IP Assignment and Licensing
IP rights have essentially transformed intangibles (knowledge, creativity) into valuable assets that you can put to strategic use in your business. You can do this by directly integrating the IP in the production or marketing of your products and services, thereby strengthening their competitiveness. With IP assignement and IP licensing, IP owners can also use your IP rights to create additional revenue streams by selling them out, giving others a permission to use them, and establishing joint ventures or other collaboration agreements with others who have complementary assets.
Expert tip: Assignment, license and franchising agreements are flexible documents that can be adapted to the needs of the parties. Nevertheless, most countries establish specific requirements for these agreements, e.g. written form, registration with a national IP office or other authority, etc. For more information, consult your IP office .
IP rights assignment
You can sell your IP asset to another person or legal entity.
When all the exclusive rights to a patented invention, registered trademark, design or copyrighted work are transferred by the owner to another person or legal entity, it is said that an assignment of such rights has taken place.
Assignment is the sale of an IP asset. It means that you transfer ownership of an IP asset to another person or legal entity.
IP for Business Guides
Learn more about the commercialization of patents, trademarks, industrial designs, copyright.
Read IP for Business Guides
You can authorize someone else to use your IP, while maintaining your ownership, by granting a license in exchange for something of value, such as a monetary lump sum, recurrent payments (royalties), or a combination of these.
Licensing provides you with the valuable opportunity to expand into new markets, add revenue streams through royalties, develop partnerships etc.
If you own a patent, know-how, or other IP assets, but cannot or do not want to be involved in all the commercialization activities (e.g. technology development, manufacturing, market expansion, etc.) you can benefit from the licensing of your IP assets by relying on the capacity, know-how, and management expertise of your partner.
Expert tip: Licensing can generally be sole, exclusive or non-exclusive, depending on whether the IP owner retains some rights, or on whether the IP rights can be licensed to one or multiple parties.
Technology licensing agreements
Trademark licensing agreements, copyright licensing agreements, franchising agreements, merchande licensing, joint venture agreements, find out more.
- Learn more about Technology Transfer .
Understanding a deed of assignment for intellectual property
A deed of transfer is used to change the ownership of intellectual property, a common occurrence in business. Explore how and when to use one.
updated November 24, 2023 · 3min read
Understanding intellectual property in business
How to transfer intellectual property rights in business, what to include in a deed of assignment, registering new ownership, restrictions on intellectual property transfers.
Most companies have intellectual property as part of their assets, including software, product design, or copyright to white papers. Buying or selling such property is done using a document called a deed of assignment.
A large part of what a business consists of may be tied to intellectual property . It's easy to see physical property a company owns, such as a building, office furniture, or inventory, but intellectual property can be more challenging to identify.
Most businesses have intellectual property, or works created by human minds or, in some cases, by computers. Some examples of intellectual property include architectural drawings, ad campaigns, company or product names, inventions, and source code.
Examples of when transfers of intellectual property might happen include when a company is buying another company, when you are setting up an LLC and want to transfer your intellectual property into the company, or when a business buys product rights from another company or individual.
A deed of assignment can be done in one transaction, instead of one transaction for each item of intellectual property, by transferring all ownership rights of all intellectual property detailed in the deed. The document is signed by both the buyer and seller. No payment is required for it to be valid.
A deed of assignment must be in writing and should include:
- The names and addresses of the assignor and assignee
- A description of the program or product for which the rights are being transferred
- A statement that all intellectual property rights to the property are being transferred
- Signatures of the parties and the date of the agreement execution
The deed could also include the following sections, where applicable:
- Consideration, or payment, to be made to the original owner.
- Warranties, or promises that the intellectual property rights being assigned don't infringe on anyone else's intellectual property rights . For example, in a deed regarding the transfer of a copyright, this section could state that the copyrighted work is original and not owned by someone else.
- Indemnification, or promise by the seller to reimburse the assignee if there is some problem with title to the property.
- Future assignments. For example, the agreement could be ongoing, so that anything the assignor creates in the future for this product or program is also transferred to the buyer.
Although a deed of assignment transfers ownership in intellectual property , it does not change the registration of the ownership. The assignee is responsible for handling all registration requirements.
For example, if a patent is transferred via a deed of assignment, the new owner must record the change in ownership with the U.S. Patent and Trademark Office. Similarly, the transfer of a copyright is recorded with the U.S. Copyright Office.
Transfers of intellectual property must comply with U.S. laws. One obvious caveat is that you can't transfer property you don't own. Transfers must also comply with antitrust laws, which are set up to prevent one company from completely dominating an industry.
If intellectual property rights are being transferred overseas, the transfer must comply with Export Administration Regulations and the International Traffic in Arms Regulations , which are designed to protect national security and trade.
