New York Employee Assignment of Rights Agreements – What Employers Need to Know
On September 15, 2023, Governor Kathy Hochul signed into law an amendment to New York’s Labor Law, which makes employee invention assignment of rights agreements unenforceable for inventions developed by an employee on the employee’s own time and without the use of employer resources or trade secret information. This new law become effective immediately and is codified at New York Labor Law § 203-f.
Assignment of rights agreements are typically used by employers to protect their intellectual property and ensure the employer’s ownership of intellectual property created by employees in the course of employment. Under the new law, any assignment of rights agreement between an employer and employee would not apply to an invention an employee developed on the employee’s own time and completely using the employee’s own resources. The law includes exceptions for inventions that relate to the employer’s business or result from the employee’s work for the employer. By the plain language of the statute, it applies only to inventions, thus, it is inapplicable to assignments of rights agreements covering things such as copyrights, trademarks, software code, and creative works.
As a practical matter, this new law should not significantly impact the agreements of New York employers because employers typically do not have a legitimate interest in claiming ownership over inventions employees developed on their own time, using their own resources, and involving matters outside the scope of an employee’s work for an employer. Nevertheless, the enactment of the new law presents employers with the opportunity to review their employment agreements to determine if their assignment of rights agreements are overbroad or, if the employer is not utilizing assignment of rights agreements, to determine whether it would be in the business’s interest to do so to protect its intellectual property.
If you have questions about your business’s employment agreements, please schedule a complimentary consultation with us through our online scheduling system.
Information contained in this blog is provided for informational purposes and does not constitute legal advice or opinion. You should consult with an attorney regarding the specifics of your matter or legal issue.