A Confidential Information and Invention Assignment Agreement, or CIIA agreement, is the contract that determines who owns what an employee, a contractor, or a founder creates while working for a company. Without that agreement, ownership of an invention defaults to the person who made it, not the company that paid for it, which can be a problem for founders. Signing these agreements early – before code gets written or product decisions get made – is what keeps a company's intellectual property (IP) belonging to the company.

Below, we'll cover what a CIIA agreement includes, why the wording of the assignment clause matters more than founders might realise, and how the agreement is typically introduced after incorporation.

Key takeaways

• Without a signed CIIA agreement, ownership of an invention defaults to the person who created it, not the company they work for.

• The wording in the assignment clause matters: only a present-tense assignment transfers ownership.

• Founders, employees, contractors, and advisors should all sign a CIIA agreement, ideally before they start any work.

What is a CIIA agreement?

A CIIA agreement requires anyone working for a company to keep proprietary information confidential and assigns ownership of anything they invent or create on the job to the company.

Why do startups need a CIIA agreement?

Without a signed CIIA agreement, ownership of an invention defaults to whoever invented it. US patent law doesn't automatically grant ownership to an employer. Copyright law offers a narrower fix through the "work made for hire" doctrine, but that doctrine doesn't reach patents or trade secrets, and it applies to only a short, enumerated list of categories for contractors unless a signed agreement says otherwise. A general services agreement for contractors also doesn't automatically transfer invention rights the way a CIIA agreement does.

Not having CIIA agreements in place can become a real cost once a company starts raising money and must prove it owns what it's selling. Investors might run diligence on the chain of title for every piece of IP a company claims to own, and a missing signature from an early engineer, a departed co-founder, or an unpaid advisor can cause issues during a seed or Series A round. Stock purchase agreements might require every current and former employee and contractor with access to source code or product designs to have a signed CIIA agreement on file before the round can close.

A company that skips getting signed CIIA agreements at hiring can end up renegotiating ownership with a former contractor in the middle of diligence, which slows the round and hands that person leverage they wouldn't otherwise have. Founder IP that was never formally assigned to the company is a frequent source of friction, especially if a founder leaves before the assignment gets cleaned up.

What key provisions does a CIIA agreement include?

A CIIA agreement works because its provisions reinforce each other. Confidentiality without assignment protects information but leaves ownership unresolved; assignment without confidentiality does the opposite.

Agreements typically bundle the same core set of clauses:

• Confidentiality obligations: This section defines what counts as confidential information (e.g., source code, customer lists, product plans, financials). It restricts the signer from disclosing or using confidential information outside their work for the company – during and after their time there.

• Invention assignment: This is the core IP transfer, and the language matters. In Stanford v. Roche Molecular Systems (2011), the Supreme Court held that only a present-tense "hereby assigns" automatically transfers ownership (not language promising "will assign" inventions in the future). Well-drafted CIIA agreements use that exact construction.

• Prior inventions disclosure: Signers list anything they created before joining, usually on an attached schedule. Those inventions stay excluded from the assignment.

• Nonsolicitation: This restricts a departing employee or contractor from recruiting former coworkers or soliciting the company's customers for a set period after they leave

• Noncompete, where enforceable: Some states allow these clauses, and some don't. California bans them under Business and Professions Code Section 16600, and a handful of other states have passed similar restrictions in recent years. Companies operating across multiple states often draft the clause to apply only where state law permits it or skip it and rely on nonsolicitation and confidentiality instead.

• State invention carve-outs: California Labor Code Section 2870, along with similar statutes in states such as Delaware, Illinois, Minnesota, and Washington, exempts inventions that an employee develops entirely on their own time without company equipment that are unrelated to the company's business. A CIIA agreement can't override this carve-out, and templates might include the statutory language so employees know what falls outside the assignment.

Who needs to sign a CIIA agreement?

Anyone who touches the company's code, product, designs, or confidential information should sign a CIIA agreement.

This includes:

• Founders: They should sign at incorporation. Unassigned founder IP can be a source of cap table disputes later, especially if one founder leaves before the paperwork gets cleaned up.

• Employees: They should sign before or on their first day. Signing after someone has started muddies whether work from those first days is covered.

• Contractors and consultants: They need a CIIA agreement regardless of how short or part time the engagement is. Contractor status doesn't reduce how much IP exposure someone has.

• Advisors: Technical advisors in particular can end up shaping product direction or architecture even without a formal role.

Timing matters because none of this works retroactively.

How does a CIIA agreement fit into the incorporation and hiring process?

The CIIA agreement usually shows up right after incorporation and remains a fixture of onboarding. A founder team might sign founder CIIA agreements alongside the initial stock purchase agreements and board consents before any employees join. From there, the agreement becomes a standard part of the hiring packet, usually signed before or on the start date.

Stripe Atlas, which incorporates companies as Delaware C corporations and generates founder-facing legal paperwork as part of that process, includes a founder invention assignment agreement in its incorporation document set. That gives early-stage teams a starting template. The underlying sequence holds regardless of which platform or law firm a company uses: incorporate, assign founder IP, then require the same agreement from every hire and contractor as they come on board.

How Stripe Atlas can help

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FAQs about CIIA agreements