Moonlighting from Arm, NXP, or Samsung Austin — What Your IP Assignment Clause Actually Claims

The Austin Chip Economy and the Side Project Risk

Austin is one of the densest semiconductor employment hubs in the United States. Arm's largest U.S. office sits in Southwest Austin, employing roughly 800 engineers and growing with a new $71 million campus expansion. NXP Semiconductors runs two manufacturing and design facilities in the city, employing around 4,000 workers. Samsung's advanced-node fab in nearby Taylor anchors the region's manufacturing base, and Apple, Qualcomm, and a cluster of smaller fabless design houses fill in the rest. By most estimates, Austin's semiconductor sector supports 8,000 to 9,000 direct manufacturing and R&D positions.

For engineers at these companies, the professional upside of working in a dense chip ecosystem is obvious. The less obvious side of it: every one of those employers almost certainly required you to sign a Proprietary Information and Invention Assignment Agreement — a PIIA — when you onboarded. If you have a side project, or you're thinking about starting one, that agreement is the first thing you need to understand. This post breaks down what it actually claims, where Texas law leaves you exposed compared to California, and what steps to take before you write a single line of code on your own time.

How IP Assignment Clauses Work — and How Broadly They're Written

A PIIA is an agreement you sign as a condition of employment. Its invention assignment provision operates on three axes. The first is time: inventions conceived or developed during the period of your employment. The second is scope: inventions that relate to the company's current or anticipated business. The third is resources: inventions developed using company equipment, systems, or proprietary information. Any invention that satisfies even one of these triggers is typically pre-assigned to your employer — automatically, at the moment of conception, without any additional act on your part.

The scope trigger is the dangerous one. The clause is not limited to work you do at the office, during work hours, on company equipment. It reaches off-hours work if the subject matter is related to the employer's business. For engineers at a chip company, "related to the employer's business" is a phrase that can cover an enormous amount of territory — wireless communication, IoT device design, ML inference hardware, automotive compute, power management circuitry. The larger and more diversified the employer, the wider that territory extends.

Most engineers sign PIIAs at onboarding without reviewing them carefully. The form is long, the first day is busy, and HR presents it as standard paperwork. That's understandable — but the assignment clause is the single most consequential document you'll sign in your engineering career if you ever want to build something of your own. For a closer look at what a well-structured PIIA actually contains, Promise Legal maintains a PIIA template that shows the standard clause structure.

What "Related to Company Business" Actually Sweeps In

Courts interpret the scope trigger broadly, and the case law makes clear that this language is not policed by the courts in favor of employees. In Iconix, Inc. v. Tokuda, 457 F. Supp. 2d 969 (N.D. Cal. 2006), a court found that an employee's side project — a slideshow feature for social networks — was covered by his employer's IP assignment clause. The employee worked at an email security company that was developing its own slideshow feature; the court found that his personal project was sufficiently related to the company's business to trigger the assignment provision. The company computers he used and the work meetings where he discussed the project sealed the case.

The phrase "current or anticipated business" extends even further. In Preston v. Marathon Oil Co., the Federal Circuit upheld an assignment clause covering inventions that "relate to the present or reasonably anticipated business" of the company — meaning the employer doesn't have to be doing something today for the clause to apply. They just have to be credibly heading there. For engineers at semiconductor companies, this creates serious exposure. Arm's roadmap touches mobile compute, automotive, server infrastructure, IoT, and now AI. NXP is deep in automotive, industrial, and secure identification. A startup building RISC-V tooling, edge ML inference hardware, or automotive-grade power management is plausibly "anticipated business" at almost any major chip employer in Austin.

Texas courts add another layer of exposure. In Alcatel USA, Inc. v. Brown, a Texas court enforced an assignment clause covering all inventions "in any way connected with any subject matter within the existing or contemplated scope of the Company's business" — language that is even broader than "anticipated." There is no Texas statute limiting this scope language. The clause in your PIIA is, effectively, the only protection you have.

Texas vs. California vs. Delaware: The Moonlighting Protections Map

California engineers have a statutory floor that Texas engineers do not. California Labor Code § 2870 prohibits employers from claiming inventions developed entirely on the employee's own time, without using the employer's equipment, supplies, facilities, or trade secret information — except when the invention relates at the time of conception or reduction to practice to the employer's business, or results from work performed for the employer. That carve-out is narrower than it sounds: the "relates to employer's business" exception means the scope trigger still applies. But the structure matters — in California, the burden is on the employer to show the invention falls within the exception. And any PIIA clause that purports to assign broader than § 2870 allows is void as against public policy.

