies, facilities or trade secrets, and that do not relate to or result from the employer's business or anticipated R&D belong to the employee.

If this matter is important enough, you should ask a lawyer to review the facts and applicable documents and render an opinion

answered May 15 '12 at 08:32
Dana Shultz
6,015 points
  • Does California have jurisdiction if the employer is from out of state? – Henry The Hengineer 12 years ago


I completely agree with @Gary E, but there is a 90% chance that if you're looking at something along the same lines, especially if you're using skills the company provides, that they will try to own it. Especially if it's successful. Talk to an attorney with your specific documents, and they can answer your question. Sometimes, depending on the company, you can amend these documents with exclusions. Also watch out for clauses that state that the company owns all works published x months after employment.

answered May 15 '12 at 07:11
Madd Hacker
493 points

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