ip assignment clauses

Intellectual Property Assignment Agreement: A Comprehensive Guide for Your Business

LegalGPS : July 25, 2024 at 10:30 AM

Hello there, entrepreneur friend! Today let’s have that coffee chat about Intellectual Property Assignment Agreements. If you're thinking "what's that?" or "why do I need it?" then this is the perfect starting point for you. In today's competitive business world, protecting your intellectual property (IP) is more crucial than ever.

Intellectual Property Assignment Agreement Template

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Defining the purpose.

Clarity of Transfer
Definition of Transferred Intellectual Property
Compensation and Payment Terms
Warranties and Representations
Confidentiality Agreements
Governing Law and Dispute Resolution

Step 1 - Identify the Parties Involved

Step 2 - specify the assigned intellectual property, step 3 - describe the transfer of rights, step 4 - detail compensation and payment terms, step 5 - include confidentiality clauses, step 6 - determine governing law and dispute resolution process, tips for avoiding common mistakes and pitfalls.

What is An Intellectual Property Assignment Agreement?

An Intellectual Property Assignment Agreement is a legal document that ensures the transfer of an inventor or creator's rights to another person or company. Essentially, it’s a legal way of saying "what’s mine is now yours". These agreements are often used in situations involving startups, company buyouts, or employees creating new works or inventions during their jobs - situations a lot of entrepreneurs find themselves in.

Let's break that down a touch more:

The IP assignment agreement's primary purpose is to help your business prevent future disputes regarding IP ownership. When all parties are clear on who owns the intellectual property, it prevents a whole host of potential issues.

Believe me, the last thing you need or want as an entrepreneur is a legal dispute over who owns an idea, an invention, or any creative output.

And that's where this agreement steps in: it provides legal proof that the ownership has been transferred. So, if ever challenged, you can show the agreement and say "See, it’s mine!" .

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Key Elements to Consider for a Properly Drafted Agreement

When it comes to IP assignment agreements, not just any generic contract will do. It's crucial to understand and include some key elements to ensure you're fully protected.

1. Clarity of Transfer

The agreement must clearly define the scope and extent of the transferred rights. To do this, use precise language that leaves no room for confusion. For example, specify whether the IP rights being transferred are exclusive or non-exclusive and if there are any limitations on how the Assignee can use or sublicense the IP. Here's a suggested format:

"The Assignor hereby assigns to the Assignee, its successors and assigns, [exclusive/non-exclusive] rights, title, and interest in and to the Intellectual Property, subject to the following limitations [if any]:"

2. Definition of Transferred Intellectual Property

This section is where you identify the specific Intellectual Property being assigned. Start by describing the IP type (e.g., copyright, patent, trademark), then provide the necessary details:

For a copyright, include the work title and a brief description.

For a patent, mention the patent number and summarize the invention.

For a trademark, provide the trademark name, registration number, and design details.

Remember, the key is to be as detailed and transparent as possible.

3. Compensation and Payment Terms

Just as with any deal, it's important to be crystal clear about the compensation for transferring IP rights. Make sure you consider the following in your agreement:

The total amount payable

The currency

The payment method (e.g., check, wire transfer)

The payment schedule (e.g., lump-sum, installments)

For example: "In consideration for the assignment of rights, the Assignee shall pay the Assignor a total sum of [Amount] in [Currency], through [Payment Method], payable as follows:"

4. Warranties and Representations

Including warranties and representations in the agreement helps provide confidence to both parties. The Assignor should explicitly declare that they:

Are the sole and true owner of the IP

Have the complete right to assign the IP to the Assignee

The IP does not infringe on any third-party rights

A sample clause might look like this:

"The Assignor warrants and represents that they are the true and lawful owner of the Intellectual Property, have full right and authority to enter into this Agreement, and that the Intellectual Property does not infringe upon any third-party rights."

5. Confidentiality Agreements

A crucial aspect of a well-drafted IP Assignment Agreement is protecting sensitive information about the business and the IP itself. Incorporate confidentiality clauses to maintain a secure environment.

Try a clause similar to this one: "The parties agree to treat all confidential information related to this Agreement as strictly confidential, and to take all necessary precautions to prevent unauthorized disclosure or use of such information."

6. Governing Law and Dispute Resolution

Last but not least, outline which jurisdiction's laws will govern the agreement. Furthermore, state how any disputes will be resolved, such as through arbitration, mediation, or litigation.

A model clause could be: "This Agreement shall be governed by the laws of the State of [State]. Any dispute arising out of or in connection with this Agreement shall be resolved by [method of dispute resolution]."

Drafting Your IP Assignment Agreement

Let's move on to the most crucial part of our discussion: Creating your Intellectual Property Assignment Agreement. This section intends to make it much clearer and more action-oriented. Your aim? To walk away with enough information to begin drafting your agreement. Let's dive in.

Start by clearly naming the parties involved in the agreement.

Who is the 'Assignor' (the party transferring the rights)?

Who is the 'Assignee' (the individual or business entity receiving the rights)? Clearly outline their legal names and any other relevant identifying information, like addresses or official business names. It would typically look like this: "[Full Legal Name], referred to as the "Assignor," and [Full Legal Name], referred to as the "Assignee."

Here, you need to provide a full and exhaustive description of the intellectual property being transferred. Please don't leave room for vagueness or ambiguity - the more specific, the better. For instance, if it's a patent, include the patent number and a detailed summary of what the patent covers. If it's a copyrighted work, offer the title, the form of the work (e.g., a book, software, music), and a short description of it.

Your entry here might read: "The "Intellectual Property" includes, but is not limited to, [detailed description]."

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This section is all about clearly laying out what you're giving up and what you're gaining. Highlight all rights, titles, and interests being assigned from the Assignor to the Assignee. You could list them out just to ensure nothing falls between the cracks.

It’s vital to be as clear and detailed as possible here. You're specifying the extent of the rights transferred. It could be exclusive, non-exclusive, permanent, temporary, how it can be used, if it can be sold, and more.

Here's an example:

"The Assignor hereby assigns to the Assignee, its successors and assigns, all rights, title, and interest in and to the Intellectual Property, including, without limitation, the right to sue and recover for past, present, and future violations."

Now, let's talk about money. In this step, you need to fully detail the financial exchanges. Include the amount of payment, payment format, and schedule (upfront, lump sum, installments). It wouldn't hurt to clearly lay out what conditions, if any, would lead to a return of the compensation.

This clause might look something like:

"For the assignment of rights under this Agreement, the Assignee shall provide compensation to the Assignor in the amount of [Amount], payable [insert payment method and schedule]".

Especially with IP, you'll want to build in some safety nets. You can include a confidentiality clause that prevents the involved parties from disclosing sensitive information about the IP.

A basic confidentiality clause may read: "The Assignor agrees to keep confidential all non-public information that the Assignee designates as being confidential, not to disclose it to any other people, and not to use it for any purpose other than the discharge of the Assignor's obligations under this Agreement."

Finally, specify which state or country's laws will govern the agreement. This is crucial in the case of any future legal disputes. Additionally, include how disputes over the agreement will be resolved - arbitration, mediation, litigation, etc.

Here is an example:

"This Agreement will be governed by and construed in accordance with the laws of the State of [State]. Any disputes under this Agreement shall be resolved by [method of dispute resolution]."

You're now equipped with all you need to draft an agreement. But before you get started, here are some quick tips to avoid any missteps:

Ensure the agreement is detailed and described correctly

Work with a knowledgeable attorney

Review the final agreement carefully before signing

With these, you're set to protect your business's most valuable assets!

In today's competitive business environment, it's imperative to protect your inventions, your creations - your Intellectual Property. If you're still unsure where to start, check out our professional template for Intellectual Property Assignments!

With an Intellectual Property Assignment Agreement in hand, you're ensuring that ownership of these is well established to prevent future disputes.

Get Legal GPS's Intellectual Property Assignment Agreement Template Now

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This intellectual property agreement is between , an individual a(n) (the " Assignor ") and , an individual a(n) (the " Assignee ").

The Assignor has full interest in the intellectual property listed in Exhibit A and described in section 1 below.

The Assignor wishes to transfer to the Assignee, and the Assignee wishes to purchase and receive from the Assignor, all of its interest in the Intellectual Property.

The parties therefore agree as follows:

1. ASSIGNMENT OF INTELLECTUAL PROPERTY.

The Assignor assigns to the Assignee, and the Assignee accepts the assignment of, all of the Assignor's interest in the following in the United States and its territories and throughout the world:

(a) the intellectual property rights related to the intellectual property listed in Exhibit A ;
(b) all precursors, portions, and works in progress with respect to that intellectual property and all inventions, works of authorship, mask works, technology, information, know-how, materials, and tools relating to those or to the development, support, or maintenance of those;
(c) all copyrights, patent rights, trade dress, trade names, business names, other indicia of origin, trade secret rights, trademark rights, mask works rights, and all other intellectual property rights and all business, contract rights, and goodwill in, incorporated, or embodied in, used to develop, or related to any of those; and
(d) the registrations and applications for registrations of the foregoing (collectively, the" Intellectual Property ").

2. PURCHASE PRICE.

The Assignee shall pay the Assignor a flat fee of $ as full payment for all rights granted under this agreement. The Assignee shall complete this payment no later than .

3. RECORDATION.

In order to record this assignment with all relevant government agencies, within hours of the effective date of this assignment, the parties shall sign the form of intellectual property assignment agreement attached as Exhibit B . The is solely responsible for filing the assignment and paying any associated fees of the transfer.

4. NO EARLY ASSIGNMENT.

The Assignee shall not assign or otherwise encumber its interest in the Intellectual Property or any associated registrations until it has paid to the Assignor the full consideration provided for in this assignment. Any assignment or encumbrance contrary to this provision shall be void.

5. ASSIGNOR'S REPRESENTATIONS.

The Assignor hereby represents and warrants to the Assignee that it:

(a) is the sole owner of all interest in the Intellectual Property;
(b) has not transferred, exclusively licensed, or encumbered any Intellectual Property or agreed to do so;
(c) is not aware of any violation, infringement, or misappropriation of any third party's rights (or any claim of those) by the Intellectual Property;
(d) is not aware of any third-party consents, assignments, or licenses that are necessary to perform under this assignment;
(e) was not acting within the scope of employment of any third party when conceiving, creating, or otherwise performing any activity with respect to any item of Intellectual Property.

The Assignor shall immediately notify the Assignee in writing if any facts or circumstances arise that would make any of the representations in this assignment inaccurate.

6. INDEMNIFICATION. The Assignor shall indemnify the Assignee against:

(a) any claim by a third party that the Intellectual Property or its use, manufacture, sale, distribution, or reproduction infringes on or misappropriates any copyrights, trade secrets, patents, or other intellectual property;
(b) any claim by a third party that this assignment conflicts with, violates, or breaches any contract, assignment, license, sublicense, security interest, encumbrance, or other obligation to which the Assignor is a party or of which it has knowledge;
(c) any claim relating to any past, present, or future use, licensing, sublicensing, distribution, marketing, disclosure, or commercialization of any of the Intellectual Property by the Assignor; and
(i) the Assignee promptly notifies the Assignor of that claim;
(ii) the Assignor controls the defense and settlement of that claim;
(iii) the Assignee fully cooperates with the Assignor in connection with its defense and settlement of that claim; and
(iv) the Assignee stops all sales, distribution, and public use of the infringing Intellectual Property, if requested by the Assignor.
(i) obtain the right for the Assignee to continue to use the infringing Intellectual Property;
(ii) modify the infringing Intellectual Property to eliminate the infringement;
(iii) provide substitute noninfringing intellectual property to the Assignee pursuant to this assignment; or
(iv) refund to the Assignee the amount paid under this assignment for the infringing Intellectual Property.
(c) No Other Obligations. The Assignor shall have no other obligations or liability if infringement occurs, and shall have no other obligation of indemnification or to defend relating to infringement. The Assignor shall not be liable for any costs or expenses incurred without its prior written authorization and shall have no obligation of indemnification or any liability if the infringement is based on (i) any modified form of the Intellectual Property not made by the Assignor, (ii) any finding or ruling after the effective date of this assignment, or (iii) the laws of any country other than the United States of America or its states.

7. GOVERNING LAW.

(a) Choice of Law. The laws of the state of govern this agreement (without giving effect to its conflicts of law principles).
(b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .

8. AMENDMENTS.

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

9. ASSIGNMENT AND DELEGATION.

(a) No Assignment. Neither party may assign any of its rights under this assignment, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
(b) No Delegation. Neither party may delegate any performance under this assignment, except with the prior written consent of the other party.
(c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.

10. COUNTERPARTS; ELECTRONIC SIGNATURES.

(a) Counterparts. The parties may execute this assignment in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
(b) Electronic Signatures. This assignment, agreements ancillary to this assignment, and related documents entered into in connection with this assignment are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

11. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

12. NOTICES.

(a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
(b) Addresses. A party shall address notices under this section to a party at the following addresses:
If to the Assignor:




	,

If to the Assignee:
(c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

13. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

14. ENTIRE AGREEMENT.

This assignment constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this assignment. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this assignment are expressly merged into and superseded by this assignment. The provisions of this assignment may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this assignment by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this assignment. Except as set forth expressly in this assignment, there are no conditions precedent to this assignment's effectiveness.

15. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this assignment's construction or interpretation.

16. EFFECTIVENESS.

This assignment will become effective when all parties have signed it. The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

17. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to betaken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature.




Date: _________________	By:__________________________________________
	Name:



Date: _________________	By:__________________________________________
	Name:

[PAGE BREAK HERE] EXHIBIT A LIST OF INTELLECTUAL PROPERTY

add border

[PAGE BREAK HERE] EXHIBIT B FORM OF RECORDABLE INTELLECTUAL PROPERTY ASSIGNMENT For good and valuable consideration, the receipt of which is hereby acknowledged, an individual a(n) (the " Assignor ") hereby assigns to an individual a(n) (the " Assignee ") all of the Assignor's interest in the Intellectual Property identified in Attachment A to this assignment, and the Assignee accepts this assignment.

