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This is an important case invalidating provisions of an employment agreement based upon California Law.
Alleshouse left his former employer Wave Loch predecessor to Whitewater and started working on inventions for his new venture the very next day. Within two months he along with his partner Yeh had filed a set of provisional patent applications at issue in this case.
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Whitewater then sued, arguing that the employment contract included rights over post-employment inventions. Assignment: Employee agrees that all right, title and interest in all inventions … that Employee conceives or hereafter may make or conceive ….
Prong c from the contract is at issue that requires Alleshouse to assign any invention connected with the business of Wave-Loch — apparently reaching indefinitely into the future. It just so happens that Wave-Loch makes wave-riding attractions, and that is also the subject of Alleshouse inventions here.
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So the patents fall squarely within the express and literal terms of the contract. Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.
The provision voids any contract that restrains anyone from engaging in a lawful profession or trade. See, e.
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Minnesota Min. The weak point : The baseline here is that the court found that this assignment agreement to be void. Roche Molecular Systems, Inc. On appeal here, the court attempted to skirt that statement by interpret interpret as only applying to assignment agreements that were not themselves driven by employment agreements, even though that caveat is not found in the decision. The examiner rejected the claims as obvious and that was affirmed by the PTAB.]
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