What Is a PIIA? The IP Assignment Agreement Every Startup Employee Signs
What a PIIA covers and who needs to sign one
by
Teddy Ellison
Fundraising & Equity
Summary
A PIIA, formally a proprietary information and inventions assignment agreement (PIIAA), is the contract a startup's employees sign to assign their work to the company and keep its information confidential. A company automatically owns the copyright in an employee's on-the-job work but not the patents on their inventions, so without a PIIA it doesn't own the inventions it paid to create.
A Proprietary Information and Inventions Assignment Agreement, or PIIAA (commonly shortened to PIIA) is the document that transfers ownership of an employee's work to the company. Some firms also call it a CIIA or an IP assignment agreement. If an employee doesn’t sign this document then they own anything they invent, even though the company hired and paid them to build it.
A PIIA costs the company nothing to put in front of a new hire, but without it the company may end up paying twice for the same work: once in salary and again to buy the rights back. So before you onboard new hires, it's important to understand what a PIIA's wording must cover and who should sign it.
What does a PIIA cover?
A PIIA's main job is the invention assignment: the clause that assigns an employee's work to the company. It also carries a confidentiality promise over source code, customer lists, and roadmaps.
The assignment has to be worded in the present tense, with the employee "hereby assigning" their work. The rights then pass to the company as the work is created. An employee who only agrees to assign later keeps the rights until they sign them over. In Stanford v. Roche, a researcher promised to assign his inventions to one party, then signed them over to another, and the second company ended up with the rights.
Anything an employee creates as part of the job is a work made for hire, so the company owns that copyright from the start, without a separate signature. Patents don't work that way. The inventor generally keeps the patent until they sign it over, and an employee does that by signing a PIIA.
Who needs to sign a PIIA?
Every employee should sign a PIIA before they start, and their offer letter should make signing it a condition of the job.
Founders should sign a PIIA too, since they create much of the early product and have to assign it like any employee. They also own the code they wrote before the company existed, which incorporating doesn't transfer. They sign a separate assignment for it at formation, when they get their founder stock in return.
A contractor isn't an employee, so their work doesn't become the company's automatically. They keep what they build unless a separate assignment transfers it. A work-for-hire clause won’t transfer it either, since that label can't cover custom code on its own. To own what a contractor builds, have them sign their own contractor agreement that carries the same assignment and confidentiality clauses a PIIA does, worded in the present tense. Be sure to get this signed before the work starts.
For how these documents fit across founders, employees, and contractors, and the full chain of title behind a financing or sale, see our writeup on who owns your startup's IP.
When do you need a lawyer for a PIIA?
You don't need a lawyer for a standard hire. Templates from Clerky or Carta already use present-tense assignment language, so the wording rarely causes a problem. You just have to make sure everyone signs on before they begin, yourself first.
Legal counsel is most helpful when a piece of work has more than one possible owner, because a PIIA assigns only what the signer owns. Sometimes the competing owner is an outside vendor, like a development agency that keeps the code it reused from earlier projects.
More often, the competing owner is someone you hire(d). Some come from a competitor and may owe their inventions to that old employer under the contract they signed. Others come out of a university with an IP policy that can claim what they built with the school’s resources or funding. Your PIIA can’t reach any of these, because the people signing never owned the rights to give.
A lawyer finds those claims before a buyer does and gets the wording right for the hires a templated PIIA was never built for. If a former contributor resurfaces to claim the work, the same lawyer defends you. Serotonin Legal maps a founder’s chain of title and closes these gaps before anyone else goes looking.
For more on what legal decisions founders can handle on their own and which call for counsel, our FAQ covers the questions tech founders ask us most.
Reach out to schedule a free consultation.
Serotonin Legal advises technology founders on corporate, regulatory, and transactional matters at the intersection of AI, blockchain, and fintech. This guide is for general informational purposes and does not constitute legal advice. No attorney-client relationship is formed by reading this material.
