Invention Assignment Laws in Maryland: Who Owns What You Create

Federal law does not directly govern invention ownership—this is primarily a matter of state contract law, intellectual property law, and trade secret protection. However, the federal Patent Laws (35 U.S.C.) define what can be patented and establish procedures for patent prosecution. The Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836, creates a federal civil cause of action for misappropriation of trade secrets and allows employers to seek injunctions and damages if a trade secret is stolen or improperly disclosed. The DTSA preempts state trade secret law to the extent inconsistent, but most states (including Maryland) have adopted the Uniform Trade Secrets Act, which is substantially similar.

Under the doctrine of "work for hire," federally recognized in patent law, inventions created within the scope of employment using employer resources are presumed to be owned by the employer. However, this presumption can be overcome by clear evidence of a contrary agreement. The federal government does not mandate specific language or requirements for invention assignment agreements—those requirements come from state law. Federal law also does not protect employees from overly broad restrictions on post-employment activities through invention assignment clauses; that protection comes from state contract law and public policy doctrines like the covenant of good faith and fair dealing.

Maryland law on invention assignment is governed primarily by common law contract principles, the Uniform Trade Secrets Act (Md. Code § 11-1201 et seq.), and principles of reasonableness applied to restrictive covenants. Unlike California (which severely restricts invention assignment agreements), Maryland permits employers and employees to enter into binding invention assignment agreements, but Maryland courts enforce them only to the extent they are reasonable, specific, and not contrary to public policy.

Md. Code § 3-505 applies a reasonableness standard to restrictive covenants, including non-compete and non-solicitation clauses. While this statute does not explicitly mention invention assignments, Maryland courts have applied the same reasonableness framework to invention assignment agreements. An invention assignment clause is enforceable if it: (1) is ancillary to a legitimate business interest (trade secrets, confidential business information, customer relationships); (2) is reasonable in geographic scope, time period, and subject matter; and (3) is not harmful to the public interest.

Under Maryland common law, absent any agreement, inventions created during work hours using employer resources are owned by the employer under the work-for-hire doctrine. However, inventions created on the employee's own time using personal resources belong to the employee, even if they relate to the employer's business, unless the employee's job duties included inventing or developing new products. A written agreement can alter this default rule, but the agreement must be specific about which inventions are assigned (e.g., inventions related to the company's business, inventions using company resources, inventions developed on company time) and the agreement must be clear and unambiguous.

The Maryland Uniform Trade Secrets Act (Md. Code § 11-1201 et seq.) protects trade secrets—defined as information that derives economic value from not being generally known and is subject to reasonable efforts to maintain secrecy. Employers seeking to enforce invention assignment clauses often rely on trade secret protection as a justification for the restriction. Under this law, employers must take reasonable measures (technical, administrative, and contractual) to maintain secrecy; if the employer fails to do so, the information loses trade secret status.

Maryland's statute is stronger than federal patent law in that it explicitly protects trade secrets during litigation and provides remedies including injunctive relief, damages, and attorney's fees for misappropriation. However, Maryland does not provide the strong protection against invention assignments that California does; Maryland permits such agreements if reasonable. The state does not distinguish between different types of inventions (software vs. mechanical) in its treatment of assignment agreements.

Employers covered by Maryland law include all private employers, regardless of size. Public sector employees have additional protections under federal civil service law. Invention assignments must be presented to employees before or at the time of hire (or, if presented later, supported by new consideration such as a promotion or raise) to be enforceable.

Maryland recognizes several important exceptions and defenses to invention assignment clauses:

**Reasonableness requirement**: An invention assignment clause that is overly broad—for example, claiming all inventions an employee creates during employment, regardless of whether they relate to the employer's business or were created on personal time—will not be enforced. Maryland courts balance the employer's legitimate business interests against the employee's freedom to pursue their profession and skills.

**Employee prior knowledge exception**: If an employee can demonstrate that they had prior knowledge, skill, or experience related to the invention before joining the employer, courts may carve out an exception for improvements or variations on that prior work.

**Independent development exception**: If an employee develops an invention entirely independently, on personal time, using personal resources, and without using the employer's trade secrets or confidential information, the employer cannot claim ownership even with a broad assignment clause in place. The employee must be able to document the independent development.

**General knowledge exception**: Invention assignment clauses cannot restrict an employee's right to use or apply general skills, knowledge, or experience acquired during employment. Only specific trade secrets and confidential information can be protected.

**Public policy limitation**: Maryland will not enforce an invention assignment clause if it violates public policy, such as by preventing an employee from pursuing a lawful occupation or unduly restricting competition in a way that harms the public.

**Inadequate consideration**: If an invention assignment agreement is presented after hire without new consideration (such as a promotion, raise, or continued employment if the at-will relationship could otherwise be terminated), Maryland courts may refuse to enforce it as lacking consideration, though the burden is on the employee to prove lack of consideration.

**Government employee exception**: Federal and state government employees may have different rights and obligations depending on their agency and whether the invention relates to their official duties.

