Employees Gain Right to Ownership and Usage of Employee Inventions

March 1, 2018

Ty Hyderally, Esq., Francine Foner, Esq., Shamola Bonner

On January 15, 2018, Governor Christie signed into law Bill A492, addressing the intellectual property rights of an employee in his or her inventions.  The new law protects employee rights to ownership and usage of employee inventions developed entirely on the employee’s own time and without using an employer’s resources.  As noted in the statement to the legislation when it was first proposed in 2014, “[t]he general intent of this bill is to preserve an employee’s common law rights to the exclusive ownership and usage of any employee invention totally unrelated to the job functions of the employee and created wholly without using any employer resources.”

Under this new legislation, an employer cannot require an employee to enter into a contract that requires the employee to assign the rights to an invention developed by the employee entirely on the employee’s own time and without using the employer’s resources.  However, this prohibition does not apply to any invention that: (1) relates to the employer’s business or actual or demonstrably anticipated research or development; or (2) results from any work performed by the employee on behalf of the employer.  Prior to this law, an employer was free to acquire the rights of any employee’s invention through the express terms of an employment contract.

Many employees who work for large technology companies are expected to benefit greatly from this new legislation. This legislation will also likely serve to spur an increase in innovations and new ideas, as employees who were previously deterred from developing inventions that which would become the property of their employer can now feel confident that they will reap the benefit from inventions which they develop independent of their employer.

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