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

ATTACHMENT A INTELLECTUAL PROPERTY

Free Intellectual Property Assignment Agreement Template

How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Intellectual property assignment agreement: How-to guide

In the dynamic realm of commerce and innovation, the notion of property extends far beyond physical boundaries. Just as one might transfer ownership of a house or a car, the exchange of intellectual property (IP) rights is a critical component of modern business transactions. For instance, if you're launching a startup, acquiring product rights, or even purchasing an entire company, in each scenario, the seamless transfer of intellectual property ownership is essential for ensuring a smooth transition and protecting your interests.

So what constitutes intellectual property? Intellectual property encompasses creations of the mind, such as inventions, software, and hardware programs, literary and artistic works, designs, symbols, names, and images. As businesses grow and evolve, the need to manage and protect these valuable assets becomes increasingly important. One crucial aspect of managing intellectual property is through intellectual property assignment agreement, otherwise known as IP assignment agreement. These agreements facilitate the transfer of IP rights from one part to another.

In this article, we’ll explore the nuances of intellectual property assignment agreements, including their definitions, benefits, types, and considerations.

What is an intellectual property assignment agreement?

An intellectual property assignment agreement, also known as an IP assignment agreement, is a written contract that transfers intellectual property rights from one party (the assignor) to another (the assignee). Intellectual property covers a broad spectrum of intangible assets, including patents, copyrights, trademarks, trade secrets, and more.

For instance, a software developer might have created a groundbreaking algorithm while employed at the company. Through an IP assignment agreement, the developer transfers the rights to this algorithm to the employer, ensuring that the company has exclusive ownership and control over its use and commercialization.

Benefits of IP assignment agreement

IP assignment agreements are crucial in a company’s business and provide multiple benefits for the assignor and assignee.

Clear ownership

By executing an IP assignment agreement, the assignor unequivocally transfers all rights and interests in the intellectual property to the assignee. This clarity of ownership and proprietary rights helps to avoid disputes and potential litigation over the ownership of the IP in the future.

Legal protection

By formally transferring the IP rights through a written agreement, both parties are legally protected. This protection can be essential in case of any infringement or misuse of intellectual property.

Assured compensation or price guarantee

When transferring IP ownership rights for patents, trademarks, copyrights, etc., the original owner gets compensated by the party buying the ownership. The buyer will also pay the IP owner an agreed-upon price for the IP, which will be paid on the date as decided by the involved parties.

No future obligations

The party selling the IP won’t be responsible for meeting any future obligations. For instance, if there is an existing trademark that requires constant monitoring to know whether the trademark is used by any other competitors, the seller won't bear the charges incurred for trademark monitoring . The buyer has to bear these and any future trademark maintenance costs.

Commercialization opportunities

Assigning intellectual property rights can enable businesses to commercialize the intellectual property more effectively. This could involve licensing the IP to third parties, selling it outright, or using it as collateral for financing.

Facilitates collaboration

In cases where multiple parties are involved in creating intellectual property, an assignment agreement can facilitate collaboration by clearly defining each party's rights and responsibilities.

Risk mitigation

For businesses acquiring ownership rights to intellectual property, an assignment agreement mitigates the risk of third parties claiming rights to the IP. It provides a legal basis for defending against infringement claims and protects the assignee's investment in the IP.

Enhanced value

Clear ownership of intellectual property assets can enhance the value of a business, especially during mergers, acquisitions, or fundraising activities. Investors and stakeholders are more likely to perceive a business positively when it has secure ownership of valuable IP assets. For example, let’s say your start-up company holds sole intellectual property rights to an automatic house-locking system. When your company gets acquired by another company, the new company will also evaluate the value of the IP owned.

Understanding IP assignment agreements: Considerations for sellers

While intellectual property assignment agreements offer various benefits, as a seller of the IP you need to keep in mind what it entails for you when you sell your IP.

Choosing between an IP assignment and a licensing agreement

In an IP assignment agreement, the seller transfers all ownership rights to the intellectual property for a predetermined fee. Here the seller gets a fair market value for their IP as a one-time payment. However, if they had opted for an IP licensing arrangement , they could have retained the ownership of their IP while giving certain usage rights to the interested party. For instance, let’s say you have written and composed a song. A music company wants your song under their label. Here you have two options. You can sell your song completely to the music label, where they’ll have the right to use or alter your song as they deem fit. Or you can license your creation for an agreed-upon fee or price and set the terms and conditions for using your song. Here you’re getting paid for your creation while retaining ownership of your creation. Whichever option works best for you can be opted and respective agreements can be drawn.

Value uncertainty

The value of intellectual property can fluctuate over time due to changes in market demand, technological advancements, or legal developments. Sometimes an intellectual property’s future value can increase tremendously, impacting the fairness of the negotiated price. Hence, while deciding the price of such assets, the seller should calculate the future valuation and decide the price of IP.

Limited future opportunities

Once intellectual property rights are assigned, the assignor may be restricted from using or further developing the intellectual property in the future. This limitation could hinder the assignor's ability to explore new business ventures or pivot their existing strategies.

In conclusion, while an intellectual property assignment agreement offers significant benefits in terms of clarity, protection, and commercialization of intellectual property assets, parties must carefully weigh these advantages against the limitations. Consulting with legal professionals experienced in intellectual property law is essential to navigate these considerations effectively.

What are the types of IP assignment agreements?

Intellectual property assignment agreements are comprehensive in nature, outlining the terms and conditions under which the transfer of IP ownership occurs. Here's an overview of the types of IP assignment agreements:

Patent assignment agreement or assignment of patents

A patent assignment agreement is a written agreement whereby the owner of a patent transfers or assigns their ownership rights to the other party. This agreement ensures that the assignee gains full legal rights to the patent, including the right to exclude others from making, using, or selling the patented invention, innovations, and processes. Patent assignment agreements typically include details about the patented invention, including patent numbers, descriptions, and any related rights or obligations.

Copyright assignment agreement or assignment of copyrights

Copyright assignment agreements transfer ownership of creative works, such as literary works, music, art, and other creative expressions. By signing a copyright assignment agreement, the creator relinquishes their rights to reproduce, distribute, and display the copyrighted work to the assignee.

Trademark assignment agreement or assignment of trademarks

Trademark assignment agreement s transfer ownership of trademarks, which are used to identify and distinguish goods or services in the marketplace. Through this agreement, the assignor relinquishes their exclusive rights to use the trademark in commerce, allowing the assignee to use and enforce the mark for their business or products.

Trade secret assignment agreement or assignment of trade secrets

Trade secret assignment agreements are used to transfer ownership of confidential information or trade secrets from one party to another. These agreements outline the specific trade secrets being transferred and impose obligations of confidentiality on the assignee to protect the secrecy of the information.

By signing such an agreement, the assignee gains the rights to use and protect the trade secrets for their own benefit. It can be any proprietary information like formulas, processes, customer lists, and business strategies. These agreements typically include provisions to maintain confidentiality and prevent unauthorized disclosure or use of trade secrets.

Design assignment agreement or assignment of design

An assignment of design agreement involves the transfer of ownership rights related to industrial designs or product designs. It ensures that the assignee gains exclusive rights to reproduce, distribute, and modify the design according to their business needs. This agreement is crucial for companies involved in product development and manufacturing.

Employee or contractor IP assignment agreement

These agreements transfer ownership of intellectual property created by employees or contractors during their employment or engagement. They are essential for employers to secure ownership of IP developed by their personnel. They often include provisions related to confidentiality, non-competition, and non-disclosure, which are mostly included in an employment agreement. Sometimes, employers even ask employees to sign separate non-disclosure agreements whenever an employee comes up with an invention.

Assignment of IP in a joint venture

In cases where multiple parties jointly create intellectual property, a joint ownership agreement may establish each party's rights and responsibilities. These agreements detail the terms of joint ownership, including each party's share of the IP, decision-making authority, and rights to exploit the IP.

It's essential to choose the appropriate type of IP assignment agreement based on the specific intellectual property rights being transferred and the circumstances of the transaction. Consulting with legal professionals knowledgeable in intellectual property law can help ensure that the agreement adequately protects the interests of all parties involved.

Who uses intellectual property assignment agreements?

IP assignment agreements are utilized across a spectrum of industries and scenarios. These agreements are crucial tools for businesses and individuals seeking to define and transfer intellectual property rights.

Corporations and businesses

Employment agreement : Companies frequently incorporate IP assignment clauses into their employment contracts. This ensures that any intellectual property created by employees during the course of their employment is automatically assigned to the company.

Consulting agreement : Similar to employment agreements, consulting contracts may include provisions requiring consultants to transfer any intellectual property they develop while working for the company.

Transactions contemplated : In mergers, acquisitions, or other business transactions, IP assignment agreements are employed to transfer ownership of intellectual property assets between parties.

Joint ventures : Partners in joint ventures often use these agreements to clarify ownership rights and facilitate the sharing or licensing of intellectual property developed during the collaboration.

Individuals and inventors

Prior inventions : An individual with a prior invention may use IP assignment agreements to transfer ownership rights to a new employer or business partner.

Consultants and contractors : Freelancers, consultants, and independent contractors may be required to sign an IP or invention assignment agreement as part of their contractual arrangement with clients.

Startups : Startup founders commonly use these agreements to consolidate ownership of intellectual property created before or during the company's establishment.

In essence, assignment agreements are utilized by parties across various sectors and contexts to facilitate the transfer of valuable intellectual property rights, ensuring legal protection and compliance while fostering innovation and business growth.

Key provisions of an intellectual property assignment agreement

Introduction.

Begin the agreement by formally introducing the parties involved to the agreement. In an intellectual property assignment agreement, the party selling the IP is called the “assignor,” and the other party who buys it is called the “assignee.” Here, along with providing the details of the intellectual property, the assignor explicitly agrees to transfer intellectual property rights to the assignee according to the agreed-upon terms of the agreement.

Assignment of IP

This section specifies the intellectual property being transferred. It identifies the specific patents, trademarks, copyrights, trade secrets, or other intellectual property referenced in the agreement. Additionally, it outlines the scope of the transfer and any limitations on the assigned IP rights.

Purchase price

The agreement details any monetary compensation involved in the transfer of intellectual property rights. In this section, clearly outline the payment terms of the agreement. Detail whether the parties hereto agree to pay the assignor as a lump sum or in installments. If the payment is made in installments, you must also provide the schedule for such payment.

Recordation

To formalize the transfer of intellectual property rights, recordation with relevant authorities may be necessary. This provision addresses the requirement and process for recording the assignment with the appropriate governmental authority, ensuring compliance with legal formalities.

No early assignment

This clause states that the assignment of IP rights cannot occur before certain conditions are met, such as before the completion of a project or the fulfillment of payment obligations. This section prevents premature transfers of IP.

Assignor’s representations

In this part, the assignor provides assurance that they have the sole right to the IP created and it hasn’t been licensed to any third-parties. They also affirm that they have the legal authority to transfer ownership of the IP and there are no undisclosed encumbrances or infringements.

Indemnification

This provision outlines the parties' obligations to indemnify each other against any losses, damages, or liabilities arising from a breach of the agreement or the assertion of third-party claims related to the transferred IP.

Governing law

This section specifies the jurisdiction whose laws will govern and interpret the agreement. It provides clarity in the event of legal disputes.

This clause outlines the procedures for making changes or modifications to the intellectual property assignment agreement. To make any changes pertaining to the terms of the agreement requires written consent from both parties.

Assignment and delegation

This provision addresses the transferability of rights and obligations under the IP assignment agreement. They stipulate whether parties can assign their rights or delegate their duties to third parties.

Counterparts; electronic signatures

This section permits the IP assignment agreement to be executed in multiple counterparts, facilitating convenience in signing. It also recognizes the legal validity of electronic signatures, ensuring compliance with modern technological practices.

Severability

The severability clause states that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect. This ensures that the invalidity of one provision does not invalidate the entire agreement.

This provision details the methods and addresses for official communication between the parties regarding the intellectual property assignment agreement. They ensure that important correspondence is properly delivered and acknowledged.

Waiver provision addresses instances where a party chooses not to enforce its rights under the agreement. For instance, if certain provisions are waived off on a one-time basis regarding the agreement, this doesn’t mean that the provision is waived for the entire term of the agreement. Take the case where the assignee is paying for the IP in installments. If the assignee is not able to pay the installment for a month, then the assignor can waive that default and continue the agreement upon prior written consent.

Entire agreement

This part of an intellectual property assignment agreement explains that the parties agree to the specific terms and conditions mentioned in the agreement. Any verbal negotiations or other terms that are even stated via email or otherwise are not part of this agreement.

This section states that the headings used in the agreement are for convenience only and do not affect the interpretation of the provisions.

Effectiveness

The effectiveness provision specifies the date on which the agreement becomes effective. This ensures clarity regarding when the rights and obligations outlined in the agreement take effect.

Necessary acts; further assurances

Requires the parties to take any additional actions necessary to carry out the terms of the agreement fully. This may include signing additional documents or cooperating with each other as needed.

How does an online template facilitate drafting intellectual property assignment agreements?

There are various advantages of using an online template for IP such as.

Simplified drafting process

Online templates streamline the drafting process of IP assignment agreements. By providing a structured framework, these templates guide users through the essential elements required for such agreements. Users can efficiently input pertinent details specific to their arrangement, ensuring comprehensive coverage of the subject matter assigned.

Ease of customization

Some online template providers, like LegalZoom , allow you to easily customize the templates to suit specific circumstances. With editing options available, users can modify clauses and provisions to reflect their agreed-upon terms and conditions of the arrangement

Clarity and consistency

These templates offer clear and standardized language, enhancing understanding and minimizing ambiguity. Consistent formatting and terminology throughout the agreement contribute to its readability and effectiveness.

Time and cost efficiency

Utilizing an online template can minimize the need for extensive document research and costly legal consultations. It allows parties to draft a comprehensive IP assignment agreement efficiently and affordably, saving valuable time and resources.

Accessibility and convenience

Online templates are readily accessible from anywhere with an internet connection, enabling parties to initiate and complete the drafting process conveniently. This accessibility promotes collaboration and facilitates the timely execution of agreements.

As you can see, using online templates provides numerous benefits. Since there are a multitude of templates available online, choosing the right template is key. To streamline this process, LegalZoom offers a comprehensive intellectual property assignment agreement template that is simple and easy to use. Just answer the guided questions, complete the form, and download the document for free.

