In Applied Materials v. Advanced Micro-Fabrication Equipment Company, the federal district court for the Northern District of California refused to enforce an invention assignment clause that required former employees to assign inventions disclosed within one year of termination of employment if the invention related to work performed by the employee for the employer. In this unfair competition matter brought by Applied Materials ("Applied") against Advanced Micro-Fabrication ("Advanced"), a company based in Shanghai, China, Advanced had hired several Applied employees. Applied alleged that its former employees misappropriated trade secrets by disclosing inventions conceived by them within one year of termination of their employment with Applied. At the commencement of employment with Applied, each had signed an invention-assignment agreement stating that any invention disclosed by the employee within one year after terminating employment with Applied was presumed to be conceived during employment for Applied and "will be assigned to Applied … provided it relates to my work with Applied." Applied sought to enforce the invention assignment provision against the former employees and thereby obtain rights to the patents at issue. Granting Advanced's motion for summary judgment against Applied's attempt to enforce the agreement, the court held that the clause impermissibly required assignment of post-employment inventions (regardless of when conceived or whether based on Applied's confidential information) in violation of California's prohibition on noncompete agreements. If appealed, this decision is likely to be upheld given California's strong public policy against non-compete agreements.
