HB2911

SECTION 1. The legislature finds that inventors are an important engine of sustainable economic growth. Whether working independently or employed by corporations, the vast majority of inventors do not have the collective representation, institutional strength, or financial resources to exercise and enforce their property rights.

Generally, under the shopright doctrine, if an employee patents an invention that was conceived and perfected during the employee's hours of employment or using the employer's materials or appliances, the employee must give the employer a nonexclusive license to use the invention. As a result, employers may require prospective employees to disclose all inventions created prior to employment to distinguish them from inventions created during employment. However, some employers require prospective employees to relinquish their ownership rights over all inventions created while employed by the employer as a condition of employment. California enacted legislation to invalidate the use of pre‑invention assignments and to prevent employers from assuming ownership of employees' inventions that are created entirely outside the scope of employment.

The purpose of this Act is to invalidate any provision in an employment agreement that requires an employee to assign the employee's rights to an invention to the employer if the employee developed the invention entirely on the employee's own time and with the employee's own materials, with certain exceptions.

SECTION 2. Chapter 378, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Miscellaneous provisions

§378- Employees' inventions. (a) Any provision in an employment agreement that provides that an employee shall assign, or offer to assign, any of the employee's rights in an invention to an employer shall not apply to an invention that the employee developed entirely on the employee's own time without using the employer's equipment, supplies, facilities, or trade secret information except for an invention that:

(1) Relates, at the time of conception or reduction to practice of the invention, to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(2) Results from any work performed by the employee for the employer.

(b) Any provision in an employment agreement that purports to require an employee to assign an invention in violation of subsection (a) shall be void.

(c) No employer shall require a provision made void and unenforceable by subsection (a) or (b) as a condition of employment or continued employment. Nothing in this section shall be construed to restrict the right of an employer to require disclosure of all of an employee's inventions made solely or jointly with others during the term of employment in an employment agreement; provided that any disclosure shall be confidential.

(d) Any employment agreement that contains a provision requiring an employee to assign or offer to assign any of the employee's rights in any invention to the employer shall include written notification to the employee of subsection (a)."

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2911
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII