SF 312 (LSB 2527XS (2) 89)

SENATE FILE 312

BY  KINNEY

A BILL FOR

An Act relating to employment agreements assigning rights to inventions by employees and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  94.1  Definitions.
   For purposes of this chapter, unless the context otherwise requires:
   1.  “Employee” means a natural person who is employed in this state for wages by an employer.
   2.  “Employer” means a person, as defined in chapter 4, who in this state employs for wages a natural person.
   3.  “Invention” means an original concept which may be rendered into an artistic, educational, or technological expression, including works, compositions, designs, machines, manufacturing or engineering techniques, analyses, or processes.
    Sec. 2.  NEW SECTION.  94.2  Limitation on assignment of employee rights to inventions.
   1.  Any provision of an employment agreement which provides that an employee shall assign or offer to assign any of the employee’s rights to an invention to the employer shall not apply to an invention for which equipment, supplies, facilities, or trade secret information of the employer was not used and which was developed entirely on the employee’s own time, unless any of the following apply:
   a.  The invention relates to the business of the employer or to the employer’s actual or demonstrably anticipated research or development.
   b.  The invention results from any work performed by the employee for the employer.
   2.  A provision of an employment agreement in violation of this section entered into between an employer and employee on or after the effective date of this Act is void and unenforceable. An employer shall not require an employee to enter into such an employment agreement as a condition of employment.
    Sec. 3.  NEW SECTION.  94.3  Employee notification.
   If an employment agreement contains a provision requiring the employee to assign any of the employee’s rights to any invention to the employer, the employer shall provide, at the time the agreement is made, a written notification to the employee of the employee’s rights provided by section 94.2, which notification shall include the text of section 94.2.
    Sec. 4.  NEW SECTION.  94.4  Employee disclosure.
   An employee shall disclose to an employer, at the time of employment or thereafter, all inventions developed by the employee, for the purpose of determining employer and employee rights to an invention.
    Sec. 5.  APPLICABILITY.  This Act applies to employment contracts entered into on or after the effective date of this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that any provision of an employment agreement which provides that an employee shall assign or offer to assign any of the employee’s rights to an invention, as defined in the bill, to the employer shall not apply to an invention for which equipment, supplies, facilities, or trade secret information of the employer was not used and which was developed entirely on the employee’s own time, unless specified conditions apply.
   A provision of an employment agreement in violation of the bill is void and unenforceable. The bill prohibits an employer from requiring an employee to enter into such an employment agreement as a condition of employment.
   If an employment agreement contains a provision requiring the employee to assign any of the employee’s rights to any invention to the employer, the bill requires an employer to provide, at the time the agreement is made, a written notification to the employee of the employee’s rights provided under the bill.
   The bill requires an employee to disclose to an employer, at the time of employment or thereafter, all inventions developed by the employee, for the purpose of determining employer and employee rights to an invention.
   The bill applies to employment contracts entered into on or after the effective date of the bill.