Texas has no equivalent statute. The states with meaningful employee IP carve-outs include California, Illinois, Minnesota, North Carolina, Washington, and a handful of others. Texas is not on that list. In Texas, your rights are determined entirely by the contract you signed at onboarding. A Texas court upheld a clause covering inventions "in any way connected with any subject matter within the existing or contemplated scope of the Company's business" without any statutory limiting principle to push back against it. If your PIIA is that broad — and many are — you have no statutory floor.

Delaware is frequently cited as an employee-friendly state for business formation, but that reputation derives from corporate law, not employment law. Delaware does not have a California-style employee IP protection statute either. The practical takeaway: if you are employed by an Austin chip company and your PIIA is governed by Texas law (as most will be), you are in one of the most employer-favorable IP assignment jurisdictions in the country.

The Company Resources Trap — What Counts as "Using Company Resources"

The resources trigger is where engineers make the most preventable mistakes. Most people understand that building a side project at the office on company time is risky. Fewer understand how low the threshold actually is.

In Iconix v. Tokuda, two employees lost the IP to their side project in part because they used company computers for some tasks and discussed the project during work meetings. Not extensively — just enough to cross the line. The court did not require proof that the project was substantially built using company resources. Partial use was sufficient.

That logic applies to every resource your employer provides:

• Company GitHub account: If you push side project code to a repository under your employer's GitHub organization — or commit using your work email — you have potentially triggered the resources clause. Use a personal GitHub account with a personal email address for any off-work development.
• Work laptop or desktop: Even a few sessions of personal project work on a company device creates exposure. The safest position is a complete separation: personal machine for personal projects, full stop.
• Work email and Slack: Sending a message to a co-founder through your work email, or discussing your startup in a Slack DM on the employer's workspace, can be construed as using company infrastructure for the project.
• Employer-provided cloud credits, compute, or API keys: API keys billed to your employer account, cloud instances running under the company's cloud contract, or GPU compute provisioned through work — all create a resource nexus.
• Work meetings and colleague input: If you're brainstorming your startup idea with a colleague during lunch in the office, or a co-worker helps you debug something during a work conversation, that informal assistance can be characterized as use of company resources.

The practical rule is strict separation. Nothing about your side project should touch any employer-provided resource, communication channel, or work context.

Prior Inventions Schedules: The Form Nobody Fills Out Correctly

At the back of most PIIAs is an exhibit — often called Exhibit A or the Prior Inventions Schedule. It asks you to list any inventions, software, or creative works you created before your employment began that you want excluded from the agreement. If you list something there, the employer acknowledges it belongs to you and the assignment clause does not apply to it. If you leave it blank or write "none," the agreement creates a strong presumption that anything you develop during your employment that otherwise meets the clause triggers was created during employment.

Engineers leave this form blank at an alarming rate — and it costs them. The common pattern: an engineer has an idea she's been sketching out for six months before joining a chip company. She fills out the PIIA on her first day, writes "none" in Exhibit A because she doesn't think the sketch qualifies as an "invention," and keeps developing the idea on her own time. Two years later, when she's trying to raise a seed round, due diligence surfaces the blank schedule and the PIIA's broad scope clause. The investor pauses. Counsel flags the employment agreement as a potential cloud on title. The deal slows down.

The fix is simple but requires intentionality at onboarding. List anything you've been working on, even informally — open source projects, patent applications in progress, software you've written, hardware designs in any stage. Specificity matters: describe the project well enough to distinguish it from anything you'll work on at the company. If you already have a job and a blank schedule, it's worth asking HR or employment counsel whether it can be supplemented. In many cases, employers will allow an amendment during active employment, particularly where the prior work is clearly unrelated to the company's business.

Arm's IP Posture: Why Austin Employees Face Heightened Scrutiny

To understand why working at Arm creates specific IP considerations for side projects, you need to understand what Arm actually sells. Arm does not manufacture chips. It designs instruction set architectures and microprocessor IP and licenses those designs to hundreds of companies — Apple, Qualcomm, Samsung, Amazon, and countless others. Every iPhone, every Android phone, the vast majority of the world's cloud servers, and essentially all automotive compute runs on Arm-licensed architecture. The company's entire enterprise value is its IP portfolio.