The deed of assignment can be a crucial part of a business deal or transaction. You can create a deed of assignment yourself, or you can work with an attorney .
by Brette Sember, J.D.
Brette Sember, J.D., practiced law in New York, including divorce, mediation, family law, adoption, probate and estat...
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Contracts and IP ownership
For most companies — especially small businesses, startups, and partnerships — intellectual property (IP) is either the crown jewel of the business or a key asset. For in-house counsel, this means that extra care is needed when preparing any contract that touches on IP ownership. While it seems scary, the basic concepts of IP ownership are relatively straightforward and there is much in-house counsel can do without always resorting to the use of outside counsel — if that’s even an option.
There are, however, certainly times when experienced IP counsel is helpful and necessary. With Practical Law, however, you can learn the basics of IP and IP ownership and have access to a huge library of contract templates, clauses, checklists, practice notes, drafting notes, and toolkits. And, all for far less than the cost of outsourcing all of your intellectual property contracts issues to outside counsel.
What is intellectual property and IP ownership?
There are four types of IP that in-house counsel are concerned about when drafting or reviewing agreements:
- Trade secrets
When preparing or reviewing a contract involving IP ownership, the parties are generally trying to set out the key issues — namely, “who owns what” (ownership) and “how can the IP be used” (license). More about these concepts is laid out below, but without a contract in place stating otherwise, here are the general rules for IP ownership.
Copyrights, or original works of art, are owned by the author who created the work; if multiple authors are involved, they are joint owners with an indivisible interest in the work. Patents — also known as inventions — are owned by the inventor. Trademarks are the marks used in commerce and are owned by the person or business using them to identify their goods or services. Trade secrets, also known as confidential information, are owned by the creator — mostly businesses through their employees. With trade secrets, care must be taken to keep them confidential or they lose their status as trade secrets.
IP contracts establish ownership
Of course, it’s pretty rare that a lawyer will rely on things just working themselves out based on the common law. Instead and rightfully so, they want to lay out IP ownership in a written agreement that spells out the rights and obligations of each party. This is where the hundreds of IP contract templates in Practical Law can really cut your time, effort, and cost way down. To start, you need to get familiar with the three types of intellectual property agreements: the creation of IP, the licensing of IP, and the purchase/assignment of IP.
How to create intellectual property
You can create intellectual property in a number of ways. For the purposes of most businesses, IP is created by its employees or by third parties, such as contractors hired to create IP based on specifications and direction provided by the business. While businesses own IP created by their employees — if it is part of their job to create such IP — it is not wise to leave ownership to chance.
The typical solution is an invention assignment agreement signed by the employee when they first join the company. Such an agreement covers a range of IP ownership issues, from confidentiality of company trade secrets to the assignment of any intellectual property created on the job or using company resources to the company. These agreements also require employees to disclose any inventions they claim to have invented prior to joining the company so there is no dispute down the road.
When it comes to contractors, their agreements usually contain a “work-for-hire” provision which states that any work product they turn out for the company under the contract belongs to the company. The only exceptions involve IP the contractor brings to the relationship. It continues to belong to the contractor but, if necessary, the contractor provides a license for the company to use that IP to make the work product function properly. These agreements also contain confidentiality and non-disclosure provisions to ensure that neither party reveals the confidential information of the other party.
See the Practical Law practice note Intellectual Property – Employees and Independent Contractors
Lastly, companies sometimes partner and enter into a joint development agreement to create IP that neither party could easily create on their own. Each party contributes something to the development and then the ownership and use rights are spelled out in the terms of the agreement.
How to license the IP
IP ownership also comes up in the context of licensing the IP. Many companies’ entire business comprises licensing software or other IP they have developed. To do this successfully, they must enter into software/IP licensing agreements with customers. These agreements set out, among other things:
- Ownership of the IP and any modifications or derivatives
- Who may use the licensed IP, in what manner, and is there exclusivity?
- The ability to sublicense
- Where the IP may be used
- The period of time the licensee may use the IP
- Warranties about the software
- Indemnities, primarily from the licensor against IP infringement
- Obligations not to reverse engineer the software or allow unauthorized access
- Permitted uses and prohibited uses of the IP
- How the agreement ends and what happens to the licensee’s ability to use the IP after termination
While software agreements are the obvious IP licensing contracts, intellectual property licensing arises in franchise agreements; entertainment such as movies, music, and art; NFT; and many other contexts. That is, any type of IP is subject to a licensing agreement.
How to purchase or assign intellectual property
Lastly, IP ownership can be purchased or assigned — that is, the inventor or owner of the IP can transfer it to a new owner. Note that the assignment of IP is different than licensing IP. Under an assignment, ownership and all rights are transferred. With a license , there is no transfer of ownership and only limited rights to use the IP are given.