Frequently asked questions

What's an intellectual property assignment agreement.

When your business needs to sell or buy intangible assets, use an intellectual property assignment agreement to protect both parties. It enables the transfer of ownership of intangible items legally. Intellectual property includes everything from patents to trademarks to software and more.

What key details are required to complete your assignment agreement?

Here's the information you'll need to complete your intellectual property assignment agreement:

Who owns the intellectual property : Keep the information of the assignor ready while drafting your agreements
Who's buying the intellectual property : Have the name and contact details of the assignee ready
How much it costs : Know what the buyer pays for the intellectual property

Related categories

Related templates.

Assignment of Agreement

Transfer work responsibilities efficiently with an assignment of agreement. Facilitate a smooth transition from one party to another.

Copyright Assignment

Protect your intellectual property with a copyright assignment form. Securely transfer your copyright to another party, clearly defining ownership terms while preserving your rights effectively.

Patent Application Assignment

Transfer the ownership rights or interests in a patent application. A patent application agreement defines the terms of transfer, promotes collaboration, and mitigates risks.

Patent Assignment

Simplify the process of transferring patent rights for both buyers and sellers with a patent assignment agreement. Document the ownership transfer clearly and efficiently.

Trademark Assignment

Simplify the buying and selling of trademarks with a trademark assignment agreement. Transfer intellectual property rights and ensure a fair and smooth transaction.

Trademark License Agreement

Ensure fair use of intellectual property with a trademark license agreement. Outline the terms of usage and compensation.

What are IP Assignment Agreements?

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Most automated or semi-automated providers of startup legal documentation fail to provide even a basic IP assignment and confidentiality agreement—an essential document that all company personnel (founders included) must sign to ensure that IP is both validly assigned to the Company and protected from disclosure. When used with employees and consultants, IP assignment and confidentiality clauses are typically bundled into a single contract, often called a “Proprietary Information and Inventions Assignment Agreement” or a “Confidential Information and Inventions Assignment Agreement” (though there are many names that can be used here).

What are IP assignment agreements?

IP assignment agreements are contracts between a business and its personnel that transfer ownership of IP created by the personnel during their employment or engagement with the business. IP can include patents, trademarks, copyrights, and trade secrets. The agreement ensures that the business retains ownership of any IP created by the personnel, even after they leave the business. Even if your personnel are not involved in creating IP, it’s advisable to have these agreements in place—you never know where the next great idea might come from, and in any case, it’s easier to get this agreement signed than it is to explain to an investor or acquirer why you didn’t. Without an IP assignment agreement, personnel may be able to claim personal ownership of the IP they created, which can be deadly to a business that relies on IP for its value. If you are missing these agreements, investors and acquirers will notice and it can cause your financing or acquisition to fall through, particularly if the personnel who failed to sign have left or are otherwise unwilling to sign.

What are confidentiality agreements?

Confidentiality agreements, also known as non-disclosure agreements (NDAs), are contracts between a business and its personnel that prevent the personnel from disclosing confidential information about the business. Confidential information can include trade secrets, customer information, financial information, and any other information that is not publicly available. Most founders innately understand the importance of maintaining confidentiality, so rarely fail to have an NDA in place with individuals to whom they provide sensitive information. It should be noted, though, that having confidentiality agreements with your employees and consultants has become particularly important in recent years, as states and the federal government have sought to restrict the use of noncompetition agreements. Having a strong confidentiality agreement can be the key to ensuring that your ex-employees don’t take valuable information to your competitors.

While confidentiality obligations are self-explanatory and a “must-have”, you must also remember that an NDA does not necessarily include an IP assignment agreement. NDAs, particularly those provided by automated/semi-automated document providers, are often designed for use solely during preliminary conversations with potential commercial or collaboration partners. In that context, NDAs do not (and likely should not) have any clauses providing for the transfer of IP ownership. It is therefore critical that you do not simply ask your employees and contractors to sign a “standard” NDA—yes, that agreement will likely prevent those folks from sharing your sensitive information, but if you’re paying them to create IP for you, you’ll also want language that ensures that your company actually owns the work product they create.

Please remember, have your personnel (employees, contractors and even advisers) sign an IP assignment and confidentiality agreement, ideally on the day that individual first starts working for you. File that agreement away somewhere safe (ideally with your lawyer). These agreements ensure that the business retains ownership of its IP and that confidential information is kept secret. If you need help drafting IP assignment and confidentiality agreements, consult with a qualified attorney with experience in representing high-growth startups (believe it or not, there’s “magic language” needed to ensure these agreements work properly, and even a Supreme Court case about it).

Ftc non-compete ban: what employers need to know, anatomy of a venture financing, what is venture capital and why does it matter.

What are IP Assignment Agreements?

For the high-growth startups we represent (and into which our venture capital clients invest), intellectual property (IP) is typically the core asset driving the company’s value. Ensuring that the company’s IP is properly owned and protected can therefore be the difference between success and failure. It is somewhat surprising then, how often founders fail to ensure that their companies do, in fact, own this critical property. Founders who eschew legal representation in favor of low-cost, automated options tend to fall into this trap most often. Most automated or semi-automated providers of startup legal documentation fail to provide even a basic IP assignment and confidentiality agreement—an essential document that all company personnel (founders included) must sign to ensure that IP is both validly assigned to the Company and protected from disclosure. When used with employees and consultants, IP assignment and confidentiality clauses are typically bundled into a single contract, often called a “Proprietary Information and Inventions Assignment Agreement” or a “Confidential Information and Inventions Assignment Agreement” (though there are many names that can be used here).

What are IP assignment agreements?

What are confidentiality agreements?

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Important Provisions of an IP Assignment Agreement

This article is written by Anurag Mawai, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from Lawsikho.com .

Table of Contents

Introduction

India is the seventh largest economy of the world with close to three trillion dollars’ worth in GDP and over a billion strong workforce. It has been regarded for a long time as the next industrial workhorse of the world. And in this Global Fifth Industrial Revolution, a new kind of right has come to dominate other aspects of business, i.e. a right to intellectual property. Intellectual property (“IP”) rights can be defined as the rights acquired by people over various creations and inventions derived by the faculties of their intellect and genius. These intellectual properties are usually classified as Trademark, Industrial Design Copyright, Trade Secrets, Patent etc. which are governed by different statutes promulgated by the respective legislatures. These laws tend to encapsulate different rights associated with these IPs; while some rights can be specific to those with registered IPs, some are available to all owners of IP. These rights which are derived from such IP are, in simple terms, a way to exploit them for commercial gains in terms of its different uses, modifications, enhancements, etc. If there is no written agreement, IP rights usually remain with the creator of the IP, even if they have been paid by another for creation of the said IP. However, there are some exceptions to this general rule e.g. where a joint venture is undertaken and there is no agreement between the parties to cooperate, both the parties can license the IP independently. It is the prerogative of an IP Attorney to safeguard the interest of their clients and to advise them to protect their respective IP rights through various agreements which provide for the safeguarding, selling, transferring or licensing of the said IP rights. One of such important agreements governing the rights and liabilities of Intellectual Property owners is an IP Assignment Agreement.

What is IP Assignment?

Assignment of intellectual property (IP) means the process by which ownership of some creative work made for a company/organisation/person by an innovator is transferred to the entity which commissioned the said work. This is usually done by making the inventor sign an agreement which details an explicit transfer of all rights and authority over the said commissioner IP made during the course of their engagement to the said commissioning company/organisation/person. In case of employees, this IP Assignment clause is usually attached with either a Confidentiality and Inventions Assignment Agreement (CIIAA) or a Proprietary Information and Inventions Assignment Agreement (PIIAA).

The process of intellectual property assignment consists of transfer of an owner’s rights, title and interest vested in the intellectual property rights. The transferring party (Assignor’) of the intellectual property rights may transfer all or part of his rights – e.g. the copyright owner could assign only some of his economic prerogatives. The transfer of intellectual property rights is made upon a payment of a lump sum or royalties. An IP Assignment Agreement is very crucial for any organisation in today’s time when everything is done through contract employment and in this scenario an independent contractor may be paid by the organisation to develop a program or to create a product and in case the organisation does not have an IP Assignment Clause in the said employment or consultant agreement all the IP rights to the said product will be vested with the said individual only. In this matter a landmark case of Preston Vs. Marathon Oil Co. in the U.S. Court of Appeals is of immense relevance. The facts of the case could be summarized as follows. Yale Preston was an employee of a U.S Oil Company by the name of Marathon Oil Company (“Marathon”), he signed the employment agreements of Marathon. which assigned all intellectual property “made and conceived” during the term of the Agreement to Marathon. The dispute was about a methane extraction device for which Preston claimed to have devised plans before being employed by Marathon, while during the term of the Agreement, Marathon manufactured these devices, obtained a patent for them and deployed them at various plants. Preston contended the ownership and assignment of the device, arguing it to be a prior invention and not covered by the assignment Agreement. The U.S. Court of Appeals conclusively decided the matter on the basis of one simple argument, that the device/invention was not clearly conceived prior to the employment and only a rough idea was drawn, and the full working model was developed during the employment term and so was given in the IP Assignment Agreement which required the invention to be not only conceived but made before the term of the Agreement began. Hence not only do all employers need to have an IP Assignment contract with all employees but they need to have it drafted as astutely as possible to curb any loopholes which may in future cost them billions.

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Types of IP Assignment Agreement

Assignment of copyright.

The Copyright Act, 1957 is the statute governing assignment of copyrights in India. According to Section 19 of Copyright Act, 1957 the deed of assignment shall specify the `rights assigned’, the duration as well as the territorial extent of the said assignment, and the royalty payable, if any. In case the duration of assignment is not specified, it shall be deemed to be for five years and in case the territorial extent is not specified, it shall be deemed to extend within the entire territory of India as confirmed in Delhi High Court judgement of Pine Labs Pvt. Ltd. vs Gemalto Terminals India Pvt. Ltd & Ors. FAO (OS) 635 & 636 of 2009 . It is mandatory for the assignor or his agent to give written assent, an oral agreement is invalid in this case. If the assignee fails to exercise any of the rights assigned to him within a period of one year of the assignment, the assignment is deemed to have lapsed unless a contrary provision is made in the Assignment Agreement.

Section 19A details provisions regarding dispute in Copyright Assignment . The section states that the assignor has the right to apply for revocation of the assignment with the Copyright Board, in case an assignee fails to sufficiently exercise the rights assigned to them and in the inquiry carried out by the board it the said failure is not attributable to any act or omission of the assignor. The section also makes the provision that the Copyright Board cannot revoke an assignment unless it deems the terms as too harsh for the assignor. And no such revocation shall be made within a period of five years from the date of assignment.

In some jurisdictions, a copyright assignment is even exempt from stamp duty (As provided in Article 25 of Schedule I of Bombay Stamp Act, 1958).

For an application for changes in registration of Copyright provisions as laid down in Form V under Rule 16 of Copyright Act, 1958 shall be applicable. This application has to be delivered by hand or by post.

Assignment of Patents

The Statute governing patent assignment is Patents Act, 1970. This Statute provides for patents to be assigned in partial manner or complete manner in exclusive as well as non-exclusive. Section 68 of Patents Act, 1970 states that a patent assignment must be made in writing and thereafter it should be registered with the Controller to operate as a legally enforceable contract [ M/s National Research Development Corporation Vs Ineos ABS Ltd (2012) 5 CTC (IP) 8 ].

The controller shall ask to be presented with every document which gives effect to the assignment or it is an evidence of the transfer of the IP or it affects the proprietorship of the IP or creates an interest in the said IP along with two copies of the assignment deed and other ancillary documents certified to be true copies. The Controller may further call for such other proof of title or written consent as he may require.

Assignment of Design

An Assignment of Design can be obtained under provisions of Section 15 of Copyright Act, 1957 or under instrument of design as specified in Rule 37 of Designs Act, 2000. An application for registering the title shall be filed within six months of the execution of the instrument of assignment.

Assignment of Trademark

A Registered trademark can be assigned as per Rule 68 of Trademark Rules, 2003, by making a request under Form TM-23 or 24 depending if assignment is made to the assignee only or assignment is done to assignee along with the proprietor. This application should contain detailed particulars of the applicant’s claim to the trademark and a duly certified copy which has to be produced at the Registry for inspection during the time of application.

An unregistered Trademark may be assigned or transmitted without goodwill to the business who has devised it as provided under Section 39 of Trademark Act, 1999.

Key Provisions of an Assignment Agreement

Object and scope of the agreement.

The Object and Scope Clause is a vital part of any assignment agreement. The Scope of an assignment clause identifies and specifies the exclusive rights with respect to the IP and the extent to which the assignor shall enjoy them.

The Object of the IP Assignment defines and elaborates on the purposes for which the said assignment of IP can be used the assignor like in a patent assignment for its object i.e. use of patent in commercial use the additional know how of the patent is also deemed as transferred. It is important to know that the assignor can only transfer those rights which he possesses or shall possess in the future as specified in the agreement and so shall the scope be defined.

Where the Assignor is the innovator of the patent as specified in Annexure to the Agreement and specified in reference in this Agreement.

And whereas the Assignor has agreed to assign, sell and transfer the said patent to the assignees for the use and purposes as laid down under the Agreement.

The Assignment Clause

The main assignment clause which specifies the transfer or conveyance of ownership of rights over the IP is the keystone to an IP Assignment Agreement.

If a clear outline of the scope of ownership and the procedure of such transfer is not laid out, then the entire IP Assignment Agreement would collapse.

An IP Assignment clause also details the manner in which such transfer over the right is shifted from the assignor to the assignee e.g. if any particular permission is to be taken and only after such process laid down in the assignment clause is completed does the contract become effective.

“In pursuance of the Deed/Agreement and in consideration of the payment of consideration in the Agreement, and other good and valid consideration the receipt and validity of which is hereby acknowledged. Assignor hereby conveys, transfers assigns, delivers, and contributes to Assignee all of the Assignor’s right, title, and interest of whatever kind in and to the patent, together with:

the goodwill of businesses related to the products, services in respect of which the patents are used and for which they are registered.
all income, royalties and damages hereafter due or payable to Assignor with respect to the patent including damages and payments for future infringement or misappropriations.”

