Invention Assignment Laws in Indiana: Who Owns What You Create

Federally, there is no single statute governing invention ownership; instead, the law is governed by contract principles and the Restatement (Second) of Agency. Under federal common law, an employer owns an invention created by an employee if: (1) there is an express written agreement assigning the invention to the employer, (2) the invention was created within the scope of the employee's employment and the employee was hired to invent, or (3) the invention was created using substantial employer resources or confidential information.

The U.S. Patent Office (under 35 U.S.C.) does not mandate ownership allocation; it only requires that inventors be properly named on patents. However, the Defend Trade Secrets Act (18 U.S.C. § 1836) provides federal remedies for misappropriation of trade secrets, including injunctions and damages. An employer can pursue federal trade secret protection if it establishes that the information derives independent economic value from not being generally known and that the employer took reasonable measures to maintain secrecy.

Federally, courts apply a three-part test: (1) was there a contract or agreement assigning the invention, (2) was the invention made within the scope of employment, and (3) were employer resources used. The absence of a written agreement does not eliminate employer rights, but it makes them harder to enforce. Federal law does not require any minimum company size or establish statutory penalties; remedies are limited to contract damages and trade secret injunctions through civil litigation.

Indiana's approach to invention assignment is grounded in the Indiana Uniform Trade Secrets Act (Indiana Code § 34-2-2-1 through § 34-2-2-7) and common law principles. Under Indiana law, an employer's ownership of an employee invention depends on the existence and scope of a written agreement and the circumstances of creation.

Indiana Code § 34-2-2-1 defines a trade secret as information that derives independent economic value from not being generally known and is the subject of reasonable efforts to maintain secrecy. Critically, Indiana does not have a statute that automatically grants employers ownership of all inventions created by employees. Instead, Indiana courts apply a balanced approach: an employer may claim ownership if (1) the parties have executed a valid written agreement assigning inventions to the employer, (2) the invention relates directly to the employer's business or anticipated business, (3) the invention was created using substantial employer time, materials, equipment, or facilities, or (4) the employee was hired specifically to invent.

Under Indiana common law, an employee retains ownership of inventions created entirely on personal time, with personal resources, and having no relation to the employer's business—even if the employee happens to work for a competing company. This protection is stronger than what exists in some states and reflects Indiana's recognition of employee intellectual property rights. Indiana courts have not adopted the broader "shop right" doctrine that exists in some jurisdictions, which would grant employers an automatic non-exclusive license to use employee inventions created during employment.

Indiana's state statute (§ 34-2-2) allows employers to seek injunctions and damages for misappropriation of trade secrets, but only if the employer can demonstrate that it took reasonable measures to keep the information secret and that the employee or third party obtained it through improper means. This is narrower than California's approach and does not automatically protect all inventions; rather, it protects only those that qualify as trade secrets under the statutory definition. An important distinction: Indiana law does not require a written agreement to exist for an employer to have trade secret rights, but the burden of proof is on the employer to demonstrate that the information was kept secret and that misappropriation occurred.

Remedies available under Indiana law include injunctive relief to prevent further misuse, damages for actual harm caused by misappropriation, and in cases of willful and malicious misappropriation, exemplary damages of up to twice the amount of actual damages. Attorneys' fees are not automatically available but may be awarded in exceptional cases. Indiana courts will also consider the reasonableness of the agreement's scope; overly broad or indefinite invention assignment clauses may be unenforceable as a matter of public policy.

Indiana law recognizes several important exceptions and limitations to employer invention assignment rights. First, inventions created by an employee entirely on personal time, using personal resources, and bearing no relation to the employer's business are not owned by the employer absent a written agreement. Indiana courts will scrutinize overly broad assignment agreements as potentially violating public policy, particularly if they restrict an employee's ability to work in their field after employment ends or claim ownership of inventions made years after termination.

Second, under Indiana common law, if an employee was not hired to invent and did not use substantial employer resources, the employer may acquire only a "shop right"—a non-exclusive, royalty-free license to use the invention—rather than full ownership. However, Indiana has not fully embraced this doctrine, and courts require clear evidence of employer resource use.

Third, employee whistle-blowing is protected under Indiana Code § 34-45-1-1 (Indiana Whistleblower Protection Act). An employee cannot be retaliated against for reporting illegal conduct, even if that conduct involves disclosure of information that might otherwise be confidential. This means an employee can disclose even trade secret information if doing so is necessary to report a violation of law without losing legal protections, though the employee may still face a civil misappropriation claim from the employer.

Fourth, invention assignment agreements are subject to the general principles of contract law. If an agreement is unconscionable, lacks consideration, or was signed under duress, it may be unenforceable. Indiana courts will not enforce agreements that are vague about what inventions are covered or that claim ownership of inventions developed by the employee years after leaving the company.

Fifth, union-represented employees may have collective bargaining agreements that supersede or modify individual invention assignment agreements. The terms of the collective agreement control if they conflict with company policy.

