Can a CNMI employer require assignment of every invention?
In our review of the Commonwealth Code of the Northern Mariana Islands we found no statute limiting which of an employee's inventions an employer may require the employee to assign. The CNMI has no employee-invention-assignment statute, so no local statute voids an assignment of a true own-time, own-resource invention the way California or Washington law does. The one Commonwealth statute that shapes the analysis is 7 CMC § 3401, the rules-of-decision statute, which makes the common law as expressed in the Restatements the rule of decision whenever written law and local customary law are silent. On a touch screen, a tap shows all 2 sources in this group. An assignment clause is therefore bounded by the Restatement-expressed common law and ordinary contract limits, not by a legislative carve-out.
One point of candor frames this entire page. The Commonwealth Code contains no invention, patent, or intellectual-property assignment provision, and no CNMI court — Commonwealth or federal — has decided an employee-invention-ownership or invention-assignment case in our review. That makes this note more openly predictive than most in this survey: it describes the analysis 7 CMC § 3401 directs a court to run, not an analysis any CNMI court has yet run on inventions. The prediction is unusually well anchored, though, because the gap-filling rule is not itself a matter of judicial habit — it is a statute.
Section 3401 is a reception rule, not a carve-out. It tells a court where to find the governing rule when local law is silent; it does not limit what an assignment clause may capture. The NMI Supreme Court has stated the rule in exactly those terms — in In re Commonwealth Development Authority, a foreclosure case far from employment law, which is itself a signal of how thin the local corpus is .
The closest an employment restraint has come to this cascade is August Healthcare Group, LLC v. Manglona, a federal district-court order applying CNMI law to employee non-competes. Facing the same statutory silence an invention dispute would present, the court said so directly and routed the analysis to the Restatements .
The practical consequence is that a CNMI employer can, in principle, contract for assignment more broadly than a California or Washington employer, because no statute carves out own-time inventions from the reach of the clause. But that breadth is not unlimited: an assignment clause remains an ordinary contract term, subject to general contract-law defenses and — where it functions as a restraint on the employee — to the Restatement reasonableness limits discussed in the holdover question below.
Sources for this answer
7 CMC § 3401 makes the common law as expressed in the Restatements the rules of decision in CNMI courts in the absence of written law or local customary law — a rule about where courts find the governing law, not a carve-out limiting what an invention-assignment clause may reach.
In all proceedings, the rules of the common law, as expressed in the restatements of the law approved by the American Law Institute and, to the extent not so expressed as generally understood and applied in the United States, shall be the rules of decision in the courts of the Commonwealth, in the absence of written law or local customary law to the contrary; provided, that no person shall be subject to criminal prosecution except under the written law of the Commonwealth.
See 7 CMC § 3401.
In re Commonwealth Development Authority states the 7 CMC § 3401 rule that, absent written or local customary law, the Restatements of the Law are the rules of decision in Commonwealth courts — the NMI Supreme Court's own formulation of the reception rule, announced in a case outside employment law.
In the absence of written law or local customary law, the Restatements of the Law “shall be the rules of decision in the courts of the Commonwealth.” 7 CMC § 3401.
See In re Commonwealth Development Authority, 2016 MP 4 (N. Mar. I. 2016).
August Healthcare, facing the same statutory silence for covenants not to compete that an employee-invention dispute would present, holds that the CNMI looks to the United States common law as expressed in the Restatements under 7 CMC § 3401.
There is no specific law, statute, or custom in the CNMI governing covenants not to compete. In the absence of written law or local customary law, the CNMI looks to the United States common law as expressed in the Restatements. See 7 N. Mar. I. Code § 3401.
See August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).
Must a CNMI employer notify the employee?
In our review of the Commonwealth Code we found no CNMI statute requiring an employer to give an employee notice of an own-time, own-resource invention carve-out. A notice requirement of the kind California and Washington impose exists to alert the employee to a statutory own-time carve-out that limits the assignment. The CNMI has no invention-assignment statute at all, so there is no statutory line for a notice to mark. The only Commonwealth statute bearing on the question, 7 CMC § 3401, is addressed to courts — it tells them what rules of decision to apply — and imposes no employer notice or disclosure duty .
There is nothing to give notice of. The entry is marked not applicable rather than a bare no because the question presupposes a statutory carve-out that the Commonwealth has not enacted.
For a multistate employer the takeaway is the inverse of the notice states: a CNMI employer neither has to give a statutory carve-out notice nor can rely on one to cure an overbroad clause. Any disclosure or assignment duty arises from the terms of the agreement itself, and — predictively, since no CNMI court has addressed the point in our review — the enforceability of those terms would be judged under the Restatement-expressed common law that § 3401 imports.
Sources for this answer
7 CMC § 3401, the only Commonwealth statute bearing on employee-invention questions, is addressed to courts and imposes no employer notice or disclosure duty; with no invention-assignment statute there is no carve-out for a notice to mark.