Term of Assignment

Term of an IP Assignment Agreement specifies the time period for which the said assignment over the rights of the IP will operate. This Assignment can be indefinite or for a definite period of time. The Term Clause should also specify the procedure of renewal of the said Agreement, mostly IP Assignment Agreements have an auto renewal clause which states that unless the parties agree to terminate the agreement in writing, it shall renew perpetually for the same term. An assignment can be perpetual in nature or for a fixed definite period of time.

Territory of Assignment

The territory clause of an IP Assignment Agreement specifies the territorial limits within which said IP ownership operates. The Assignment Agreement shall clearly lay down the areas and boundaries within which the assignor surrenders his proprietary rights as they will not be surrendered till the Agreement is terminated and territorial boundaries can add the specificity to operation of the IP Assignment especially for commercial ventures.

The Clause for Term and Territory is usually drafted together for e.g.:

“Thus as per the conditions laid down in this Agreement, the Assignor hereby makes the patents an absolute property of the Assignee starting from the Execution Date of this Agreement. This Assignment would operate on a worldwide basis and the Assignees shall be empowered to take all necessary actions to effect the registration of this Agreement in the Registrar’s office of the appropriate jurisdiction.”

Future Transfers

Usually in perpetual IP Assignment Agreements right to make any future transfers is also included and parties should specify and clarify their intentions in writing regarding these future rights. In a fixed term assignment future transfer rights are very restricted and practically withdrawn. Any future transfer of right by the assignee is limited to the right acquired by him in the Assignment Agreement only as well as limited to the scope and territory within which such assigned right operated in the original assignment agreement.

An Example of Future Transfer Rights Clause in a limited Assignment Agreement:

“Assignee shall not transfer or assign any right, title or interest in the Intellectual Property, or any ancillary rights derived from them, to any third party without the Assignor’s prior written consent. Any purported transfer or assignment in violation of this Clause shall be deemed as null and void.”

Representations and Warranties

These clauses lay down clear aspects of the Assignor’s liabilities and specify the aspects on which the Assignee can lawfully and easily terminate the Assignment Agreement without much financial hassle.

“The Assignment Agreement should have clear laid out warranties from the Assignor stating various aspects like:

Assignor represents and warrants to Assignee that: Assignor exclusively owns all right, title, and interest in and to the Assigned Property;
Assignor has not granted and will not grant any licenses or other rights to the Assigned Property to any third party;
The Assigned Property is free of any liens, encumbrances, security interests, and restrictions on transfer;
To the best of Assignor’s knowledge, the Intellectual Property that is assigned as part of the Assigned Property does not infringe Intellectual Property Rights of any third party; and there are no legal actions, investigations, claims, or proceedings pending or threatened relating to the Assigned Property.”

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Confidentiality

A Confidentiality Clause not only serves the Assignor’s interests while the Agreement is in operation but proves to be a vital safeguard in case of termination of Agreement as well. A well drafted confidentiality clause being part of the saving clause in an agreement can prevent losses to Assignor and prevent unauthorized access, use or disclosure of sensitive proprietary information which can prove to be fatal for an enterprise. Confidentiality Clauses paired with a Non-Disclosure Agreement also prove to be an asset in litigation as all the rights which need to be safeguarded are put under the shield of Non-Disclosure and an injunctive order in case of breach is quickly received from the courts.

“The Parties, its agents, employees shall hold and maintain in strictest confidence all Confidential Information, and shall not disclose the said information to any third party, except when necessary for the performance of its obligations under this Agreement, or requested by a statutory, government, or regulatory authority. Notwithstanding the foregoing, Confidential Information shall not include information in public domain or which comes to the knowledge of the public through no fault of the Parties. The Parties agree to enter into a Non-Disclosure Agreement the terms of which shall supersede and which shall survive termination of this Agreement.”

Indemnification

An Indemnification Clause is essential to protect the Assignee from any future losses or litigation expense which they might have to incur on account of any misrepresentation in the Assignment Agreement. Or any other breach of warranties by the Assignor himself or by his officers, shareholders, successors, partners or assigns. The Indemnification clause protects the Assignee from any expense, judgements, penalties, claims or demands which may be imposed on the Assignee through no fault of his and hence a vital protection against fraud or breach.

“Assignor agrees to indemnify, defend and hold harmless Assignee and its employees, officers, directors, representatives, and agents against any claim, loss, damage, settlement, cost, expense, or other liability including without limitation attorney’s fees arising or relating to:

Assignee’s actual or alleged breach of any obligations in this Agreement.
Any actual or alleged infringement of any intellectual property rights of any third party’s rights infringed by the Assignor or its employees, representatives, agents, directors or employees.

Assignor shall use a counsel reasonably satisfactory to the Assignee to defend each indemnified Claim, if at any time Assignee should reasonably determine that any indemnified Claim might adversely affect the Assignee, he may take control of the defense at its expense.”

Further Assurances

In a Further Assistance Clause, the Assignor assures the Assignee to assist in any further procedural clearances or regulatory permissions which may include registration of documents, defense of any judicial opposition or any other proceedings to effectuate and fully complete the ownership of the IP rights for their complete use and enjoyment Assistance. This clause also enables the Assignee to complete the transfer procedure to use the IP rights seamlessly and make effective use instead of being entangled in legal or procedural hurdles.

“The Assignor further covenants that on the request of the Assignee, it will execute all documents, papers, forms and authorization that may be necessary for securing, completing or vesting in the Assignee full right, title and interest in the Patent.”

Power of Attorney

Power of attorney is also one of the vital clauses for seamless transfer of the assigned IP rights supposedly if at any time after the assignment agreement is executed Assignee is unable to secure Assignor’s signature on any letters patent, copyright, or trademark assignments or applications for registrations, or for filings relating to the Assigned Property, the assignor can appoint assignee and his authorized officers or agents as his agents, to act for and on its behalf and stead to execute and file any and all such applications, registrations, and other documents with their authorisation having the same legal force and effect as if executed by Assignor himself.

“The Assignor hereby appoints as their true and lawful attorney-in-fact who may for Assignor and in their name, place and stead, and for their use and benefit, may sign acknowledge, swear to, deliver, file or record at the appropriate public offices, any and all documents, certificates, and instruments as may be deemed necessary or desirable by the Assignee to carry out fully the provisions of this Agreement and the law, in accordance with the terms laid down hereunder. This power shall survive the death, dissolution or legal incapacity of the Assignor, and shall be valid for all obligations of the Assignor as laid down in this Agreement.”

Remedy Provisions

A clause providing for an Injunctive relief/Specific relief or liquidated damages detailing the right of parties under certain conditions to approach the court of law can provide a boon in time of litigation as it would reduce the burden on the parties and reduce time for getting a court order at the time of breach of the Agreement. The Remedy Clause can be adjusted to provide for injunctive remedy as well as liquidated damages as per the finally negotiated remedies between the parties.

“Assignor agrees that any material breach of this Agreement or breach of [imp. Clauses can be added] would cause Assignee irreparable injury hence in addition to any other remedies under the law, Assignee shall have the right to bring to court a suit for specific performance of this Agreement.”

We are all living in the golden age of IP, with close to 3.3 billion patents being filed in the year 2019 alone, these patents would require suitable and adequate legal documentation in order to successfully commercialize and give any benefits to their owner because any innovation without adequate safeguards is a treasure trove for infringers which disrupts the genuine claims of the rightful owner of the IP and causes loss of value to the economy.

Hence, a clearly drafted agreement which leaves no room for misinterpretation is a must for every organisation as well as individuals who venture in the field of innovation and discovery as seen in the Marathon Case, because in the end it can prove to be the only shield for protecting rights worth millions.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

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Intellectual Property Assignment Agreement Template

Used 5,944 times

An Intellectual Property Assignment Agreement transfers ownership of any IP created by an employee to the employer. Make sure you have your employees sign this document prior to their start.

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Intellectual Property Agreement Template

Prepared by:

[Sender.FirstName] [Sender.LastName] [Sender.Company]

Prepared for:

[Employee.FirstName] [Employee.LastName]

[Employee.Company]

This Intellectual property agreement is entered into on (date) and will be effective from the same date, between [Sender.FirstName] [Sender.LastName] and [Employee.FirstName] [Employee.LastName] (Receiver).

As a condition of my employment with the Company, its subsidiaries, affiliates, successors or assigns (hereinafter, the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

This Property Assignment Agreement will have the effect of transferring ownership in anything created by the employee during the period of his/her employment with the company. Intellectual Property Assignment Agreements are also entered into between business entities and even individuals, where one party is looking to sell the rights to its intellectual property in exchange for something of value — usually money.

In an employer/employee Intellectual Property Assignment Agreement (which is what this agreement is), the employee may want to limit the intellectual property that would otherwise transfer to the employer. For example, the employee may not want to transfer anything conceived or created by him/her on his/her own time, especially if it does not relate to the employer’s business.

1. INVENTIONS RETAINED & LICENSED.

I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which belong to me, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions.

If in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

At the time of joining the company, I was the owner of or held proprietary rights in relation to the intellectual property identified herein and related to the company’s business of (description of business), which Intellectual Property was developed in contemplation of being used, either directly or indirectly, by the Company in connection with carrying on the business of the Company.

2. ASSIGNMENT OF INVENTIONS.

I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my rights, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”), except as provided in “Exception to Assignments” below.

I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.

I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company's sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such invention.

3. REMAINDER OF INTELLECTUAL PROPERTY.

I hereby declare that I have assets, rights or interests that go beyond the scope of this agreement, and are not included as a part of this agreement, either in sum or whole. The benefit of such assets may not be used by [Employee.Company] , unless with my expressly stated written permission.

4. MAINTENANCE OF INVENTIONS RECORDS.

I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.

The records will be available to and remain the sole property of the Company at all times.

5. COSTS AND EXPENSES.

If either party incurs any costs, fees, expenses, etc., both parties will be liable to pay for costs and expenses, in full, unless if otherwise mentioned explicitly in this Agreement, any of the other Ancillary Agreements or any other agreement between parties. If any cost was borne by any person on the instance of completing a task for another person, the person who completed the task shall be reimbursed for the amount spent, as long as they can provide receipts.

6. PATENT & COPYRIGHT REGISTRATIONS.

I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto, in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.

I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Intellectual Property Assignment Agreement.

If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

7. COOPERATION.

I agree to perform all commercially reasonable acts deemed necessary or desirable by the Company to assist the Company, at the Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and titles that come as a part of the Assigned IP. Such acts may include, but are not limited to, execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, trademark, mask work, or other applications for my invention, (ii) in the enforcement of any applicable patents, copyrights, trademark, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Assigned IP.

In the event that the Company is unable, for any reason, to secure my signature(s) to any document required to file, prosecute, register, or memorialize the assignment of any patent, copyright, trademark, mask work or other applications or to enforce any patent, copyright, mask work, moral right, trade secret or other proprietary right under any Assigned IP, I hereby irrevocably designate and appoint the Company and the Company’s duly authorized officers and agents as my agents and attorneys-in-fact to act for and on my behalf and instead of me, (i) to execute, file, prosecute, register and memorialize the assignment of any such application, (ii) to execute and file any documentation required for such enforcement, and (iii) to do all other lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of patents, copyrights, mask works, moral rights, trade secrets or other rights under the Assigned IP, all with the same legal force and effect as if executed by me.

8. RETURNING COMPANY DOCUMENTS.

I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns.

9. REPRESENTATIONS.

I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

10. EQUITABLE REMEDIES.

I AGREE THAT IT WOULD BE IMPOSSIBLE OR INADEQUATE TO MEASURE AND CALCULATE THE COMPANY’S DAMAGES FROM ANY BREACH OF THE COVENANTS SET FORTH HEREIN.

ACCORDINGLY, I AGREE THAT IF I BREACH ANY OF SUCH PROVISIONS, THE COMPANY WILL HAVE AVAILABLE, IN ADDITION TO ANY OTHER RIGHT OR REMEDY AVAILABLE, THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT OF COMPETENT JURISDICTION RESTRAINING SUCH BREACH OR THREATENED BREACH AND TO SPECIFIC PERFORMANCE OF ANY SUCH PROVISION OF THIS AGREEMENT.

I FURTHER AGREE THAT NO BOND OR OTHER SECURITY SHALL BE REQUIRED IN OBTAINING SUCH EQUITABLE RELIEF AND I HEREBY CONSENT TO THE ISSUANCE OF SUCH INJUNCTION AND TO THE ORDERING OF SPECIFIC PERFORMANCE.

11. GOVERNING LAW.

This Agreement will be governed by the laws of the State of [Employee.State] . I hereby expressly consent to the personal jurisdiction of the state and federal courts with jurisdiction in [Employee.Country] [Employee.State] for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

12. ENTIRE AGREEMENT.

This Intellectual Property Assignment Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us.

No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged.

Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

13. SEVERABILITY.

If one or more of the provisions in this Intellectual Property Assignment Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

14. SUCCESSORS & ASSIGNS.

This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

15. DISPUTES AND RESOLUTIONS.

Both parties agree that they will try to amicably settle any disputes amongst themselves, or with the help of a third party such as an agent. In case that they are unable to reach a settlement or do not wish to discuss the terms of the settlement with one another, they may approach a court of law situated in [Sender.Country] , [Sender.State] where applicable laws will come into motion.

AGREED AND ACCEPTED.

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT, I AM SATISFIED THAT I UNDERSTAND IT COMPLETELY, AND I AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.

[Sender.Company]

[Sender.FirstName] [Sender.LastName]

LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP

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When do I need an IP Assignment?

Create an ip assignment with everyone who’s worked on your product or idea without a formal contract in place. , make sure you have an ip assignment with everyone who has worked on your product or idea without a formal contract in place - this ensures your company owns their contribution, and not them..

When you first start building your business, there is often a lot of people working on your product and other intellectual property. These might be potential co-founders or team members, advisors, or even contractors that you hire (for example contractors for your website).

The IP that they create, even if it’s clearly for your business, doesn’t necessarily belong to you unless you have an IP assignment in place. There are many examples of founders not having their IP protected, causing an expensive dispute that can make you all but uninvestable.

An IP assignment ensures that any work they do for the benefit of your company, even if it was before your company was officially incorporated, belongs to your company. There is sometimes payment as part of this, which normally is either a nominal figure or what was initially agreed e.g. the contractor price for your website.