FAQs
What is the difference between a PIIA, PIIAA, CIIA, and an IP assignment agreement?
A PIIA, a PIIAA, a CIIA, and an IP assignment agreement are four names for one document. It assigns an employee's work to the company and protects its confidential information. PIIAA, short for proprietary information and inventions assignment agreement, is the correct full name, and PIIA is the common shorthand. Whatever you call it, check that it assigns IP in the present tense.
Does a PIIA cover inventions you make on your own time?
It shouldn't, if the invention has no tie to the company. A PIIA reaches your work for the company and anything you build with its time, equipment, or confidential information. In California, Labor Code §2870 makes an assignment unenforceable against an invention you develop entirely on your own time, with your own tools, that neither relates to the company's business nor grows out of your work there. Other states leave more of it to the wording, so read the invention clause before you sign.
Is a PIIA the same as an NDA?
No. An NDA only covers confidentiality, keeping the other side from disclosing or misusing your information. A PIIA includes that confidentiality promise. It also transfers the employee's inventions and code to the company, which an NDA never does. A startup needs that transfer, so a bare NDA with an employee leaves the startup's ownership unsecured.
Does a PIIA have to say "hereby assign"?
It should. "Hereby assigns" transfers the work as the employee creates it, so the company never has to go back for a second signature. "Agrees to assign" only promises a transfer later. If the employee then signs a present "hereby assign" to someone else, that later assignment can beat your earlier promise, because a promise alone doesn't move the rights. Present-tense wording closes that risk.
What happens if a founder or employee never signed a PIIA?
The company may not own what that person created. For code, it can fall back on the work-made-for-hire rule, which covers an employee's on-the-job copyright but not patents. For an invention, the employee can hold the patent personally until they assign it. When the company raises a round or sells, investor or buyer's counsel checks that every founder and employee signed. A missing signature can stall the deal until the company tracks that person down and gets them to sign.
Curious to learn more about Serotonin Legal? —
Get in Touch
What Is a PIIA? The IP Assignment Agreement Every Startup Employee Signs
What a PIIA covers and who needs to sign one
by
Teddy Ellison
Fundraising & Equity
Summary
A PIIA, formally a proprietary information and inventions assignment agreement (PIIAA), is the contract a startup's employees sign to assign their work to the company and keep its information confidential. A company automatically owns the copyright in an employee's on-the-job work but not the patents on their inventions, so without a PIIA it doesn't own the inventions it paid to create.
A Proprietary Information and Inventions Assignment Agreement, or PIIAA (commonly shortened to PIIA) is the document that transfers ownership of an employee's work to the company. Some firms also call it a CIIA or an IP assignment agreement. If an employee doesn’t sign this document then they own anything they invent, even though the company hired and paid them to build it.
A PIIA costs the company nothing to put in front of a new hire, but without it the company may end up paying twice for the same work: once in salary and again to buy the rights back. So before you onboard new hires, it's important to understand what a PIIA's wording must cover and who should sign it.
What does a PIIA cover?
A PIIA's main job is the invention assignment: the clause that assigns an employee's work to the company. It also carries a confidentiality promise over source code, customer lists, and roadmaps.
The assignment has to be worded in the present tense, with the employee "hereby assigning" their work. The rights then pass to the company as the work is created. An employee who only agrees to assign later keeps the rights until they sign them over. In Stanford v. Roche, a researcher promised to assign his inventions to one party, then signed them over to another, and the second company ended up with the rights.
Anything an employee creates as part of the job is a work made for hire, so the company owns that copyright from the start, without a separate signature. Patents don't work that way. The inventor generally keeps the patent until they sign it over, and an employee does that by signing a PIIA.
Who needs to sign a PIIA?
Every employee should sign a PIIA before they start, and their offer letter should make signing it a condition of the job.
Founders should sign a PIIA too, since they create much of the early product and have to assign it like any employee. They also own the code they wrote before the company existed, which incorporating doesn't transfer. They sign a separate assignment for it at formation, when they get their founder stock in return.
