A recent decision by the South Carolina Court of Appeals allows employers to assert ownership over inventions created by former employees even if those inventions were created during the employee's non-working time and without the use of the employer's resources.  However, the court may not grant equitable relief in the form of an injunction if actual damages are available.

In Milliken & Co. v. Morin, the plaintiff worked as a research physicist.  As a condition of his employment, Morin signed an employment agreement which provided for the assignment to Milliken of any inventions created by Morin during his employment or within one year after termination of his employment, whether or not created during normal working hours or at Milliken's place of employment.

During Morin's employment he attended a conference paid for by Milliken where he began developing an idea for the manufacture of a fiber with a high resistance to stretching.  Morin presented the idea to his employer, but Milliken chose not to pursue it.  Morin later resigned from Milliken and registered his new company with the South Carolina Secretary of State the same week.  Several months later, Morin filed a patent for his new fiber and assigned it to his company.  One year after his resignation, Morin gave a presentation regarding his new invention.  Milliken ultimately filed suit with a number of claims against Morin, including breach of the inventions assignment agreement.

At trial Milliken presented evidence of actual damages but sought equitable relief in the form of an injunction prohibiting Morin from developing or marketing the new fiber product.  The jury awarded Milliken $25,324 in damages.  Milliken appealed alleging that the court erred in refusing to grant the equitable relief requested.  Morin cross-appealed alleging that the court erred by finding the restrictive covenants enforceable.  The appellate court affirmed the jury verdict holding that the restrictive covenants were narrowly drafted and limited to the category of inventions to be assigned to Milliken to those that related to Milliken's business or research.  Further, the provision was limited to one year and to subject matter that Morin worked on or had knowledge of during his employment.  The Court also held that since Milliken had an adequate remedy at law and had produced evidence of actual damages, it was not entitled to equitable relief.

Although this ruling further solidifies South Carolina employers' ability to restrict employees from profiting from inventions to the extent that the invention even remotely relates to the employers' business, the employee may still be free to own the invention outright.  Other states including North Carolina, have statutes that restrict employers from seeking assignment of inventions made away from work and not using the company's resources.