Ideally, you should make sure you have an IP assignment in place with everyone who has worked on your product, even if you don’t consider their contribution to be material to avoid any potential disputes in the future.

IP Assignment Clauses

An often-asked question in relation to IP Assignments is whether or not the Moral Rights clause can be removed and what it means if it is. The two main moral rights are 'attribution' (the right to be named as the author' and 'integrity' (the right to control certain changes in the work). So what does it mean if you remove the moral rights clause? Well, it means you'll have to assign authorship of the design to the agency and you'll need to be very careful when you make changes to the design. You will also need to be careful in which context you use the design. As such, it is recommended that you leave them in to avoid any potential disagreements.

Create, share and sign IP Assignments with each of your contributors easily on SeedLegals.

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Legal Considerations and Contracts for Transferring Intellectual Property

Transferring intellectual property (IP) rights requires a thorough understanding of the legal considerations and contractual obligations involved. IP transfer agreements outline the terms and conditions of IP rights transfer, addressing tax implications, regulatory frameworks, and ownership provisions. Assigning IP rights involves the transfer of ownership and associated responsibilities, while licensing IP allows the owner to retain ownership while granting permission to use IP assets. Confidentiality and non-disclosure agreements protect sensitive IP assets, and effective dispute resolution mechanisms and remedies are essential for protecting IP rights. Understanding these complexities is essential for a seamless transfer of IP rights; exploring the intricacies of IP contracts can reveal further insights.

Table of Contents

Understanding IP Transfer Agreements

An intellectual property (IP) transfer agreement is a legally binding contract that outlines the terms and conditions under which ownership of IP rights, such as patents, trademarks, copyrights, or trade secrets, are transferred from one party to another. This agreement is vital in facilitating a smooth transfer of IP rights, as it addresses key aspects of the transfer, including tax implications and regulatory frameworks.

Tax implications are a critical consideration in IP transfer agreements, as the transfer of IP rights can have significant tax consequences for both the assignor and assignee. The agreement should outline the tax obligations of each party, including any withholding taxes, value-added taxes, or other levies. Additionally, the agreement should specify how any tax disputes will be resolved.

The regulatory framework governing IP transfer agreements varies by jurisdiction, and the agreement should comply with relevant laws and regulations. The agreement should address issues such as antitrust laws, competition laws, and data protection regulations, to guarantee that the transfer of IP rights is compliant with applicable laws and regulations.

In facilitating a seamless transfer of IP rights, a comprehensive agreement is essential. It is vital that the agreement safeguards the interests of both parties, providing clarity on tax implications and regulatory requirements.

Key Provisions in IP Contracts

In IP contracts, key provisions play a vital part in defining the terms and conditions of intellectual property transfer. Two vital provisions that require careful consideration are ownership provisions and IP assignment clauses. These clauses determine the rights and obligations of the contracting parties, facilitating a smooth transfer of intellectual property rights.

Ownership Provisions

Ownership provisions in intellectual property contracts explicitly define the rights and interests of each party involved, thereby preventing potential disputes and providing clarity on IP ownership and usage. These provisions are vital in establishing the scope of ownership, facilitating IP inventorship, and determining the value of intellectual assets. In the context of IP contracts, ownership provisions outline the rights and obligations of each party, protecting the interests of all stakeholders. This includes defining the ownership structure, specifying the rights to use, modify, and distribute the IP, and establishing the procedures for resolving disputes. Accurate asset valuation is also critical in ownership provisions, as it enables parties to determine the financial value of the IP and negotiate fair compensation. By clearly outlining the ownership provisions, parties can avoid costly disputes and guarantee a smooth transfer of intellectual property rights.

IP Assignment Clauses

IP assignment clauses, a crucial component of intellectual property contracts, explicitly outline the terms and conditions governing the transfer of IP rights from one party to another. These clauses provide a clear understanding of the transferred IP rights, including patents, trademarks, copyrights, and trade secrets . A well-drafted IP assignment clause should address key aspects, such as the scope of transferred rights, exclusivity, and territorial limitations.

To provide thorough IP safeguards, assignment clauses should also specify the duration of the transfer, whether it is perpetual or for a fixed term. Additionally, the clause should outline the procedures for valuation and payment of asset valuations, which is critical in determining the compensation for the transferred IP rights. It is imperative to carefully draft IP assignment clauses to avoid ambiguity and guarantee that the parties' intentions are clearly reflected in the contract. By doing so, parties can mitigate potential disputes and facilitate a smooth transfer of IP rights.

Assigning IP Rights and Obligations

A pivotal step in the transfer of intellectual property is the assignment of IP rights and obligations, which involves the transfer of ownership and associated responsibilities from one party to another. This process requires careful consideration of the IP valuation, as it directly impacts the transaction's financial aspects. A thorough understanding of the patent strategy is also imperative, as it determines the scope of protection and potential royalties.

When assigning IP rights, it is imperative to identify the specific rights being transferred, including patents, trademarks, copyrights, and trade secrets. The assignment agreement should clearly outline the scope of the transfer, including the specific IP assets, geographic territories, and duration of the assignment. Additionally, the parties must address the obligations accompanying the assignment, such as warranties, indemnities, and confidentiality agreements.

A well-structured assignment agreement guarantees a seamless transfer of IP rights and obligations, minimizing potential disputes and liabilities. By carefully steering the complexities of IP valuation and patent strategy, parties can confirm a successful transfer that aligns with their business objectives.

Licensing IP: Risks and Rewards

In contrast to assigning intellectual property rights, licensing IP allows the owner to retain ownership while granting permission to use the IP assets, presenting a distinct set of risks and rewards that require careful consideration. Licensing IP can provide a lucrative revenue stream through royalty rates, which can be negotiated based on the type of license, territory, and duration. However, it also exposes the licensor to potential risks, such as the licensee's misuse of the IP, unauthorized sublicensing, or failure to meet contractual obligations.

To mitigate these risks, licensors should consider obtaining IP insurance to protect against potential losses. Additionally, licensors must verify that the licensing agreement clearly outlines the terms and conditions, including the scope of the license, territorial restrictions, and royalties. By carefully structuring the licensing agreement, licensors can optimize the rewards while minimizing the risks associated with licensing their IP.

Confidentiality and Non-Disclosure

When disclosing confidential information to a potential licensee or partner, a robust confidentiality and non-disclosure agreement (NDA) is vital to protect sensitive intellectual property assets. This is particularly important when sharing trade secrets, which are valuable and sensitive information that can make or break a business. A well-drafted NDA guarantees that the recipient of confidential information understands their obligations to maintain secrecy and prevent unauthorized use or disclosure.

In the event of a data breach, a thorough NDA can provide legal recourse for the owner of the intellectual property. It is necessary to specify the scope of confidential information, the duration of the agreement, and the consequences of breaching the agreement. Additionally, the NDA should outline the procedures for handling and returning confidential information, as well as the protocol for reporting and addressing potential data breaches. By including these provisions, intellectual property owners can better safeguard their trade secrets and minimize the risk of unauthorized disclosure. A robust NDA is a vital tool in protecting intellectual property assets and maintaining a competitive edge in the market.

Dispute Resolution and Remedies

Effective dispute resolution mechanisms and remedies are vital for intellectual property owners to protect their rights and interests in the event of infringement or misappropriation. In the context of intellectual property transfer agreements, it is imperative to establish clear and effective dispute resolution mechanisms to resolve potential disputes efficiently and cost-effectively. One approach is to include arbitration clauses in the agreement, which can provide a streamlined and binding arbitration process for resolving disputes. Additionally, parties may opt for mediation strategies, such as facilitated negotiations or early neutral evaluations, to resolve disputes amicably and preserve business relationships. It is also vital to specify the applicable law and jurisdiction governing the agreement, facilitating that the parties are aware of the legal framework governing their dispute resolution process. By incorporating these mechanisms, parties can minimize the risk of protracted and costly litigation, safeguarding that their intellectual property rights are protected and their business interests are preserved.

Best Practices for IP Due Diligence

Conducting thorough intellectual property due diligence is a critical component of intellectual property transfer agreements, as it enables parties to identify and assess the risks and liabilities associated with the intellectual property rights being transferred. This process involves a thorough review of the intellectual property portfolio, including patents, trademarks, copyrights, and trade secrets. Recommended practices for IP due diligence include conducting IP audits to identify potential issues, such as ownership disputes, invalidity, or infringement risks. Patent landscaping is another vital tool, providing a visual representation of the intellectual property landscape, enabling parties to identify opportunities, threats, and potential zones of conflict. Additionally, due diligence should involve a meticulous review of licensing agreements, contracts, and other legal documents to verify that all necessary permissions and consents have been obtained. By following these recommended practices, parties can confirm that they are adequately prepared for intellectual property transfers and minimize the risk of costly disputes or legal liabilities.

Frequently Asked Questions

Can ip transfer contracts be verbal or must they be in writing?.

While oral agreements may be enforceable, it is highly recommended to solidify IP transfer contracts in writing to provide written proof, providing clarity and minimizing disputes, as verbal agreements can lead to misunderstandings and ambiguities.

What Happens if IP Rights Are Transferred Without Owner's Consent?

In the event of unauthorized intellectual property rights transfer without the owner's consent, the transferee may incur legal liability for infringement, and the transfer may be deemed invalid, rendering the transaction voidable.

Can IP Contracts Be Altered or Amended After Signing?

Post-signing alterations to IP contracts are feasible, contingent on incorporating flexible contractual language and outlining explicit amendment procedures, facilitating contract flexibility while maintaining mutual consent and avoiding unilateral modifications.

Are IP Transfer Contracts Applicable Across International Borders?

International IP transfer contracts often encounter jurisdictional complexities, making cross-border enforcement challenging; making vigilant drafting and consideration of applicable laws vital to guarantee flawless execution and protection of intellectual property rights across international borders.

Can IP Transfer Contracts Be Inherited or Passed Down?

In estate planning, IP transfer contracts can be inherited or passed down as part of a family legacy, guaranteeing continuation of intellectual property rights and obligations, but specific contractual provisions and jurisdictional laws must be considered.

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IP Assignment Agreement and Key Clauses

Introduction.

In today’s fast-paced and innovation-driven world, intellectual property (IP) is a valuable asset for individuals and businesses alike. IP assignment means when one party, often referred to as the “assignor” or “licensor,” transfers their rights and ownership of intellectual property to another party, known as the “assignee” or “licensee.

When it comes to transferring ownership of IP rights, an IP Assignment Agreement plays a crucial role. This agreement ensures that the transfer of intellectual property is properly documented and is legally binding. In this blog, we will explore the key terms in an Intellectual Property Assignment Agreement.

What is an IP Assignment Agreement?

IP assignment agreements are usually agreements between a business and its employees or any other party that transfers ownership of IP created by the personnel during their employment or engagement with the business. IP can include patents, trademarks, copyrights, and trade secrets, or other intangible creations. It is transferred to a company or another individual. This provides a clear record of the title of the intellectual property to whoever the rights of the IP are being transferred. This can also help the creator to keep their intellectual property safe from illegal use, distribution and more.

The agreement ensures that the business retains ownership of any IP created by the employees, even after they leave the business. Even if an employee is not involved in creating IP, it’s advisable to have these agreements in place—you never know where the next great idea might come from, and in any case, it’s easier to get this agreement signed than it is to explain to an investor or acquirer why you didn’t. Without an IP assignment agreement, personnel may be able to claim personal ownership of the IP they created, which can be deadly to a business that relies on IP for its value. So, if it is such an important document, then what are the terms and clauses that are required to make it a foolproof contract?

To Learn Drafting of IP Assignment Agreement and other important agreements, sign up for our Contract Drafting & Negotiation course taught by Top Law Firm Partners. It starts on October 7, 2023.

Terms and clauses that are important in an IP Assignment Agreement

Mainly the terms need to give information about who is involved in the transfer, what Intellectual Property is being transferred, how much the Intellectual Property Costs, and why the transfer is valid. To elaborate, an IP Assignment Agreement must have the following:-

Scope and Objective of the Agreement

The scope and objective clause lays down the foundation of the IP assignment agreement. These clauses need to specify the purposes for which the assignee will use the IP. The assignor needs to know and specify the intent of the transfer of the IP. It is crucial to understand that the assignor can only transfer rights that are specified in the scope of the agreement.

Description of the Intellectual Property

A detailed description of the intellectual property being assigned is vital to identify the scope and nature of the IP rights involved. These points have to be in the description clause:

Title and Ownership : The title and ownership of the IP being transferred need to be stated.
Detailed Description : This clause needs to give a comprehensive description of the IP, including any relevant technical specifications or documentation.
Registration Information: If the IP is registered with any regulatory or governmental authority, the clause has to mention the registration details.
Assignment of Rights

The main clause is the assignment clause which specifies the transfer or conveyance of the ownership of rights over the IP. In this clause, a clear outline of the scope of the ownership and procedure of transfer has to be laid out. The key points to cover in this clause include:

Exclusive or Non-Exclusive Assignment : It must be clearly stated whether the assignment is exclusive (transferring all rights) or non-exclusive (transferring limited rights).
Territory : Definition of the geographical territory in which the assignment applies.
Duration : The duration of the assignment must be specified, whether it is temporary or permanent.
Future Transfers : In case it is a temporary assignment, it must specify whether the assignee can transfer the IP to its hires, or legal representative or assign it to any other person.
Consideration

Consideration refers to the compensation or payment exchanges between the parties. In an IP assignment agreement, the consideration may take various forms:

Lump Sum Payment : A one-time payment made by the Assignee to the Assignor.
Royalties : A percentage of revenue generated from the IP, payable over a defined period.
Equity Stake : In certain cases, the Assignor may receive shares or ownership in the Assignee’s business.

