Invention Assignment Laws in Michigan: Who Owns What You Create

Federal law does not comprehensively govern invention ownership; instead, it relies on contract law, patent law (35 U.S.C.), and state-specific statutes. The Defend Trade Secrets Act (18 U.S.C. § 1836) protects trade secrets but does not automatically assign ownership of inventions to employers. Under federal patent law (35 U.S.C. § 101), inventions are generally owned by their creator unless assigned by written agreement. The federal default is that inventions belong to the employee-inventor, and employers must establish ownership through contract or by proving the invention was developed as part of the employee's job duties using employer resources.

The DTSA provides a federal cause of action for misappropriation of trade secrets but does not override state invention assignment statutes. Federal courts apply state law when determining whether an invention assignment agreement is valid and enforceable. The Uniform Trade Secrets Act (adopted in most states) similarly defers to state law for ownership questions. Therefore, federal law creates a baseline default of employee ownership, but allows state law to modify that rule through statute or enforceable written agreements.

Michigan MCL 445.762 provides statutory protection for employee inventors that is significantly stronger than the federal baseline. Under this statute, an employer can claim ownership of an employee's invention only if one of three conditions is met: (1) the invention was developed entirely using the employer's equipment, supplies, facilities, or trade secret information; (2) the invention was developed on the employer's time; or (3) the invention relates at the time of conception to the employer's business or reasonably anticipated research or development.

Crucially, MCL 445.762(2) prohibits assignment of inventions created entirely on the employee's own time, using the employee's own equipment and materials, unless the invention either relates to the employer's existing or demonstrably anticipated business or was developed using the employer's trade secrets. This is stricter than many other states and protects employees significantly. An invention assignment agreement that purports to assign inventions created wholly outside work is void and unenforceable in Michigan.

Michigan also requires that any invention assignment agreement be in writing and signed by the employee. Oral agreements to assign inventions are not enforceable. Additionally, MCL 445.762(3) states that an employee retains ownership rights to any invention for which no assignment agreement exists at the time of invention, unless the invention falls within one of the three categories above (use of employer resources, employer time, or direct relation to employer's business).

Michigan law applies to all employers operating in the state, regardless of size. There is no employee threshold; the statute protects even single employees. Unlike federal patent law, Michigan's statute creates a statutory default in favor of the employee and requires clear, written evidence of assignment. Remedies under Michigan law include breach of contract claims, conversion claims, and claims for unjust enrichment if an employer improperly claims ownership.

Several important exceptions and limitations exist under Michigan invention assignment law. First, MCL 445.762 does not apply to inventions that are patentable under federal law created by independent contractors or consultants who are not employees; however, the distinction between employee and contractor status is fact-based and heavily disputed in litigation.

Second, an employee's invention assignment agreement can be enforced if it was made in writing and signed by the employee at or before the time of employment, even if the invention is not directly related to the employer's business, provided the invention was developed using the employer's time, materials, or facilities. However, an agreement to assign all future inventions for the duration of employment is disfavored and may be struck down as unreasonably broad.

Third, trade secret law under Michigan's Uniform Trade Secrets Act (MCL 440.1101 et seq.) operates separately from invention assignment law. An employer can protect trade secret information through non-disclosure agreements and may prevent an employee from using or disclosing trade secrets even if the employee owns an invention incorporating that secret. This is a notable exception: ownership of the invention itself and control of the trade secret information are separate issues.

Fourth, if an employee developed an invention while employed but after leaving the company (on personal time, using personal resources), Michigan law presumes the employee owns the invention unless the employer can prove it is directly related to the employer's reasonably anticipated business and the employee developed it using the employer's trade secrets.

Fifth, collective bargaining agreements may carve out different rules for union employees. Some union contracts contain invention assignment provisions that modify or supersede statutory defaults; however, any such agreement must still comply with MCL 445.762's core protections.

Finally, MCL 445.762(1) does not prevent an employer from claiming ownership of an invention if the employee was hired specifically to invent or develop new products in that field; in that case, inventions developed as part of the employee's job duties are owned by the employer even without a written agreement, provided they relate to the employer's business.

Step 1: Document Everything Thoroughly. From the moment you create the invention, keep detailed records including: the date of conception, a description of the invention, all research notes, sketches, code, or prototypes, dates and times you worked on it, whether you used employer equipment or your own resources, whether you worked on it during business hours or personal time, and any witnesses to your work. Store copies in a personal email account or cloud storage outside employer control. If your employer claims ownership, these records will be your proof of the circumstances under which the invention was created.

Step 2: Review Written Agreements and Communicate Internally. Obtain a copy of your employment agreement, employee handbook, and any invention assignment agreement you signed. Read MCL 445.762 carefully to determine whether your invention falls under the employer's permitted ownership categories. If you believe the invention belongs to you, send a written email to your manager or HR department documenting: the date of invention, that it was created on your personal time using personal resources, and a statement that you do not believe the employer has a valid claim. Keep a copy of this email. Request written confirmation of ownership status. Do not transfer files, prototypes, or documentation to the employer if you dispute ownership.

Step 3: File with the Michigan Attorney General or Consult an Attorney. Michigan does not have a dedicated invention assignment enforcement agency. If your employer has misappropriated your invention or breached a written assignment agreement, you must pursue a civil remedy. Contact the Michigan Attorney General's Office (Consumer Protection Division) at 517-373-1140 or visit michigan.gov/ag to report trade secret misappropriation. However, the primary remedy is a lawsuit. Consult a Michigan employment attorney or intellectual property attorney licensed in Michigan within 60 days of discovering the misappropriation or breach. Many IP attorneys offer free initial consultations. The statute of limitations for breach of contract in Michigan is 6 years from the date of breach.

Step 4: Understand the Investigation and Litigation Process. Michigan courts will examine: (1) the text of any written assignment agreement, (2) your employment contract and job description, (3) the factual circumstances of the invention's creation (time, place, resources used), (4) testimony or evidence regarding whether the invention relates to the employer's business or anticipated business, and (5) whether the employer provided trade secret information you used. Unlike administrative agency investigations, a civil lawsuit requires you to file a complaint in Michigan state court or federal court (if diversity jurisdiction exists). Discovery typically takes 6-12 months. Your attorney will request all relevant documents from the employer, take depositions, and may hire expert witnesses.

Step 5: Consider Settlement and Remedies. Before trial, attempt negotiation or mediation. Michigan law provides remedies including: a declaration of ownership, damages for unjust enrichment, damages for conversion of the invention, disgorgement of profits the employer earned from the invention, attorney's fees and costs if you prevail and the case is frivolous, and injunctive relief preventing the employer from using or commercializing the invention. If the invention has already been patented in the employer's name, you may seek correction of inventorship or cancellation of the patent through the U.S. Patent Office or federal court. Consult your attorney about whether a settlement preserves your ownership rights while allowing a licensing arrangement with the employer.