Client Alert

New York Enacts Law Prohibiting Employment Agreement Provisions That Assign Employee Inventions

New York recently enacted legislation providing that provisions in employment agreements that require an employee to assign certain inventions that are made on the employee’s own time and which do not use the employer’s equipment, supplies, facilities, or trade secret information are unenforceable.

Specifically, the legislation amends the New York Labor Law by adding a new section 203-f which specifies that an invention developed entirely on an employee’s own time, without using an employer’s property or trade secrets, belongs to the employee. Section 203-f of the Labor Law bans the enforcement of invention assignment agreements that entitle employers to intellectual property developed by employees entirely on their own time without using their employer’s equipment, supplies, facilities, or trade secret information; unless the invention 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 if the invention results from any work performed by the employee for the employer.

Section 203-f further provides that a requirement in an employment agreement that employees assign, or offer to assign, any of their rights in an invention developed on their own time to an employer is against New York State public policy and will be deemed unenforceable. The new law became effective immediately upon signing.

It is advisable that New York employers review their employment agreements to ensure compliance with the new law. Should you have any questions regarding the new legislation or how it affects your business, please contact Ali Law Group.

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