Warranties and Indemnities:

These terms protect both parties by setting forth the assurance and protections related to the intellectual property being assigned:

Ownership Warranty : The assignor warrants that they are the sole owner of the intellectual property and have the right to transfer it or they may give the warranty to the assignee.
Infringement Warranty : The assignor warrants that the intellectual property does not infringe upon the rights of any third party.
Indemnification : The Assignor agrees to indemnify and hold harmless the Assignee from any claims or damages from the assignment. To protect the Assignee from any potential future damages or legal costs resulting from any misstatement in the Assignment Agreement, an indemnification clause is crucial.
Confidentiality and Non-disclosure

To protect sensitive information related to intellectual property, it is essential that the assignment agreement has confidentiality and non-disclosure provisions. This section should have:

Confidentiality Obligations : It must specify the obligation of both parties to keep all information related to the IP assignment confidential.
Non-Disclosure : Prohibit the parties from disclosing any confidential information to third parties without prior written consent.
Governing law and Jurisdiction

Determining the governing law and jurisdiction in the event of a dispute is crucial for effective enforcement. These terms should include:

Choice of law : The term needs to specify the jurisdiction whose law will govern the interpretation and enforcement of the contract.
Jurisdiction : Determine the appropriate courts or arbitration bodies that will have jurisdiction over any disputes.

An Intellectual Property Assignment Agreement is a critical legal document for transferring ownership of intellectual property rights. By including the aforementioned clauses one can make it a foolproof contract and protect their rights and make it enforceable whenever anything goes wrong. Further, before signing the agreement one must look out for all the important terms and clauses and make an informed decision.

To Learn Drafting of IP Assignment Agreement and other important agreements, sign up for our Contract Drafting & Negotiation course taught by Top Law Firm Partners. It starts on October 7, 2023.

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Intellectual Property Assignment: What it Is and Different Types

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ContractsCounsel has assisted 36 clients with intellectual property assignments and maintains a network of 64 intellectual property lawyers available daily. Customers rate lawyers for intellectual property assignment matters 5.0.

What is Intellectual Property Assignment?

Intellectual property assignment is a process in which the ownership of a work product created for an entity by an employee or consultant is transferred to the entity.

Typically, an employee or consultant will sign an agreement that explicitly assigns any intellectual property created during service with the company. For the employee, this is called either a Confidentiality and Inventions Assignment Agreement (CIIAA) or Proprietary Information and Inventions Assignment Agreement (PIIAA).

4 Types of Intellectual Property

You should consider 4 of the main kinds of valuable assets under an intellectual property assignment:

A trademark
A copyright
Trade secrets

These are all considered valuable assets of a company, and knowing how they work and how they’re created can help protect them.

Here is an article to learn more about intellectual property.

A patent is granted by the government and gives the owner of the patent unlimited ability to build, sell or use their invention while at the same time preventing others from doing so.

Typically, patents issued have a 20-year life span, but some expire in 14. After this period, anyone else can copy, build, or sell the invention. Any attempt to circumvent this time allowance would result in a patent infringement .

To receive exclusive rights to build, sell or use your invention, you have to provide details about your invention that would allow someone who is “practiced in the arts” to recreate it. Also, there are four requirements for a patent to be issued:

The subject matter must be “patentable” (as defined by Congress and the courts).
Your idea must be “new.”
The idea must be “useful.”
Your idea must be “non-obvious.”

Additionally, you can file for three different types of patents:

Utility Patent : Utility patents are granted for inventions or discoveries of useful processes, machines, articles manufactured, the composition of matter, or any new and useful improvements to the above.
Design Patent : Design patents are granted for any new, original, or ornamental design. This type is valid for 14 years after it is issued.
Plant Patent : Plant patents are granted to persons who invent, discover, and reproduce any distinct or new variety of plant, asexually. This type is valid for 20 years after it is issued.

Here is an article to learn more about patents.

A trademark is any word, phrase, symbol, design, or combination that identifies goods or services. The term “trademark” is used for both trademarks and service marks. Still, a service mark is reserved for those services related to the company.

Owning a trademark doesn’t automatically mean you own the words or the phrasing, but rather that you own the rights to how to use that word or phrase concerning specific goods or services. A great example is an online store that tries to use the Nike swoosh mark for their own t-shirts or shoes. This is trademark infringement .

To obtain trademark protection, you must first choose the specific category of goods or services the trademark will cover. This also means the company looking to obtain the trademark must already produce the category of goods/services to be trademarked or have a demonstrative or good faith intent to provide them.

Here is an article to learn more about trademarks.

Copyright infringement is probably one of the most well-known areas of IP protection. Copyrights are obtained to protect original authored works such as:

Photographs
Audio recordings
Computer programs
Architectural works

Things like titles, names, short phrases, slogans, familiar symbols or designs, lettering, coloring, or a list of ingredients or contents, are not considered creative . Still, they are also included as items that can be copyrighted. In general, copyrights can protect the way you convey a message or expression, but not ideas, procedures, systems, concepts, processes, and discoveries.

Companies can have a record of ownership over copyrights, as the law allows for ownership through “ works made for hire ” or works created by an employee within the scope of their employment.

Here is an article to learn more about copyrights.

Trade Secrets

Businesses have a wide range of confidential information, but not everything is considered a trade secret. Typically, a trade secret refers to information that is not publicly known and involves a reasonable effort to keep it confidential.

It also has to offer some form of economic value to the information holder that would only be beneficial if the information was not known by anyone else. States and even countries have varying laws regarding trade secrets. An excellent way to consider what constitutes trade secrets is to consider what information you wouldn’t want your competitors to get ahold of.

Think about pricing information, marketing strategy, or specific processes used to manufacture your goods.

Here is an article to learn more about trade secrets.

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Does IP Assignment Need Consideration?

An enforceable and valid intellectual property assignment needs to have a valid contract. A contract requires:

Acceptance of the offer
Proper consideration

Now, what is considered valid consideration could vary. Still, generally consideration “must be ‘bargained for’ and not "illusory’” (Restatement (Second) of Contracts, § 77).

In some cases, small monetary considerations, as well as non-monetary considerations, are enough to create a binding contract, as long as there is an exchange of value between parties.

What is an Intellectual Property Assignment Agreement?

The intellectual property assignment agreement is the document that binds everything together. Companies traditionally use IP agreements to protect their inventions. However, in this arrangement, they are still free to transfer ownership of IP on a case-by-case basis.

It is sometimes called an IP transfer agreement. It ensures that if an employee helps to develop an intangible creation while employed with the company, the company still owns the rights and responsibilities to the creation.

An IP Property Assignment Agreement usually includes the following sections:

Definition of Intellectual Property
Intellectual Property Assignment
Future Intellectual Property Assignment
Representations and Warranties
Indemnification
Assumption of Liabilities
Severability
Confidentiality
Termination; Survival of Certain Provisions
Governing Law and Venue
Entire Agreement; Counterparts

Who Uses an Intellectual Property Assignment Agreement?

Any entity or person can use an intellectual property assignment to protect their original inventions. Still, they can safely transfer ownership of IP when needed.

Example of an Intellectual Property Assignment

Some examples of intellectual property assignments include:

A New Software Company: A software company working on brand-new proprietary software may assign a technology assignment agreement. This type of assignment protects startup companies before they create the company. The developers may keep certain IP rights in some cases.
An Existing Manufacturing Company: An existing company involved in manufacturing technology could institute an Invention Assignment agreement for their employees to sign. This gives the company ownership over any relevant intellectual property created by the signing employees.
New Sub-Contracted Employees: Newly contracted employees could be hired by a company to conduct research or work on new product development. In these roles, a company may ask that they sign an IP Assignment Agreement that assigns back to the company any ideas, work, a product of work, or inventions related to the business created during employment.

Intellectual property assignments are not for the faint of heart. Oftentimes these are multi-layered and complex arrangements that require careful negotiation.

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I am a licensed and active NY and CT Contracts Attorney, with over 20 years of diverse legal and business experience. I specialize in reviewing, drafting and negotiating commercial agreements. My practice focuses on working with small business clients as well as clients from international brokerage firms on acquisitions, especially in the Ecommerce space; drafting, negotiating, reviewing and advising on business agreements; ; breach of contract issues, contract disputes and arbitration. I am licensed to practice in New York and Connecticut, and am a FINRA and NCDS Arbitrator. My experience includes serving as General Counsel to small businesses. This entails reviewing, updating and drafting contracts such as employments agreements, asset purchase agreements, master services agreements, operating agreements and a variety of business and commercial contracts. Additionally, I assist clients with business strategies, contract disputes and arbitration. My diverse experience allows me to give my clients a well-rounded approach to the issues they face. I have been at top AML law firms; a Vice President at an Investment Bank, a Civil Court Arbitrator presiding over cases in contract law, commercial law, a Hearing Officer, presiding over cases and rendering written decisions, and a Judicial Clerk to a Civil Court Judge. It would be a privilege to assist you and your business with my services.

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What is IP Assignment Agreement and Why is it Crucial for Every Business

October 30, 2020
Venture Capital Funding

You may be starting or acquiring a company. Then you need the Intellectual Property Assignment Agreement (IP) to transfer intellectual property. These include innovation patents, source code, and customer lists.

In a technology business, what the investor finances is often the IP assets .

Your products and services depend on certain critical IP assets. Then an investor will undertake due diligence. It will help him to understand your right to use such assets.

In this post, we will tell you why an IP assignment agreement is required. So, we will also list out the steps to draw such an agreement.

What is Intellectual Property Assignment Agreement?

An IP assignment agreement is a contract.

It transfers the rights to the intellectual property from the creator. The rights go to another entity, such as an acquiring company.

You may (and should) ask your employees to sign the IP agreement. Additionally, this will assign to your company any ideas, work products, or inventions of the business.

Type of Intellectual Property Assignment Agreement

Technology assignment agreement.

This assigns your startup any intellectual property before you form the company.

The developer(s) may keep individual intellectual property rights under certain circumstances. Hence, they may even sell the rights to you for equity or cash.

Invention assignment agreement

This assigns new company ownership of any relevant intellectual property created by employees.

The agreement includes the founder(s) and employees as signatories. So, they become parties to a confidentiality agreement and an invention assignment agreement.

Checklist for Intellectual Property Assignment Agreement

You should include a couple of critical points in the agreement.

The employee must disclose to your company any inventions, ideas, and products of the firm. These must have been made during the period of employment.
Your company is the owner of inventions, ideas, discoveries, and work products.

Key Clauses of Intellectual Property Assignment Agreement

Assignment clause.

This requires employees to assign their inventions to your company. This will ensure you have total ownership of the intellectual property.

This could be narrowed to employee inventions only. It could be broadened to include anything the employee creates.

Therefore, your IP lawye r should include the following assignment clause into the IP agreement :

The actual assignment
The timing of the assignment
Already owned IP
“All things necessary.”
Moral Rights
Third-Party Confidentiality/Trust

Warranty Clause

Your IP lawyer should include the following warranties into the IP agreement:

The Assignor represents and warrants that:

It is the absolute owner of the Property;
It has the authority to assign the Property in full;
The Assignor has not licensed any right, title, or interest in the Property to any third party;
It has procured consent on the infringement of the Moral Rights of every author of the Property.
The Property does not infringe any Intellectual Property rights or Moral Rights.
The Assignor has no other obligations to any party inconsistent with the Agreement.
Power of Attorney Clause

You can get this clause added to the agreement. This is so that the firm can administer the ownership rights without the employee. So, this is regardless of whether the employee is willing and able to assist.

An IP assignment agreement assures investors that the IP has been transferred. It consists of the intellectual property that is required to run the business.

Engage qualified IP counsel at the outset of your company. So, this ensures that you have the freedom to operate your business with your inventions.

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IP assignment clauses in international employment contracts