Sixth, Indiana courts recognize a distinction between inventions that are improvements to existing company products (more likely to be owned by the employer) and entirely novel inventions in unrelated fields (more likely to be owned by the employee). Finally, the burden of proof is always on the employer to demonstrate that an invention assignment agreement is valid and that the specific invention falls within its scope.

Step 1 — Document Everything: Begin immediately documenting the invention, including when you conceived of it, what resources you used (personal computer, employer equipment, your own materials, company materials, or a mix), when you created it, and whether you worked on it during company time or on your own time. Keep copies of all invention assignment agreements, employment contracts, offer letters, and employee handbooks you received when hired. Save emails, lab notebooks, sketches, prototypes, and any communications about the invention. Note the date you disclosed the invention to your employer or when your employer discovered it. Document whether the invention relates to your employer's current business, anticipated business, or an unrelated field. Take screenshots and create a timeline. This contemporaneous documentation is critical because memory fades and will be essential if you later dispute ownership.

Step 2 — Review Your Employment Agreement and Company Policy: Carefully read any written agreement you signed regarding inventions, including the employment contract, confidentiality agreement, employee handbook, or standalone invention assignment clause. Identify exactly what inventions the agreement claims to cover (e.g., "all inventions relating to the company's business," "all inventions created during employment," or "all inventions, regardless of creation circumstances"). Determine whether the agreement is time-limited (e.g., it expires upon termination of employment) or perpetual. Look for any carve-outs or exceptions (e.g., inventions made on personal time without company resources). If you have not received any written agreement, note that—the absence of a written agreement significantly strengthens your position. If you received a handbook or policy late in your employment or after the invention was created, that timing matters and may suggest the policy cannot apply retroactively. Consult with an employment attorney at this stage if the agreement language is ambiguous or seems to conflict with your understanding of the invention's creation.

Step 3 — Attempt Internal Resolution: Before filing any formal complaint, request a meeting with your direct manager, the HR department, or both to discuss the invention and clarify ownership. Put your position in writing via email: state that you believe you own the invention because you created it on personal time using personal resources (or whatever your specific circumstances are), and request that the company acknowledge your ownership in writing. Be professional and non-confrontational. Keep this email factual and unemotional. If your employer agrees, request a written confirmation signed by an authorized company representative. If your employer disputes ownership or refuses to respond, send a follow-up email restating your position and requesting a response within 10 business days. This creates a paper trail and may resolve the matter without litigation. Many disputes are settled at this stage once the employer realizes the employee has documentation and is serious.

Step 4 — Consult an Indiana Employment Attorney: Before filing any formal legal action or making demands, consult with an employment or intellectual property attorney licensed in Indiana. Provide all documentation you gathered in Step 1 and the company's response from Step 3. The attorney will review your invention assignment agreement (or note its absence), analyze the circumstances of creation, and assess whether you have a strong claim to ownership. An attorney can also advise whether the agreement is enforceable under Indiana law or whether it overreaches and is unenforceable as a matter of public policy. Indiana employment attorneys have access to case law interpreting invention assignment agreements in your industry. The cost of a consultation (typically $200–$500 for 1–2 hours) is well worth the clarity you will gain. If you have a strong case, the attorney may offer to send a demand letter to your employer on your behalf, which sometimes prompts settlement negotiations without litigation.

Step 5 — Determine Whether to File Suit or Negotiate: If you and your attorney agree you have a strong ownership claim, your options are: (A) negotiate a settlement with the employer, (B) file a civil lawsuit in Indiana circuit court for declaratory judgment (requesting a court declaration that you own the invention) and breach of contract (if applicable), or (C) if the invention involves a trade secret your employer misappropriated, file suit under the Indiana Uniform Trade Secrets Act (Indiana Code § 34-2-2-1 et seq.). There is no administrative filing process in Indiana for invention disputes; they are resolved exclusively in civil court. The statute of limitations for breach of contract is six years; for trade secret misappropriation, it is three years from discovery.

Step 6 — Litigation Process and Investigation: If you file suit, the discovery process begins. Both you and the employer exchange documents, including the employment contract, invention assignment agreement, emails, lab records, expense reports, and any communications about the invention. Depositions may be taken (recorded interviews under oath). Expert witnesses may be retained to testify about industry practice and the nature of the invention. The litigation process in Indiana typically takes 1–3 years from filing to trial, depending on the complexity of the case and whether settlement discussions occur. The burden of proof is on the party claiming ownership (usually the employer) to demonstrate a valid agreement and that the invention falls within its scope; if no written agreement exists, your burden is lighter.

Step 7 — Seek Legal Representation for Trial or Settlement: If settlement discussions do not resolve the dispute, your attorney will prepare your case for trial. Indiana courts apply the common law test: does a valid written agreement exist, does the invention fall within its scope, and were employer resources substantially used in creation? Be prepared to testify about your role in creation, the resources you used, the time you spent, and whether the work was on company time or personal time. The court will issue a judgment awarding ownership to you or the employer, and potentially awarding damages if one party breached an agreement or misappropriated a trade secret. An appeal may be available if the judgment is unfavorable, though the appellate standard is narrow.