**Joint invention**: If an invention results from the work of multiple employees (some bound by assignment clauses, some not), ownership may be shared or subject to a license-back right for all co-developers.

**Non-employee contractors**: Independent contractors are generally not subject to invention assignment provisions created for employees, unless there is a separate agreement with the contractor.

**At-will employment caveat**: While Maryland is an at-will employment state, an employer cannot use the threat of termination to coerce an employee into signing an overly broad invention assignment agreement if that agreement would otherwise be unenforceable.

**Step 1: Document the Invention and Circumstances**

Immediately document the creation and development of the invention, including the date of conception, the date of reduction to practice (if applicable), the resources used (personal vs. employer-provided), the location where the work was performed (at home, at the office, elsewhere), and whether the work was performed on company time or personal time. Keep detailed notes, emails, lab notebooks, or development logs that establish when you created the invention and what tools and information you used. Take screenshots of relevant files showing timestamps. Document whether the invention relates to the employer's actual or reasonably foreseeable business—if your job was in accounting and you invented a new manufacturing process, document that the invention falls outside your job responsibilities. Preserve all evidence in a secure location outside your employer's systems.

**Step 2: Review Your Employment Agreements and Internal Policies**

Obtain copies of any employment agreement, offer letter, employee handbook, confidentiality agreement, invention assignment agreement, or non-compete agreement you signed. Read each carefully to understand exactly what scope of inventions the employer claims to own. Note the specific language—does it cover only inventions created during work hours, or all inventions during the term of employment? Does it cover inventions related to the employer's business, or all inventions? Look for an "exception clause" that carves out inventions created on personal time. Check whether the employer provided required statutory disclosures (some states require specific language about employee rights). Consult the employee handbook for any policies about intellectual property, patent filings, or technology development. If the employer required you to sign an invention assignment agreement after hire without additional compensation, document the lack of consideration.

**Step 3: Send a Cease and Desist Letter or Dispute Notice**

Before filing a formal claim, send a written letter to your employer (or their legal department) disputing the employer's claim to ownership of the invention. State factually: (1) the date and nature of the invention; (2) the circumstances of creation (on personal time, using personal resources, outside the scope of your job duties, etc.); (3) why the employer's invention assignment agreement should not apply (it is overly broad, lacks consideration, the invention is outside the employer's business, etc.); (4) your demand that the employer acknowledge your ownership or cease claims to ownership; and (5) your intent to pursue legal remedies if necessary. Send the letter via certified mail with return receipt. Keep a copy. This letter creates a paper trail and may prompt the employer to negotiate.

**Step 4: File a Complaint With the Maryland Attorney General or a State Agency (if applicable)**

If the dispute involves a trade secret misappropriation (the employer has unlawfully disclosed your trade secret or used it without permission), file a complaint with the Maryland Attorney General's Consumer Protection Division or the Maryland Intellectual Property Unit. However, this avenue is more useful if the employer has acted in bad faith or engaged in unfair competition. For most invention ownership disputes, a complaint with a government agency is not practical; instead, proceed to Step 5.

**Step 5: Consult an Intellectual Property or Employment Attorney**

Before filing a lawsuit, consult with an attorney licensed in Maryland who specializes in intellectual property law or employment law. Provide the attorney with all documentation from Steps 1-3. The attorney will evaluate whether your invention falls outside the scope of the employer's assignment agreement, whether the agreement is unenforceable as overly broad, and what remedies are available (declaratory judgment of ownership, monetary damages if the employer has used the invention, injunctive relief to prevent further use, etc.). The attorney can also advise on whether you should file a patent application in your own name or whether that action might trigger litigation with the employer. In Maryland, if the employer is attempting to patent the invention in its own name, you may have grounds to seek correction of inventorship with the U.S. Patent and Trademark Office (USPTO), and an attorney can help with that process.

**Step 6: File a Civil Lawsuit in Maryland State Court or Federal Court**

If negotiation and pre-suit settlement efforts fail, your attorney will file a civil complaint in the appropriate Maryland court (District Court if damages are under $30,000, Circuit Court otherwise, or Federal District Court if federal patent or trade secret law issues are central). The complaint will seek declaratory judgment that you own the invention (or own an undivided interest in the invention), an injunction against the employer's further use or patenting of the invention, damages for breach of contract or misappropriation (if the employer has commercialized the invention), and attorney's fees if applicable. Maryland courts may award pre-judgment interest on damages.

**Step 7: Expect Discovery, Potential Expert Testimony, and Negotiated Settlement**

After filing suit, both parties will engage in discovery—exchanging documents, depositions, and expert reports. The employer's expert may testify about industry standards for invention assignment, the employer's trade secrets and legitimate business interests, and the scope of inventions related to the employer's business. Your expert may testify about the independently developed nature of the invention, the employer's failure to take reasonable security measures, or the lack of trade secret status. Most cases settle during or before trial; many settle after expert reports are exchanged and the legal costs become clear. Settlement agreements typically include confidentiality provisions and may result in co-ownership or a royalty arrangement.