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IP Assignment Clauses in International Employment Contracts Daniel Hoppe-Jänisch1 The world is growing together and keeps getting more complicated every day. Multinational corporations have worldwide operations in a variety of business segments. They employ a large number of employees in a growing number of countries. There are companies that have offices in almost every country of the world nowadays. Managing large numbers of employees in an international context can be a real challenge, particularly when a consistent and uniform handling of employees and their employment contracts is required across the corporation globally. Subtleties of local law also have to be taken into consideration, from statutory requirements regarding working time and vacation to regulatory requirements regarding remuneration, just to name but a few. One important aspect of employment contracts is the assignment of IP rights to the employer. It goes without saying that the employer must be entitled to use the employees’ work product. However, how this can be effected in various jurisdictions is not obvious in many cases. In this article, we touch on only some of the important points in a . Specific IP assignment agreements will need to be assessed on a case-by-case basis. 1 The author would like to thank Ms. Alice Pasch, White & Case Hamburg, Ms. Clara Hainsdorf, White & Case Paris, and Ms. Sarah Taylor and Mr. John Benjamin, White & Case London, for their generous contributions and their review of the article. Also, the author would like to thank Mr. Don Dowling, KL Gates New York, who came up with the idea for this article. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 2 1. Introduction The complexity of IP assignment clauses becomes clearer if one takes into account that IP rights are mainly territorial rights; legal relationships to these IP rights are therefore mainly shaped by national laws. For these reasons, it will not be possible to use a US standard IP assignment clause for employees in Europe. A number of topics have to be addressed regarding such IP assignment clauses. The following remarks are designed to point out the considerations which employers will need to bear in mind when implementing IP assignment clauses in Germany, UK and France. - The first question which comes to mind is the question of who initially owns the rights in intellectual creations made by employees during the course of their employment and how these rights, if necessary, are assigned to the employer. This includes the question which limitations to such assignments exist and how such limitations could possibly be circumvented. - The second question which is always related to IP assignment clauses is the question of remuneration. This covers in particular whether an additional payment has to be made to employees by way of consideration for the attribution or assignment of IP rights. - The third main question is whether and to what extent the parties to the employment contract are subject to other obligations such as obligations to apply for a registration of IP rights or obligations to support the other party in PTO proceedings. Even though all these questions are pressing, it is difficult to find comprehensive guidelines which address such matters. This stems, inter alia, from the fact that some IP-related statutory provisions have been drafted rather vaguely and are often therefore difficult to interpret. There is partly also a lack of clarifying and/or consistent case law. Further employment law also needs to be considered when Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 3 dealing with IP assignments in employment contracts, in particular since very broad IP clauses can be problematic from an employment law perspective. One also needs to keep in mind that a contractual agreement will be declared invalid if it contravenes the general principle of good faith. 2. Who owns IP rights and how can such rights be assigned to the employer? In the context of an international employment contract, a distinction should be made between patents or rights to inventions and copyrights on the one hand and other intellectual property rights on the other hand. This is due to the specific treatment which inventions and copyright protected works are given in various jurisdictions. The special treatment of copyrights, for instance, is based on the strong manifestation of moral rights in European copyright law. With other IP rights, there are mostly no legal provisions that prohibit an assignment or make a payment of additional compensation mandatory. 2.1 Inventions The term “invention” includes technical inventions within the meaning of Art. 1(2) of the Paris Convention for the Protection of Industrial Property. It also includes developments which are eligible for protection by patent or utility models. The legal relationship between employer and employee with regards to inventions is strongly influenced by national laws. (a) Germany The basic rule under German law is very similar to US law: An inventor initially owns the invention and the associated rights to it by virtue of the act of creation i.e. as a matter of an inventor’s natural right. This basic rule also applies in connection with employee-made inventions; the employee is the first owner of all rights connected to the invention. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 4 It is important to note that German law does not share US patent law’s concept of shop rights or hired-to-invent. However, there are provisions under German law that are not so different from these doctrines. The transfer of the rights in employee-made inventions to the employer is most peculiar in Germany. An advance assignment is not possible. Freedom of contract is generally very limited when it comes to inventions made by employees during their employment. The reason for this is that the German Act on Employee Inventions (Arbeitnehmererfindungsgesetz – ArbEG) lays down detailed and mostly mandatory provisions that leave little room for individual agreements. 1) German employee invention law distinguishes between employment-related inventions and free inventions. All inventions which either result from the employee performing his or her duties or are significantly dependent on the company’s experience or works are considered employment-related inventions. Rights to employment-related inventions originally belong to the employee. However, employers are entitled to claim the transfer of these rights to them. 2) German law requires the employee to notify the employer of the created invention in writing. The employer then has the right to claim the invention within a period of four months. Due to some recent changes in the law, the transfer of the invention to the employer takes place automatically unless the employer expressly rejects the invention within this time limit in writing. For employers, this may seem convenient because the employer then does not have to ensure a timely transfer of the invention. However, it should be pointed out that a number of obligations are created as soon as the employee notifies the employer about an Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 5 invention, for example, the employer’s obligation to apply for a patent or utility model. 3) Inventions which are not employment-related inventions are free. This means that the employee may freely decide whether he or she assigns the rights to the employer or not. Nonetheless, the employee has to communicate such inventions to the employer unless the invention obviously cannot be used in the employer’s business. The rationale behind this obligation is to enable the employer to assess whether the invention is an employment-related invention or a free invention. The employee’s freedom to dispose of free inventions is subject to an important restriction: Before the employee exploits the invention elsewhere, he or she is obliged to offer the employer a non-exclusive right of use on reasonable terms, provided the invention can be used in the employer’s business. 4) In the context of international IP assignment agreements it is important to note that it is not possible to contractually deviate from the statutory rules to the disadvantage of the employee before a particular invention has been disclosed to the employer. This means that an employment contract cannot contain stipulations which – compared to the statutory provisions of German employee invention law – disadvantage the employee. Therefore, an IP clause will be void if it is designed to have the employee assign all rights in future inventions to their employer, regardless of whether the clause is supposed to apply to free inventions or to employment-related inventions. 5) The German Act on Employee Inventions prohibits all contractual agreements which deviate from the Act in favor of the employer if these agreements are related to future employee inventions. Rights in employee inventions can especially not be pre-assigned in the employment contract. This restriction on contractual freedom cannot be avoided by use of a non-German governing law clause Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 6 because German courts consider the German employee invention law as mandatory. According to Art. 8 (1) Rome-I Regulation a law clause must not result in that mandatory provisions of the national law are derogated. (b) United Kingdom The situation differs significantly from the above in the UK. The UK Patents Act comprises specific regulations for employee inventions. 1) In contrast to German and US law, under UK law the rights in employment-related inventions belong to the employer from the outset. This means that the employer does not need to claim an employment-related invention in order to acquire the associated rights. Thus, an advance assignment clause is not necessary. 2) With respect to non-employment-related inventions, UK law resembles German law in that such inventions belong to the employee and the associated rights cannot be assigned to the employer prior to the invention’s creation. This means that an assignment clause in the employment contract would be unenforceable as far as it concerns non-employment-related inventions in terms of the UK Patents Act. 3) The UK Patents Act does not require the employee to offer the employer a non-employment-related invention. This means that the employer may typically, not force the employee to assign or license the associated rights. However, such an obligation might arise from general employment law considerations, in particular from the employee’s duties of loyalty and confidentiality to the employer. (c) France In France, the statutory provisions contained in Article L.611-7 of the French Intellectual Property Code concerning employee inventions distinguish three types of employee inventions, namely inventions Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 7 under mission, employment-related inventions beyond mission and free inventions. 1) Inventions under mission can be characterized by the act that an employee creates them (i) pursuant to an employment contract which stipulates an inventive mission as the employee’s usual work task; or (ii) while performing research tasks according to the employer’s directions. The rights in inventions under mission automatically vest in the employer so that there is no need for an assignment clause, either in advance of the invention’s creation or subsequent to it. 2) Employment-related inventions beyond mission are inventions which the employee does not create within the scope of his or her inventive mission but still relate to the employer’s business or the employee’s function within the employer’s business, e.g. because they were made by using specific in-house technologies or processes. The rights in employee inventions beyond mission belong to the employee; however, the employer enjoys the right to have them assigned in whole or in part. There is a deadline of four months from the day of notification to claim the invention. 3) All other inventions are free which means that the rights in these inventions remain with the employee. The employer cannot demand their transfer. 4) According to French law, the statutory provisions in relation to employee inventions apply unless the parties agree upon something more favorable to the employee. Therefore, a clause by which the employee assigns to the employer all rights in future employment-related inventions beyond mission or free inventions will not be enforceable. The same applies to clauses by which employees commit themselves to assign the rights as soon as they have created an invention. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 8 (d) Preliminary result It shows that the assignment of rights to employee-made inventions is particularly difficult in Germany and in France. Even though these jurisdictions provide for sufficient employer’s rights to claim all the inventions needed for their business, an advance assignment is not possible. Where an advance assignment is possible, namely with regards to inventions under mission in France and employment-related inventions in the UK, it is not necessary, because employers automatically obtain the rights in these inventions by law. 2.2 Works protected by copyright The situation differs significantly when it comes to copyright protected works. With respect to inventions, employer and employee are mainly bound by mandatory statutory provisions that leave little to no room for divergent contractual agreements. By contrast in many European jurisdictions it may be possible to establish individual provisions relating to copyrights in the employment contract. Nonetheless, the parties to the employment contract need to be aware of certain statutory rules when drafting copyright-related agreements. Broadly speaking, copyright is an intellectual property right which subsists in artistic, musical, literary and suchlike creations, provided these creations meet certain criteria. First of all, it should be pointed out that the Anglo-American copyright system and the European copyright system differ substantially from each other. The Anglo-American copyright is an economic exploitation right; it grants its holder – as the term suggests – the right to copy, to exploit the creation. Copyright holder and work’s author do not necessarily have to be identical; even though it is usually the author who first owns the copyright in the work, it can be (pre-)assigned to other individuals or legal entities. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 9 European copyright systems provide for a stronger connection between the copyright and the author of the protected work. This makes sense if one considers that even though the German Urheberrecht or the French droit d’auteur are often translated as copyright, the literal translation is author’s right. It comprises not only proprietary rights but also moral rights. In many European jurisdictions, only the proprietary rights are assignable; in others, copyrights, including the proprietary rights, cannot be assigned at all but authors may only grant others a license to exploit the protected work. Moral rights are usually not assignable and can be waived only to a limited extent. Companies need to bear this in mind when they draft IP clauses. A clause whereby the employee assigns the copyright in future works might not be enforceable in jurisdictions where the assignment of copyright is not possible. Moreover, especially in continental Europe, employment contracts should include waivers of moral rights or, where moral rights cannot be waived, determine restrictions on their exercise as far as the respective law permits this. (a) Germany When employees create a copyright protected work, by nature of their creation, they become the owner of the copyright. The employee cannot transfer the copyright to the employer, because copyright is non-assignable under German law. Moreover, German copyright law does not know the concept of work made for hire, under which the employer is deemed the author of a work that an employee created within the scope of the employment and therefore owns the copyright from the outset. However, the employee can grant the employer various exploitation rights, e.g. the right to reproduce the work or the right to distribute it. Exploitation rights can be granted exclusively or non-exclusively. An Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 10 exclusive exploitation right also excludes the author from using the work. Other than in case of employee inventions, copyright exploitation rights can be granted with regard to future creations. In fact, German courts even assume an implicit grant of certain essential exploitation rights by virtue of the employment contract; naturally, this applies only to such works which employees create within the scope of their employment contract. Nonetheless, employers should seek to obtain an express grant of exploitation rights in their employment contracts. Such an IP clause should not be worded vaguely. Rather the clause should exactly specify to what extent exploitation rights are granted. Ideally, it should name each type of exploitation that is supposed to be covered. Otherwise, only those exploitation rights will be covered which employers need in order to operate their usual business. Especially the right to license or transfer the granted exploitation rights to third parties is not always considered essential in order to conduct the ordinary business activities. Thus, it should be expressly granted in the employment contract. Furthermore, it is important to know that the grant of rights in respect of as yet unknown types of exploitation must be in writing and signed. A special provision exists for employee-made computer programs: If an employee creates software in the execution of his or her duties or according to the employer’s instructions only the employer is entitled to exercise the related proprietary rights. Thus, the employer is granted comprehensive rights with respect to all forms of exploitation by law. There is no need for a contractual agreement. It should be noted that no insightful case law has been established with regards to the question of whether and under which circumstances an employee can validly commit themselves to offer future non-work related creations to his or her employer. An IP clause Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 11 which includes such works is exposed to the risk that a court will hold it invalid or unenforceable. Besides exploitation rights the German copyright includes moral rights. These are the right to determine if, when and how the work shall be published, the right to be recognized as the work’s author and to be or not to be mentioned in publications and the right to prohibit a distortion of the work. Moral rights cannot be waived as such; however, to a certain degree, employees may contractually commit themselves to not exercise them, at least as far as the exercise would hinder the authorized commercial exploitation of the work. Employers could, for instance, not exercise their right to distribute the protected work if employees objected to this by invoking their moral right to determine whether, when and how the work is to be published. (b) United Kingdom The basic rule concerning initial ownership of copyright is the same as in the US: Authors initially own the copyright in their work. In certain scenarios UK copyright law attributes authorship – which entails copyright ownership – to certain individuals or legal entities, e.g. the producer is deemed the author of a sound recording. For employee-made copyright works UK law stipulates an exception to this general rule: Where an employee creates a literary, dramatic, musical or artistic work, or a film in the course of the employment, the employer is the first owner of the copyright in the work Therefore, an advance assignment in the employment contract is not necessary. Computer programs count as literary works. This exception provision may not be confused with the work made for hire concept; while under the work made for hire doctrine the employer is considered the author of a work, UK copyright law only refers the copyright in the work to the employer; the employee is nonetheless deemed the author. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 12 Besides economic exploitation rights, UK copyright law grants the author of a copyright protected work certain moral rights, e.g. the right to be identified as the author in publications of the work. Moral rights are non-assignable. However, employees can waive them in advance by an express statement in the employment contract. Such a waiver must be in writing and signed. Unlike with inventions, there is no statutory rule that prohibits the advance assignment of copyrights in works that employees create outside the scope of their employment. However, courts might consider such an assignment unfair on the employee and therefore declare a corresponding assignment clause void or unenforceable. (c) France With respect to the possible transfer of copyrights, French copyright law provides for very strict provisions compared to other European jurisdictions. Besides, it contains a lot of special regulations concerning certain types of copyright protected works. It parallels German copyright law in that the author of a work is usually the original owner of the connected copyright. There are some exceptions to this general rule, e.g. with respect to collective works and employee-made computer programs. However, there is no exception for other employee-made works such as a work made for hire rule. Further, moral rights are not assignable but can only be waived to a limited extent. However, unlike in German law, the proprietary rights to copyright protected works can actually be assigned to others. In the context of employment contracts it must be noted that the French Intellectual Property Code declares a global assignment of future works void. What is meant by global assignment is not so obvious. It definitely encompasses clauses that are designed to assign to the employer all propriety rights to all future copyright protected works that the employee will create in the course of the employment. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 13 Consequently, such broadly worded clauses in employment contracts will be void. However, there have been cases where courts, for instance, have upheld assignment clauses when it was possible to individualize the assigned future works. It can be seen from this that the determination of whether a particular assignment clause falls within the scope of the provision highly depends on the deciding court’s interpretation of the provision. Given this uncertainty, assignment clauses that relate to future works are always at risk of being void. It is more secure to have the employee assign the proprietary rights on a case-by-case basis or at least upon creation of the work. French law requires assignment contracts to separately list each of the proprietary rights that is supposed to be covered. Further, it must precisely define the scope and purpose of the authorized exploitation as for its duration and place. Only what is expressly agreed upon will be transferred. General clauses that globally include all rights run the risk of being invalid. (d) Preliminary result With respect to copyright protected works the three jurisdictions provide for quite different regulations. In the UK there is actually no need for an assignment of copyrights to employment-related works, whereas in France, employers cannot permissibly exploit a work unless the employee contractually assigns the proprietary rights to them, which is usually only possible once a work has been created. As regards Germany, one needs to keep in mind that employees cannot assign the copyright to works they create, but only grant their employers exploitation rights. However, unlike in French law, exploitation rights can be granted globally with respect to future employment-related works. In all three jurisdictions authors enjoy certain moral rights, which can be contractually limited to a greater or lesser extent. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 14 3. Remuneration Another crucial question is whether the employer has to make extra payments for the transfer of rights to employee-made intellectual creations. 3.1 Inventions (a) Germany According to German employee invention law, the employer has to remunerate the employee – beyond the monthly salary – in return for the rights to employee-made inventions. When the employer has obtained the rights to an invention the parties shall individually agree upon a reasonable compensation on the basis of the invention’s economic value. Each party may demand an adjustment if, at a later time, circumstances change which were decisive for determining the amount of compensation. Employees cannot validly waive their right to additional remuneration in the employment contract, because the statutory provisions cannot be modified to the employee’s disadvantage before a particular invention has been communicated to the employer. Moreover, an IP clause that stipulates a certain lump sum as remuneration for the transfer of rights over future inventions is void. Only after the employee has informed the employer of a particular invention the parties may deviate from the statutory rules. However, such individual agreements are void if they are grossly unfair. In what circumstances a contractual provision is considered grossly unfair cannot be answered universally. Neither does the Act on Employee Inventions specify the term, nor is there illuminating case law concerning this matter. A remuneration agreement is or becomes grossly unfair and thus void if the remuneration according to the agreement is considerably lower than the remuneration the employee could claim according to the statutory provisions. As a general rule it can be said that this should be considered if the agreed remuneration is Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 15 below 50% of the remuneration owed under the Act on Employee Inventions. The real problems lie in this determination, where a lot of difficult to evaluate factors have to be taken into account. Despite that, a complete waiver of the right to additional compensation is not grossly unfair per se, provided the employee is entirely aware of the waiver’s consequences. However, since courts do not assume a will to waive rights easily, complete waivers are rather exposed to the risk of being considered as grossly unfair. Many German companies have introduced so-called incentive systems with which they offer the employee inventor a payment of a certain lump sum instead of ongoing (e.g. annual) payments for a particular invention. The offer is usually made when the employee reports the invention. The amount usually depends on the invention’s estimated economic value. While some incentive systems leave it at that, others combine the payment of a lump sum with a waiver of several employee rights, e.g. the above-mentioned right to an adjusted amount of compensation. Even though employees are free to decide to be compensated pursuant to the statutory provisions of the Act on Employee Inventions instead, according to a recent survey, the majority chooses to be remunerated according to their employer’s incentive system. (b) United Kingdom Under UK patent law the employee inventor is entitled to additional compensation in exceptional circumstances only. With regards to inventions which belong to the employer from the outset, a court may – at its discretion – award the employee compensation if a patent has been granted for the invention at issue and the invention is of “outstanding benefit” to the employer. The law does not define the meaning of “outstanding benefit”; the courts demand a greater benefit than one would normally expect to arise from an employee’s work, a benefit which is “more than significant”, “out of the ordinary” or “something special”. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 16 With respect to free inventions, courts may award compensation if the employee has assigned the rights in the invention or granted an exclusive license to the employer, a patent has been obtained and the consideration the employee received for the assignment or grant is inadequate in relation to the employer’s benefit from the invention. UK courts are rather reluctant to award compensation. This is due to the difficulty of meeting the requirements for a successful remuneration claim, especially the “outstanding benefit”, on the one hand, and proving them on the other hand. To date, only one successful compensation application has been made. Nonetheless, the employee’s right to legally seek compensation cannot be excluded by means of the employment contract. Accordingly, a clause with such content would not be enforceable. (c) France The current legal situation in France is quite similar to the one in Germany. As a rule, the employer has to remunerate employees in return for the rights to their inventions. The employer cannot be released from this obligation by way of the employment contract, because only agreements that favor the employee more than the statutory provisions are permissible. The law expressly and unequivocally states the employee’s entitlement to a “additional compensation” with respect to employee inventions under mission and to a “fair price” with respect to employment-related inventions beyond mission. With respect to “additional compensation”, the French Intellectual Property Code provides that the conditions under which an employee is entitled to additional remuneration shall be determined by provisions in collective bargaining agreements, company agreements and individual employment contracts. In fact, some collective bargaining agreements in France grant employees additional remuneration only if certain requirements are met, e.g. if a patent has been filed or granted, the employer actually exploits the invention and/or the invention is of Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 17 exceptional interest to the company. However, some courts have declared such provisions inapplicable. According to these courts, the French Intellectual Property Code provides that additional remuneration is mandatory in all circumstances; the law merely permitted collective bargaining agreements, company agreements and individual employment contracts to lay down rules for calculating the amount of the compensation. Therefore, companies need to be aware of the fact that a court might declare a clause invalid if it hinges the employee’s entitlement to additional compensation on certain requirements, Contractual provisions that specify methods of calculating the compensation are, however, permissible unless they contradict mandatory terms of collective bargaining agreements. 3.2 Works protected by copyright (a) Germany With respect to works that were created within the scope of the employment contract, employees are in general not legally entitled to additional remuneration. Consequently, an IP clause of such contents will usually not evoke legal problems. Only if exploiting the work brings the employer a profit in relation to which the monthly salary is an inadequate reward, the employee may claim to be paid additional compensation. An IP clause whereby the employee waives this right will be void. (b) United Kingdom As German law, UK law does not provide employees with a right to additional compensation in return for the attribution of the copyright in work-related creations to the employer. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 18 (c) France French copyright law stipulates that the author who assigns proprietary rights has to be remunerated proportional to the assignee’s proceeds of exploiting the work. The law enumerates several cases in which the remuneration can have the form of a lump sum instead of profit-based royalties. However, there is no general exception for employee-made copyright protected works. Consequently, employees are entitled to a proportional share of the proceeds or, in case of one of the enumerated exceptions, a lump sum for the assignment of proprietary rights. Usually, an agreement according to which the employer does not have to remunerate the employee for the assignment of proprietary rights will be void. In addition, courts tend to consider that additional remuneration for copyright, like additional remuneration for inventions, should not be included in the employee salary. (d) Preliminary result Except for the UK, the employer must usually pay the employee an additional compensation for the attribution or assignment of rights to inventions. Normally, employees cannot waive their right to additional remuneration at all; they can definitely not waive it in advance. For the attribution of copyrights (UK), the transfer of proprietary rights (France) or granting exploitation rights (Germany), however, only French law requires an additional payment. Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 19 4. Other rights and obligations Besides the questions of right’s ownership and additional compensation, there are a couple of other issues that should be addressed in the context of IP rights in employment relationships. 4.1 Reporting of intellectual creations Without the information that an intellectual creation has been made the employer cannot know about his or her rights to it. Such a situation can only be avoided if employees have the duty to inform their employer of intellectual creations they have made in the course of their employment. German and French employee invention laws stipulate the employee’s obligation to immediately report a created invention to the employer. This applies to employment-related as well as free inventions, because the employer needs to be able to classify the invention in question. The relevant laws also contain provisions as to the content of the report (circumstances under which the invention was made, description of the invention etc.) and the formalities that have to be complied with. It should come as no surprise that in Germany, the employment contract cannot validly stipulate stricter requirements than the Act on Employee Inventions sets out because agreements that disadvantage the employee are only permissible after a particular invention has been reported to the employer. In the UK, there is no statute that particularly mentions the employee’s obligation to report inventions to the employer. However, such an obligation is naturally implied by the statutory provisions that vest the rights to employment-related inventions in the employer, or by the employment relationship itself. Apart from this, the employment contract may expressly stipulate the employee’s duty to report inventions to the employer. With other intellectual creations there are usually no statutory provisions that stipulate an obligation to report. Such an obligation Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 20 may be laid down by a clause in the employment contract. Otherwise, it will in most cases be implied by virtue of the employment relationship. 4.2 Registration of IP rights As opposed to copyrights, intellectual property rights that serve to protect an invention, most importantly patents need to be registered with the competent authorities in order to come into existence. The right to apply for and be granted a patent is in fact the most valuable right connected to an invention. As a general rule in European jurisdictions, the person or legal entity that holds the rights to an invention is also the one that is entitled to apply for and be granted a registered IP right for the invention at question. In an employment context this means that only the employer has the right to do so when he or she has acquired the rights to an employee-made invention. In this context, German employee invention law contains some peculiarities. As soon as the employee has reported an employment-related invention to the employer, only the employer is entitled to apply for a registration of IP rights in Germany, especially patents and utility models. Thus an employer has the sole right to apply for a registered IP right even before he or she claims the invention and thereby acquire the connected rights. It needs to be noted that this only applies to German IP rights; the right to apply for registered IP protection in other states is only transferred to the employer when he or she claims an invention. The sole right to apply for a registered IP right in Germany is accompanied by the obligation to apply for a domestic patent or utility model. The employer must file the application without undue hesitation. Again, it needs to be pointed out that this obligation arises as soon as the invention is reported to the employer. Depending on the Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 21 particular circumstances, an employer might be obliged to apply for a German patent or utility model even before he or she has decided whether or not to claim the invention. The obligation to apply for a German patent or utility model lapses in three scenarios. Firstly, if the employment-related invention has become free due to the employers rejection of it. In this case all rights connected with the invention belong ultimately to the employee. Secondly, if legitimate interests of the company necessitate the invention to be treated as a trade secret and the employer acknowledges to the employee that the invention is capable of IP protection. Thirdly and most importantly in our context, the obligation to apply for a German patent or utility model ceases if the employee has agreed that no application is to be filed. However, employers cannot be released from the obligation prior to the invention’s disclosure to them. Therefore, a corresponding clause in the employment contract will be void. In practice it is common that employees release their employer from the obligation when they decide to be treated according to their employer’s incentive system instead of according to the statutory provisions of German employee invention law. Only when the employer claims the invention, he or she also become entitled – but not obliged – to apply for a registration of IP rights abroad. However, the employee can permit the employer to do so before claiming the invention. As with most individual agreements concerning employee inventions, this is not possible in the employment contract, but only after the invention has been reported to the employer. In the context of the registration of IP rights abroad the employer is subject to a peculiar obligation: With respect to the countries for which the employer does not desire to obtain registered IP rights, he or she has to release the claimed invention to the employee so that the Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 22 employee can apply for IP protection in these countries. At the employee’s request, the employer has to support the employee in the process of acquiring IP rights abroad. However, the employer can also be released from this obligation, but only after the invention has been reported. Many German companies also include the waiver of this obligation in their incentive system. There are no suchlike obligations laid down in UK and in French employee invention law. This implies that employers may normally freely decide whether or not to apply for a patent. In particular cases, however, French and UK courts might find the employer nevertheless to be obliged to apply for a patent or at least exploit the invention in another way. This is conceivable in cases where the employee’s entitlement to additional remuneration or the amount of the additional remuneration depends on a patent or an actual exploitation of the invention. In Germany, the UK and France there are no legal provisions that speak against clauses in the employment contract obliging the employee to assist the employer in acquiring intellectual property rights for creations that are attributed to the employer. The German Act on Employee Inventions even stipulates that the employee, if requested to do so, has to assist the employer in the application proceedings and has to make the statements that are necessary in order to acquire registered IP rights. 4.3 Confidentiality Where the employer enjoys the rights to an employee-made intellectual creation, it actually goes without saying that the employee must not disclose the creation to third parties or the public. This applies to both parties as long as the final attribution of the rights is still in abeyance. The German Act on Employee Inventions as well as the Act on Unfair Competition and the French Decree on Employees’ Inventions Hoppe-Jänisch, IP Assignment Clauses in International Employment Contracts page 23 expressly state such an obligation to confidentiality as regards inventions. Where there is no explicit statutory provision, the obligation to confidentiality results from the employment relationship itself. There is no need to expressly include it in the employment contract. However, a suchlike clause will not cause validity issues. German competition law, for example, even penalizes the violation of the employee’s obligation to confidentiality. 5. Conclusion and practical advice European IP law, especially employee invention law, permits individual agreements in employment contracts only to a limited extent. Usually, it is not possible, in individual agreements, to deviate from statutory provisions that are designed to protect employees. This applies in particular to remuneration regulations with the consequence that a waiver of statutory remuneration claims is rarely possible. Many issues, particularly in respect of invention’s and copyright’s ownership, are, however, sufficiently regulated by statute. As was shown, the various IP rights are treated quite differently from each another. For IP clauses in employment contracts it follows from this that, first of all, employers should draw a clear distinction between different types of IP rights in their employment contracts. Further, it is advisable to use “staggered” IP clauses in order to absorb the peculiarities of various jurisdictions. Such clauses will in particular be useful to deal with jurisdictions where certain types of assignments or restrictions of remuneration clauses are invalid or unenforceable.