In all proceedings, the rules of the common law, as expressed in the restatements of the law approved by the American Law Institute and, to the extent not so expressed as generally understood and applied in the United States, shall be the rules of decision in the courts of the Commonwealth, in the absence of written law or local customary law to the contrary; provided, that no person shall be subject to criminal prosecution except under the written law of the Commonwealth.
See 7 CMC § 3401.
Who owns an invention by default in the Northern Mariana Islands?
Absent a written assignment, a CNMI employee most likely owns the patent rights in an invention the employee conceived, unless the employee was hired to invent it . That answer is a prediction anchored in 7 CMC § 3401, not a local holding: no CNMI decision addresses employee-invention ownership in our review. The federal patent baseline is that rights in an invention belong to the person who conceived it, with a narrow exception for the employee hired to invent On a touch screen, a tap shows all 2 sources in this group., and the Restatement-expressed common law that § 3401 makes the rule of decision states the same default . The local and federal layers point the same way.
The route to the default runs through the § 3401 cascade, which the NMI Supreme Court restated as recently as 2024 in Pangelinan v. Pangelinan .
No written or customary CNMI law addresses employee inventions, so the cascade lands on the Restatement-expressed common law. That is the same mechanical move the NMI Supreme Court made in In re Commonwealth Development Authority — a foreclosure case, but one that shows exactly the posture an invention-ownership dispute would present .
The substance of the imported default is the one the U.S. Supreme Court has long described. Stanford v. Roche anchors the premise that ownership starts with the inventor .
The principal exception is the employee hired to invent. Under United States v. Dubilier Condenser Corp., an employee engaged to make a particular invention who succeeds during the term of service must assign the resulting patent to the employer .
Short of hired-to-invent, an employee who was not bound by a written assignment but used the employer's time, tools, and materials leaves the employer with only an equitable shop right — a non-exclusive, royalty-free license to use the invention, not ownership of it. For the CNMI this convergence is drafting-friendly: whether a court reasons from the Restatement-expressed common law under § 3401 or from the federal patent baseline, the answer is the same — the employer owns nothing by default, so its rights are only as good as a written present-assignment (hereby assigns) clause that transfers title automatically on conception rather than promising a future assignment.
Sources for this answer
Pangelinan describes the 7 CMC § 3401 cascade — courts first look to local written law, and where it is lacking the Restatement fills the gaps — the route by which the common-law employee-inventor default would become the CNMI rule of decision.
first look to local written law, which includes our case law adopting and/or adapting Restatement provisions. To the extent local written law is lacking, the Restatement fills the gaps.
See Pangelinan v. Pangelinan, 2024 MP 5.
In re Commonwealth Development Authority shows the § 3401 cascade applied mechanically — the trial court properly referred to the Restatement because no written or local customary law addressed the question — the identical posture an employee-invention-ownership dispute would present in a CNMI court.
the trial court did not clearly err by referring to the Restatement because CDA has not identified, and we cannot find, any written or local customary law that addresses whether judicial confirmation of a foreclosure sale may be denied on the basis of the foreclosure sale price.
See In re Commonwealth Development Authority, 2016 MP 4 (N. Mar. I. 2016).
Stanford v. Roche confirms the long-standing premise of U.S. patent law that rights in an invention belong to the inventor, the baseline against which any assignment clause is measured.
Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor.
See Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).
United States v. Dubilier Condenser Corp. holds that an employee hired to make an invention who succeeds during the term of service is bound to assign the resulting patent to the employer.
One employed to make an invention, who succeeds, during his term of service, in accomplishing that task, is bound to assign to his employer any patent obtained.
See United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933).
Are trailing-assignment (holdover) clauses enforceable in the CNMI?
In our review we found no CNMI decision addressing a trailing or holdover invention-assignment clause, or any other employee-invention question. There is no statutory cap because there is no invention-assignment statute at all. The best-anchored prediction is that a CNMI court would treat a holdover clause as a post-employment restraint and test it under the Restatement (Second) of Contracts reasonableness rules that 7 CMC § 3401 imports; both local restraint-of-trade decisions ran exactly that analysis, though neither involved inventions. On a touch screen, a tap shows all 2 sources in this group.
The prediction rests on two local restraint cases, and their limits should be stated plainly. The older one, Atalig v. M.I.C. Corp., is a 1987 decision of the Commonwealth Trial Court — trial-level, pre-dating the NMI Supreme Court, and arising from an exclusive-dealing arrangement rather than employment. It nonetheless shows a CNMI court reaching for the Restatement definition of a restraint of trade, which is broad enough to cover a clause that keeps an ex-employee assigning inventions after departure .
Atalig also quoted the balancing factors a court weighs once a promise qualifies as a restraint .
Twenty-five years later, in August Healthcare Group, LLC v. Manglona, the federal district court applied Restatement (Second) of Contracts § 188 to employee non-competes as CNMI law — and, in the same sentence, expressly declined to decide whether continued employment is sufficient consideration for a restraint signed after hire .
August Healthcare also shows what reasonableness review looks like in a small island market: the hardship limb carried the day, and the injunction was denied .