That dynamic was thrown into sharp relief when NVIDIA attempted to acquire Arm for $40 billion. The deal collapsed in February 2022 after regulators in the U.S., U.K., EU, and China moved to block it. The FTC sued to prevent the acquisition, arguing it would give one company control over chip architecture that its competitors depended on. The regulatory scrutiny made visible something Arm employees already knew: Arm's IP is not just an asset — it is the asset. After the failed acquisition, Arm went public in 2023 in what became the biggest IPO of that year.

For engineers at Arm's Austin campus — which the company is actively expanding with over 800 existing employees and 320 more jobs planned — this context matters. A company whose business model is licensing IP has strong structural incentives to enforce its employment agreements' assignment provisions carefully. Side projects in embedded systems, chip design tooling, RISC-V compilers, or processor verification are likely to brush against Arm's scope of business in ways that side projects at most companies would not. That does not mean such projects are legally impermissible — it means the risk of a dispute, or the need for a legal clearance, is higher than at an employer whose business is selling physical products.

Side Project Hygiene: What to Do Before You Start

The good news is that the risks described in this post are largely manageable with advance planning. The window to act is before you start your side project — not after you've built something, filed an LLC, and are talking to investors. Here is a concrete pre-launch checklist:

1. Read your PIIA. Pull the actual agreement you signed at onboarding and read the invention assignment section carefully. Note the scope language — is it "related to company business" or "contemplated scope of business" or something broader? Note whether it contains a resources clause and how it's defined. If you don't have a copy, ask HR — you're entitled to one.
2. Update your prior inventions schedule. Even if you already have a job, it's worth revisiting whether your PIIA permits schedule amendments. List every project you're considering — specifically enough to distinguish it from employer work — and get it in writing. Consult an attorney if the project closely overlaps with employer business.
3. Separate your infrastructure completely. New personal GitHub account. Personal email. Personal laptop or desktop. Personal cloud accounts paid with your personal card. Nothing about your side project touches any employer resource.
4. Build a timestamp record. Your git commit history is your best evidence that you developed the project on personal time. Keep dated notes, use a personal calendar to log work sessions, and maintain clear records showing the project was built outside work hours.
5. Screen against your employer's roadmap. Review your employer's investor presentations, product announcements, and job postings. If your idea overlaps with anything on that roadmap — today or plausibly within two to three years — that's a risk factor worth addressing before you build.
6. Request written clearance if there's meaningful overlap. Some employers will provide a written moonlighting authorization or confirm in writing that a specific project doesn't conflict with the PIIA. This is worth asking for if the overlap is real but limited. HR may decline, but having asked and documented the request creates a record.

The cost of following these steps is modest. The cost of skipping them and having an employer surface a claim after you've raised a seed round — or after you've left your job — is potentially existential for the startup.

When to Get a Legal Opinion — and What That Review Should Cover

There are four moments when a proactive legal review pays for itself many times over:

• Before you incorporate. Formation creates a legal entity that investors and co-founders will scrutinize. If there's an unresolved employer IP cloud at that stage, it is much harder to clean up later than before the entity exists.
• Before you disclose the project to third parties. NDAs with potential co-founders, advisors, or pilot customers put the project into the world. If a dispute surfaces after third parties have seen the work, the complications multiply.
• Before you raise money. Investor due diligence for any seed or Series A round will surface your employment agreement. If a legal question is going to kill the deal, you want to know before you spend six months getting there.
• Before you quit your job. The post-employment period triggers specific provisions in many PIIAs — holdover clauses that extend the assignment window for inventions that resulted from work you performed during employment. Understanding what those provisions say before you resign changes how you transition.

A focused employment agreement IP review — reading the actual agreement, mapping your project's scope against the employer's business, assessing the resource usage history — is not a complex engagement. Attorney rates for tech employment matters typically run $300 to $500 per hour. A review of one agreement for one project might take two to four hours. That cost is trivial compared to an IP dispute after funding, which can cost tens of thousands of dollars even if you prevail — and which can halt or kill a raise even if the underlying claim is weak.

An employment attorney can also advise on whether to approach your employer proactively for a written carve-out, and how to frame that conversation in a way that doesn't unnecessarily flag your intentions. Promise Legal advises hardware founders and engineers on IP and employment matters in Texas — if you're a chip-company engineer planning a side project, our IP and employment practice is a good starting point.