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Assignment of intellectual property rights (pro-assignee)
Improve Response Time. 81% of customers agree that Practical Law saves them time. End of Document. Resource ID -500-7124. We are experiencing technical difficulties. Please contact Technical Support at +44 345 600 9355 for assistance. An agreement for the assignment of intellectual property rights, drafted from the assignee's perspective.

Intellectual Property Assignment Agreement: A Comprehensive Guide for Your Business

Intellectual Property Assignment Agreement Template

Table of Contents

Step 1 - Identify the Parties Involved

What is An Intellectual Property Assignment Agreement?

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Key Elements to Consider for a Properly Drafted Agreement

1. Clarity of Transfer

2. Definition of Transferred Intellectual Property

3. Compensation and Payment Terms

4. Warranties and Representations

5. Confidentiality Agreements

6. Governing Law and Dispute Resolution

Drafting Your IP Assignment Agreement

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Free Intellectual Property Assignment Agreement Template

Intellectual property assignment agreement: How-to guide

What is an intellectual property assignment agreement?

Benefits of IP assignment agreement

Clear ownership

Legal protection

Assured compensation or price guarantee

No future obligations

Commercialization opportunities

Facilitates collaboration

Risk mitigation

Enhanced value

Understanding IP assignment agreements: Considerations for sellers

Choosing between an IP assignment and a licensing agreement

Value uncertainty

Limited future opportunities

What are the types of IP assignment agreements?

Patent assignment agreement or assignment of patents

Copyright assignment agreement or assignment of copyrights

Trademark assignment agreement or assignment of trademarks

Trade secret assignment agreement or assignment of trade secrets

Design assignment agreement or assignment of design

Employee or contractor IP assignment agreement

Assignment of IP in a joint venture

Who uses intellectual property assignment agreements?

Corporations and businesses

Individuals and inventors

Key provisions of an intellectual property assignment agreement

Assignment of IP

Purchase price

Recordation

No early assignment

Assignor’s representations

Indemnification

Governing law

Assignment and delegation

Counterparts; electronic signatures

Severability

Entire agreement

Effectiveness

Necessary acts; further assurances

How does an online template facilitate drafting intellectual property assignment agreements?

Simplified drafting process

Ease of customization

Clarity and consistency

Time and cost efficiency

Accessibility and convenience

Frequently asked questions

What key details are required to complete your assignment agreement?

Related categories

Assignment of Agreement

Copyright Assignment

Patent Application Assignment

Patent Assignment

Trademark Assignment

Trademark License Agreement

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