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Invention Assignment Agreements in Michigan: Who Really Owns Your Ideas?
Most people sign their employment paperwork without giving it a second thought. There's a stack of forms, an offer letter, maybe a handbook acknowledgment, and somewhere in that pile is language about who owns anything you create while working there. It sounds like boilerplate. For a lot of employees, especially engineers, designers, developers, and marketers, it's anything but.
An invention assignment agreement can determine whether an idea you come up with on your own time still belongs to your employer. Michigan law puts some real limits on how far these agreements can reach, but plenty of contracts are written as if those limits don't exist. Understanding where the line actually falls can save you a serious headache down the road, whether you're negotiating a new job offer or wondering about a side project you're already working on.
What Is an Invention Assignment Agreement
An invention assignment agreement is a contract clause, or sometimes a standalone document, where an employee agrees to give the employer ownership of certain inventions, designs, or ideas. The purpose is straightforward from the employer's side. If they're paying you to build something, they want to make sure they own what gets built.
The problem is that many of these agreements are written broadly enough to sweep in far more than that.
Common Language Employers Use
Most agreements use some version of the phrase "any invention conceived during employment." That kind of language can be read to include almost anything you think of while you happen to be employed there, regardless of when or where the idea actually took shape. Other common phrases include:
- "Any work product created using company resources, time, or equipment"
- "Any invention related to the employer's actual or anticipated business"
- "Any improvement, discovery, or idea developed during the term of employment"
Where These Clauses Typically Show Up
Invention assignment language doesn't always appear in one obvious place. It can be buried in several different documents, sometimes more than one at the same company. Common locations include:
- Offer letters and initial employment contracts
- Employee handbooks or onboarding packets
- Standalone intellectual property or confidentiality agreements
- Separation or severance agreements, reaffirming earlier terms
What These Agreements Typically Cover
Inventions Made During Work Hours or Using Company Resources
This is the most defensible part of an invention assignment agreement, and the part least likely to be challenged. If you build something using your employer's software, equipment, lab space, or paid work hours, the employer generally has a strong claim to it. That's true even in states with strong employee protections.
Ideas Related to the Employer's Business
This is where things start to get murkier. Many agreements try to claim ownership of any invention "related to" the employer's business, even if it was developed entirely on personal time with personal resources. A software engineer who builds a side app in a similar space as their employer could get caught by this kind of clause, even without using a single company resource.
Patents, Trade Secrets, Designs, and Other Intellectual Property
Invention assignment agreements typically aren't limited to formal inventions or patents. They often extend to:
- Trade secrets and proprietary processes
- Product designs and prototypes
- Software code and technical documentation
- Marketing concepts, branding elements, or creative work product
Michigan's Limits on Invention Assignment Agreements
Michigan's Employee Invention Protection Statute
Michigan law places specific limits on how far an employer can reach with an invention assignment agreement. Under Michigan's employee invention protection statute (MCL 600.2960), an agreement cannot require an employee to assign an invention that was developed entirely on the employee's own time, without using the employer's equipment, supplies, facilities, or trade secret information.
There's an important carve out to that carve out. If the invention relates to the employer's business, or to the employer's actual or demonstrably anticipated research and development, the exception doesn't apply. This is the piece that trips up a lot of employees who assume anything done "on their own time" is automatically theirs to keep.
The Written Notice Requirement
Michigan law requires more than just a fair clause. It requires employers to actually notify employees, in writing, of the specific carve out described above at the time the agreement is signed. If an employer skips this notice requirement, the enforceability of the broader assignment provisions can be called into question.
What Happens When an Agreement Doesn't Comply
An agreement that fails to comply with Michigan's statutory notice requirement doesn't necessarily become void in its entirety. Courts look closely at whether the specific provision at issue falls within the statute's protected category, and whether proper notice was given. The outcome depends heavily on the specific facts, the specific language, and how the invention was actually developed.
Who Owns What: A Realistic Breakdown
Inventions Clearly Tied to Your Job Duties
If you were hired to design software, and you designed software using your employer's systems during paid hours, that invention belongs to your employer. This category rarely generates disputes because the facts are usually clean. The closer an invention sits to your actual job description, the stronger the employer's claim.
Personal Projects Unrelated to Your Work
If you build something entirely unrelated to your employer's business, on your own time, using your own equipment, Michigan law is generally on your side. A marketing coordinator who builds a woodworking business on weekends, using personal tools and personal money, is a fairly clear example. These situations still benefit from a careful read of the actual contract language, since some agreements try to reach further than the law allows.
The Gray Area: Side Projects Near Your Employer's Industry
This is where most real disputes live. Consider a software developer employed by a logistics company who starts building a route optimization app on nights and weekends. No company equipment was used, but the subject matter overlaps closely with the employer's business. Whether that falls under Michigan's protection or the employer's carve out depends on:
- How closely the side project overlaps with the employer's actual business lines
- Whether the employer can show the project relates to research and development it was actually pursuing or planning
- Whether any company resources, even minor ones like a work laptop, touched the project at any point
Red Flags to Watch For Before You Sign
Overly Broad Language With No Limits
Some agreements are written with almost no boundaries around time, location, or subject matter. Watch for phrases that claim ownership of "any invention conceived during the term of employment," without qualifying language tying that invention to company resources or company business. That kind of open ended language is often broader than what Michigan law actually permits.
Missing Statutory Carve Outs
Michigan requires written notice of the statutory exception for inventions developed entirely on personal time with personal resources. If an agreement doesn't include this language at all, that's a meaningful gap. It could affect whether the broader provisions are enforceable down the line.
Clauses Claiming Pre-Employment Ideas
Some agreements try to claim ownership of ideas or inventions that existed before you were ever hired. This is a significant overreach, and it's worth flagging before you sign anything. A few specific things to check for:
- Language that fails to explicitly exclude inventions predating your start date
- No attachment or exhibit listing your prior inventions or ongoing personal projects
- Vague definitions of "invention" that could be stretched to cover almost anything
Where This Leaves You
Contracts have a way of feeling permanent the moment you sign them, but Michigan law doesn't give employers unlimited reach over your ideas. There's a real, statutory line between what belongs to your employer and what stays yours, even if the paperwork in front of you doesn't spell that line out clearly. Knowing that distinction exists is often the difference between quietly losing something you built and actually protecting it.
Whether you're staring down a new offer letter, sorting through an old handbook you signed years ago, or wondering if a side project crosses into risky territory, the details of your specific situation matter more than any general rule. Scott Batey has spent his career focused entirely on Michigan employment law, and he can help you make sense of what your agreement actually says versus what it's allowed to say.
Talk to Scott Before You Sign, or Before You Assume the Worst
If you're holding a contract with invention assignment language you don't fully understand, or you think an employer is overreaching on something you built, don't guess your way through it. A short conversation can clarify exactly where you stand and what your options are.
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This content is for general informational purposes only and does not constitute legal advice. Contact Batey Law for guidance specific to your situation.