Legal Definitions - holdover clause

A holdover clause, also known as a trailer clause, is a promise made by an employee to assign all rights to any inventions they develop while working for their employer, and for a certain period of time after their employment ends. In order for this promise to be legally binding, the time restriction must be considered reasonable.

For example, if an employee signs a contract with a holdover clause stating that they will assign all rights to any inventions they develop during their employment and for one year after their employment ends, they are legally obligated to do so. This means that if they develop an invention during that time period, they must give the rights to that invention to their employer.

Another example of a holdover clause is when a musician signs a contract with a record label. The contract may include a holdover clause stating that the musician must assign all rights to any songs they write during their contract and for a certain period of time after the contract ends. This ensures that the record label has control over the musician's music and can continue to profit from it even after the contract has ended.