The honest bottom line is a prediction built on a prediction. Neither restraint case involved inventions; Atalig is a 1987 trial-court order granting summary judgment and August Healthcare is a federal district court's preliminary-injunction ruling, so neither is an appellate decision and both are persuasive rather than binding on Commonwealth courts; and the binding NMI Supreme Court statements of the § 3401 cascade arise outside employment law entirely. What the authorities do support is the shape of the test: a holdover clause that sweeps in inventions conceived after employment ends would face the legitimate-interest, hardship, and public-injury balancing — with no duration safe harbor anywhere in CNMI law — and an overbroad clause is at meaningful risk under that balancing.
Sources for this answer
Atalig v. M.I.C. Corp., quoting Restatement (Second) of Contracts § 186(2), defines a promise in restraint of trade as one whose performance would limit competition in any business or restrict the promisor in a gainful occupation — a definition broad enough to reach a post-employment invention-assignment holdover clause.
[a] promise is in restraint of trade if its performance would limit competition in any business or restrict the promisor in the exercise of a gainful occupation.
See Atalig v. M.I.C. Corp., 3 N. Mar. I. Commw. 270 (N. Mar. I. Commw. Trial Ct. 1987).
Atalig, quoting Restatement (Second) of Contracts § 186 comment a, weighs the protection a restraint affords the promisee's legitimate interests against the hardship to the promisor and the likely injury to the public — the balancing a CNMI court would be expected to run on a holdover clause.
Account is taken of such factors as the protection that it affords for the promisee's legitimate interests, the hardship that it imposes on the promisor, and the likely injury to the public.
See Atalig v. M.I.C. Corp., 3 N. Mar. I. Commw. 270 (N. Mar. I. Commw. Trial Ct. 1987).
Atalig v. M.I.C. Corp. is an order granting summary judgment, entered after a December 1987 hearing on the defendant's motion, so it is a trial-court ruling rather than an appellate decision.
ORDER GRANTING SUMMARY JUDGMENT This matter was heard December 18 , 1987, on defendant's motion for summary judgment.
See Atalig v. M.I.C. Corp., 3 N. Mar. I. Commw. 270 (N. Mar. I. Commw. Trial Ct. 1987).
August Healthcare applies Restatement (Second) of Contracts § 188 to a post-employment restraint as CNMI law and expressly saves for another day the question whether continued employment is sufficient consideration for a restraint signed after hire.
the application of Section 188 of the Restatement is sufficient to address St. Michael’s request for a preliminary injunction and saves the issue of consideration for another day.
See August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).
August Healthcare Group, LLC v. Manglona is a ruling of the federal district court on a motion for a preliminary injunction, so its restraint analysis is persuasive rather than binding on Commonwealth courts.
In determining whether to grant a preliminary injunction, the district court applies a four-pronged test.
See August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).
August Healthcare weighs the employees' ability to earn a livelihood in a small, specialized island market heavily against enforcement — the hardship limb of the Restatement balancing that would bear on any post-employment holdover restraint in the CNMI.
An injunction that bars Pelisamen and Takai from working for Priority Care would deprive the men of the ability to earn their livelihood in a highly specialized sector of health care on Saipan.
See August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).
August Healthcare, quoting Clark v. Bunker, 453 F.2d 1006 (9th Cir. 1972), quoting Restatement of Torts § 757, states that the subject matter of a trade secret must be secret and that matters of public or general industry knowledge cannot be appropriated as secret — the threshold a holdover clause tied to confidential information must clear.
The subject matter of a trade secret must be secret. Matters of public knowledge or of general knowledge in an industry cannot be appropriated by one as his secret.
See August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).
7 CMC § 3401 supplies only a rule of decision pointing to the Restatements; no CNMI statute or decision creates invention-specific safe harbors, so drafting must assume general Restatement reasonableness review rather than any local safe harbor.
In all proceedings, the rules of the common law, as expressed in the restatements of the law approved by the American Law Institute and, to the extent not so expressed as generally understood and applied in the United States, shall be the rules of decision in the courts of the Commonwealth, in the absence of written law or local customary law to the contrary; provided, that no person shall be subject to criminal prosecution except under the written law of the Commonwealth.
See 7 CMC § 3401.
Draft for the CNMI as if no invention-specific law exists, because none does: 7 CMC § 3401 points a court to the Restatements, and no Commonwealth statute or decision supplies a carve-out, a notice safe harbor, or a duration cap for the clause to lean on . Do not rest a mid-employment assignment agreement on continued employment alone — the one local decision to apply the Restatement restraint rules expressly left open whether continued employment is sufficient consideration for a restraint signed after hire, so provide independent, bargained-for consideration . And keep any trailing clause short, narrow, and tied to information that is genuinely secret: the same decision, applying the Restatement-derived rule carried through Ninth Circuit case law, treated actual secrecy as the threshold and reasoned that matters readily observable in a small island market cannot be appropriated as secret .
What does federal law require a confidentiality and invention assignment agreement in the Northern Mariana Islands to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can restrict. The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
Sources for this answer
An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).