Employee–Employer Intellectual Property Disputes: Understanding Ownership And Recent Legal Developments (2025 Update)

In fields that are tech-heavy, we continue to see a plethora of fights over intellectual property between employees and employers. This is especially true when employees change jobs, relocate to a new country, or transition to a startup. Employers use assignment agreements, confidentiality clauses, and research and development (R&D) processes to protect their intellectual property (IP). Employees, on the other hand, often want to know exactly what they own, especially when it comes to inventions made during or shortly after their employment.

In my previous article on employee–employer IP disputes, I discussed the basic rules that govern ownership of inventions, trade secrets, trademarks, and work that can be copyrighted. This 2025 update includes new case law and changes to California law that have a big impact on how courts and businesses decide who owns an invention and how to compete.

Understanding the Types of IP at Issue in Employment

Intellectual property created during an employment relationship usually falls into several categories, each carrying its own legal framework.

Patents and Inventions.

Patents are often the most significant source of dispute, especially when an engineer or developer continues working in a similar field after leaving a company. More background on patent ownership and strategy can be found in:

• Patent Counseling & Prosecution
• Patent Litigation

Trade Secrets and Confidential Information.

Employees must avoid using or taking confidential materials such as source code, internal documentation, formulas, or customer data. This is often where disputes escalate into litigation. See:

• Trade Secret Litigation

Trademarks and Branding.

Brand assets created within employment—names, logos, slogans—may also belong to the employer.

• Trademark Practice

Recent Legal Developments Affecting Ownership and Assignment

A notable 2025 federal case emphasized that the factual timeline of invention, when and how an idea was conceived, can be far more important than broad assignment language. The court upheld a clause that said the inventor could still be sued for infringement even though he had already left his job. This was because he convinced the jury that he came up with the idea after he left his job. Importantly, the court did not require extensive corroborating evidence beyond the inventor's own testimony.

This decision strengthens a trend:

• Broad assignment clauses are not automatically determinative.
• Courts are emphasizing real-world invention timing instead of relying solely on contract wording.
• Employees who keep detailed records of conception and development may have stronger claims to ownership than they did before.

Federal Circuit Decisions Highlight the Importance of Assignment Clarity

Two 2025 cases: Rasmussen Instruments v. DePuy Synthes Products and CAUSAM Enterprises v. ITC, underscore the importance of precise assignment language. In Rasmussen, ambiguous language undermined standing to enforce patents, so much so that the Federal Circuit vacated a $20 million damage award for Plaintiff's lack of standing. In CAUSAM, the court focused on whether ownership had been clearly established for administrative-law purposes.

The takeaway is simple:

• Employers must keep their chains of title clean and consistent.
• Workers should go over what they signed and what they still have to do.
• Courts will not fill in missing information in contracts. Employers must keep their chains of title clean and consistent.
• Workers should go over what they signed and what they still have to do.
• Courts will not fill in missing information in contracts.

California's Legislative Change: AB 692 and Employee Mobility

California continues to broaden protections for employees transitioning between jobs. In 2025, the state enacted AB 692, banning the majority of "stay-or-pay" clauses that penalize employees for leaving through repayment obligations. The law doesn't directly target invention ownership or patent assignment, but it does strengthen California's long-standing policy that encourages employees to move around and limits restrictions after they leave their jobs.

This climate that is friendly to mobility can have an indirect effect on how courts look at IP-related provisions that are too strict, especially those that try to go beyond the time of employment. The statutory language is available here.

Practical Guidance for Employees, Startups, and Employers

Because the legal environment is always changing, it's more important than ever for both employees and employers to keep records, check them, and make sure they know where the creative work came from.

Employees should:

• Keep clear, date-stamped records of independent invention.
• Don't use tools, data, or private information that your employer owns.
• Before changing jobs, read over your assignment and confidentiality agreements.

Startups hiring former employees should:

• Be careful with IP onboarding to avoid taking on disputes.
• Early on, check on past assignments and possible conflicts.
• When it's appropriate, keep new hires away from technologies that are similar.

Employers should:

• Update assignment agreements to ensure enforceability.
• Maintain consistent invention-disclosure and recordkeeping practices.
• Understand that courts may scrutinize factual timelines more than boilerplate wording.

Conclusion: A More Evidence-Driven Landscape

The changes from 2024 to 2025 show that IP disputes between employees and employers are becoming more focused on facts and evidence. Courts are more and more willing to look beyond the language of a contract to figure out when an invention was thought of and whether the employee used private information. California is still pushing for more.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.