Some common situations involving buying IP include mergers and acquisitions of the company that owns the IP or just a straightforward purchase of the IP asset alone. For example, owners can sell copyrights and trademarks, including web addresses — many so-called patent trolls buy patents out of the bankruptcy estate of a failed business. Here are three things to keep in mind when buying IP:
- Define the IP properly. What, exactly, are you buying or selling? Words will matter here.
- Representations and warranties. Drafting properly is important, especially representations around ownership of the IP being sold, warranties around non-infringement, and an indemnity if something goes wrong.
- Residual use. Does the seller have any rights to continue to use the IP? If so, what is the scope? What is the price?
Assignment of IP typically takes place when a party is contributing their IP to a joint venture or partnership , or when the founder of a technology business transfers their invention to the new business, which is generally a requirement to attract new investors. Intellectual property may be transferred to satisfy debts or a judgment, or when a subsidiary or division is “spun out” of a parent company and provided with certain IP assets to start their separate business. When assigning IP, consider these three key points in addition to those above:
- Broad assignment rights. Define what is being assigned and ensure you are getting what you think you are getting.
- Power of attorney. Generally, there will be an obligation on the part of the assignor to cooperate in taking any steps necessary to perfect the assigned rights. A power of attorney gives the assignee the ability to perfect those rights even without the assignor’s assistance.
- Dissolution . If the company folds or the joint venture fails, what happens to the IP that was contributed? You need to think this through at the beginning as it is too late to think about it when the problem hits.
Given the importance of IP to businesses — especially small business and partnerships — in-house counsel should be well versed in the contracts that govern its ownership, assignment, and licensing. It may seem daunting at first, but it is a skill you can hone relatively quickly, especially with a resource like Practical Law to back you up.
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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:
- 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.
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.
Image via Pexels by Andrea Piacquadio
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
- Future Intellectual Property Assignment
- Representations and Warranties
- Assumption of Liabilities
- 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 graduated from Yale University magna cum laude, served as a Fulbright Scholar in Italy and attended UC Berkeley School of Law. In 2023, I was named a "Legal Visionary" by the Los Angeles Times. I have broad experience in corporate transactions and in serving as outside general counsel to clients. I started my legal career in Silicon Valley and Hong Kong working on large equity and debt financings and matters for private wealth clients. After returning home to Los Angeles, I advised startup companies with formations, acquisitions and day-to-day matters such as sales contracts and licensing. More recently, I have focused on data, IT and SaaS contracts for both providers and customers. My clients include NASDAQ-listed companies, a top ranked children’s hospital and local startups.
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Unique Hybrid Background ➲ Deep Legal, Tech & Commercial Experience More by pure chance than design, I arrived late in life to pursue a career in law. My background spans more than 3 decades across Information Technology, entrepreneurship & the legal profession supporting my claim to being a 'Deep Generalist'. What is a 'Deep Generalist'? 'The professionals who develop into really great client advisors are deep generalists.' Quote from Warren Bennis. From 2013 I worked for established boutique property, finance & commercial law firms + an award-winning #newlaw firm of senior lawyers (formerly Nexus Law Group, now merged with Arch.law) before founding my digital law firm Blue Ocean Law Group in 2017. I also worked part-time for 2 years as a freelance online expert across all aspects of Australian Law with JustAnswer (H.Q. in San Francisco) and volunteered at the Caxton Legal Centre to give back to the community. Now I offer pro bono (free) legal assistance at my discretion. My achievements in the law are best reflected in the high number of settlements where civil litigation has been avoided, court judgements (incl. successful appeals) in my clients' favour & [90+] testimonials which can be seen on the blueocean.law [700+] page website which offers tons [585+] of both free & paid innovative legal products & resources. My personal experience as a client on the other side of legal matters affords me a unique perspective and goes some way to explaining my passion for the reinvention of the delivery of legal services. I am an early adopter of technology + gadgets, an avid reader and an animal lover. In January 2023, I joined the IAPP – International Association of Privacy Professionals and became a Certified Information Privacy Professional – United States by gaining the highly valued gold-standard ANSI-Accredited CIPP/US credential. I followed this up in August 2023, by obtaining the Certified in CyberSecurity qualification form ISC(2). Pre-Law Background From 1992 to 2002, I worked for Accenture as an IT Project Manager across APAC (including long-term project assignments in New Zealand & Singapore). I started a small business side hustle in 1997 and in 2003 I left Accenture to become a full-time entrepreneur in the transport industry. I later expanded into the mezzanine property development finance market as well as venturing into small-scale property development.Unique Hybrid Background
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Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.
Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.
I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.
I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.
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