A contractor isn't an employee, so their work doesn't become the company's automatically. They keep what they build unless a separate assignment transfers it. A work-for-hire clause won’t transfer it either, since that label can't cover custom code on its own. To own what a contractor builds, have them sign their own contractor agreement that carries the same assignment and confidentiality clauses a PIIA does, worded in the present tense. Be sure to get this signed before the work starts.
For how these documents fit across founders, employees, and contractors, and the full chain of title behind a financing or sale, see our writeup on who owns your startup's IP.
When do you need a lawyer for a PIIA?
You don't need a lawyer for a standard hire. Templates from Clerky or Carta already use present-tense assignment language, so the wording rarely causes a problem. You just have to make sure everyone signs on before they begin, yourself first.
Legal counsel is most helpful when a piece of work has more than one possible owner, because a PIIA assigns only what the signer owns. Sometimes the competing owner is an outside vendor, like a development agency that keeps the code it reused from earlier projects.
More often, the competing owner is someone you hire(d). Some come from a competitor and may owe their inventions to that old employer under the contract they signed. Others come out of a university with an IP policy that can claim what they built with the school’s resources or funding. Your PIIA can’t reach any of these, because the people signing never owned the rights to give.
A lawyer finds those claims before a buyer does and gets the wording right for the hires a templated PIIA was never built for. If a former contributor resurfaces to claim the work, the same lawyer defends you. Serotonin Legal maps a founder’s chain of title and closes these gaps before anyone else goes looking.
For more on what legal decisions founders can handle on their own and which call for counsel, our FAQ covers the questions tech founders ask us most.
Reach out to schedule a free consultation.
Serotonin Legal advises technology founders on corporate, regulatory, and transactional matters at the intersection of AI, blockchain, and fintech. This guide is for general informational purposes and does not constitute legal advice. No attorney-client relationship is formed by reading this material.
FAQs
What is the difference between a PIIA, PIIAA, CIIA, and an IP assignment agreement?
A PIIA, a PIIAA, a CIIA, and an IP assignment agreement are four names for one document. It assigns an employee's work to the company and protects its confidential information. PIIAA, short for proprietary information and inventions assignment agreement, is the correct full name, and PIIA is the common shorthand. Whatever you call it, check that it assigns IP in the present tense.
Does a PIIA cover inventions you make on your own time?
It shouldn't, if the invention has no tie to the company. A PIIA reaches your work for the company and anything you build with its time, equipment, or confidential information. In California, Labor Code §2870 makes an assignment unenforceable against an invention you develop entirely on your own time, with your own tools, that neither relates to the company's business nor grows out of your work there. Other states leave more of it to the wording, so read the invention clause before you sign.
Is a PIIA the same as an NDA?
No. An NDA only covers confidentiality, keeping the other side from disclosing or misusing your information. A PIIA includes that confidentiality promise. It also transfers the employee's inventions and code to the company, which an NDA never does. A startup needs that transfer, so a bare NDA with an employee leaves the startup's ownership unsecured.
Does a PIIA have to say "hereby assign"?
It should. "Hereby assigns" transfers the work as the employee creates it, so the company never has to go back for a second signature. "Agrees to assign" only promises a transfer later. If the employee then signs a present "hereby assign" to someone else, that later assignment can beat your earlier promise, because a promise alone doesn't move the rights. Present-tense wording closes that risk.
What happens if a founder or employee never signed a PIIA?
The company may not own what that person created. For code, it can fall back on the work-made-for-hire rule, which covers an employee's on-the-job copyright but not patents. For an invention, the employee can hold the patent personally until they assign it. When the company raises a round or sells, investor or buyer's counsel checks that every founder and employee signed. A missing signature can stall the deal until the company tracks that person down and gets them to sign.
Curious to learn more about Serotonin Legal?
Get in Touch
