October 14, 2026
A Confidential Information and Invention Assignment Agreement (CIIAA) is the contract every founder, employee and contractor signs so that what they build for the company belongs to the company and what they learn stays confidential. Without one, the person who creates code or an invention can own it, and investors will find that gap in diligence. Three drafting points decide whether the agreement works: present-assignment language (“hereby assigns”), a schedule of prior inventions, and the state-law carve-out for inventions made on the person’s own time.
Key takeaways
A CIIAA, sometimes called a PIIA (Proprietary Information and Inventions Agreement), does two jobs. It requires the person to keep the company’s confidential information secret and use it only for company work, during and after their time with the company. And it assigns to the company the inventions, code, designs and other work product the person creates that relate to the company’s business or come out of their work for it.
Most also require the person to disclose inventions to the company, help with patent filings, return company property when they leave, and list any prior inventions they’re keeping.
Everyone who creates anything for the company. Founders sign a CIIAA at formation, just like employees, which is standard across the startup industry. Founders also assign what they built before the company existed, usually in their stock purchase agreement. See Who Owns Startup IP? and Restricted Stock Purchase Agreement.
Every employee signs one before their first day, as a condition of employment. Contractors and advisors need the same confidentiality and assignment terms, either in their own agreement or by signing a CIIAA. This matters more for contractors than employees: a contractor owns the copyright in what they create by default, and “work made for hire” language generally doesn’t cover software written by a contractor, so the agreement needs an express assignment. See Startup Contractor Agreement.
Confidential information. Define it broadly: technology, code, product plans, customer and financial information, and anything else non-public. For trade secrets, the obligation should last as long as the information remains a trade secret, not a fixed number of years. See What Are Trade Secrets?
Present assignment. The agreement should say the person “hereby assigns” future inventions to the company. In a 2011 case involving Stanford, the Supreme Court let stand a ruling that “agree to assign” was only a promise to assign later, so a later “hereby assign” to another party won. Templates found online and AI-drafted agreements still get this wrong.
Prior inventions. The person lists what they created before joining and are keeping. If they build a listed invention into the company’s product, the company gets a license to use it. Encourage specific descriptions. “Various software projects” helps no one. Read each new hire’s list before their first day. If anything on it overlaps with what the company is building or plans to build, resolve it now with a license to the company or a narrower description, because investors will read the same lists in diligence. And use one standard form for everyone. Negotiating the agreement person by person leaves you with a patchwork of different obligations that is hard to track and harder to enforce.
Return of property. When the person leaves, they return company property and return or delete company information. That covers company data on personal devices too. The person keeps their own laptop, but must delete company files from it.
Post-employment provisions. Many CIIAAs also include non-solicitation covenants or a duty to tell future employers about the agreement. These are state-law questions. In California, non-solicits of employees and customers are generally void, and non-competes are void in California and restricted in many other states. See Non-Compete Clauses and Non-Solicitation Clauses.
Several states limit invention assignment for employees. California Labor Code section 2870 is the model: an employer can’t require an employee to assign an invention developed entirely on their own time, without the employer’s equipment, supplies, facilities or trade secrets, unless it relates to the employer’s business or anticipated research or results from the employee’s work for the employer. Washington, Delaware, Illinois, Kansas, Minnesota, New Jersey, North Carolina and Utah have similar statutes, and New York added one in September 2023. Nevada’s statute works differently and favors employers on inventions related to the job.
California, Washington, Illinois and Minnesota also require the employer to give employees written notice of the limitation, usually by attaching the statute to the agreement. With remote teams spread across states, the simplest approach is to include a carve-out that tracks the statute and an exhibit with the state notices.
So the old rule of thumb that “inventions made outside work hours belong to the employee” is wrong. The test is whether the invention relates to the company’s business or used its resources, not when it was made. A side project in an unrelated field, built on personal equipment, stays with the employee. A competing feature built on weekends doesn’t.
The federal Defend Trade Secrets Act gives employees, contractors and consultants immunity for disclosing trade secrets in confidence to a government official or a lawyer to report a suspected violation of law, or in a sealed court filing. Any agreement entered into or updated after May 2016 that governs confidential information must include a notice of that immunity, or cross-reference a policy that contains it. Without it, the company can’t recover exemplary damages or attorneys’ fees from that person in a trade secret lawsuit. It’s one paragraph, and many older templates lack it.
Check the founder’s agreement with the prior employer before they build anything. If the startup’s product relates to the prior employer’s business, or the founder worked on it while still employed, the prior employer may have a claim. List the founder’s prior inventions specifically, exclude anything the prior employer owns, and where there is real overlap, get a written release from the prior employer. See I’ve Currently Got a Day Job. Can I Start Working on My Startup as Side Hustle?
List everyone who has ever written code, designed, created content or invented anything for the company, including founders, early friends who helped, contractors and former employees. Match each person to a signed agreement with an assignment clause. Investors’ lawyers do exactly this in diligence.
For each gap, get a confirmatory assignment, which assigns everything the person contributed, effective from when they created it. For current employees, a small payment or other new consideration makes the confirmatory assignment harder to challenge. Former contractors or employees may want something in return. A modest payment or a small option grant is usually enough. Fix these before your next financing, when you have time and leverage.
Yes, but local law controls. For US employees, apply the carve-out and notice rules of the state where they work. For workers outside the US, assignment and moral rights rules vary by country, and some countries require specific language or compensation for employee inventions, so have the agreement checked locally.
For more, see Who Owns Startup IP?, NDA: What It Means for Startups and What Agreements Should Startups Have With Their Employees? Our Confidential Information and Invention Assignment Agreement and Independent Contractor Agreement services cover these documents. If you’d like help, contact us.
