intellectual property assignment meaning

• Legal GPS for Business
• All Contracts
• Member-Managed Operating Agreement
• Manager-Managed Operating Agreement
• S Corp LLC Operating Agreement
• Multi-Member LLC Operating Agreement
• Multi-Member LLC Operating Agreement (S Corp)

Intellectual Property Assignment Agreement: A Comprehensive Guide for Your Business

LegalGPS : August 2, 2023 at 8:43 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.

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:

Defining the Purpose

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!" .

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.

Step 1 - Identify the Parties Involved

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."

Step 2 - Specify the Assigned Intellectual Property

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]."

Step 3 - Describe the Transfer of Rights

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."

Step 4 - Detail Compensation and Payment Terms

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]".

Step 5 - Include Confidentiality Clauses

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."

Step 6 - Determine Governing Law and Dispute Resolution Process

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]."

Tips for Avoiding Common Mistakes and Pitfalls

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. So here's to smoother operations and peace of mind!

Always remember, we're in this together - as you navigate the business world, consider us your legal co-pilot, happy to guide you on your journey.

• Marketplace
• Case Studies
• Join Provider Network

Intellectual Property Assignment Agreements & Licenses

Intellectual property (IP) can be just as valuable as—or even more valuable than—tangible property. Many companies make money exclusively through marketing products based on intellectual property rights. That’s why it is so important to protect your intellectual property through patents, trademarks, copyrights, and other legal devices that keep your intellectual property safe.

However, once you have secured your intellectual property rights, it is sometimes more convenient or valuable to let someone else use them in exchange for a fee, which is why intellectual property agreements and intellectual property contracts exist. These documents are complex agreements that determine the manner in which third parties can use your intellectual property. Intellectual property agreements and intellectual property contracts require careful negotiation, and owners of intellectual property should conduct these negotiations with the support of an experienced intellectual property lawyer. Through Priori, you can connect with a vetted a lawyer who can help you draft and negotiate an intellectual property agreement or an intellectual property contract.

Understanding Intellectual Property Agreements & Intellectual Property Contracts

Because you have the right to confer your intellectual property rights to other parties, intellectual property agreements can take one of two basic form: assignment agreements and IP license agreements.

About Assignment Agreements

Under an intellectual property assignment agreement, you permanently transfer some or all IP rights to the assignee in exchange for a specified sum. Essentially, you sell the rights to a third party the same way that you could sell physical property for a permanent transfer. Generally, you relinquish all control, involvement, and claim on the intellectual property rights transferred.

About Intellectual Property Licensing

Under an intellectual property licensing agreement (also known as an intellectual property license or an intellectual property license agreement), you retain ownership of your patent, copyright, or trademark, but you give another party permission to use some or all of your intellectual property rights for a specific amount of time for a fee or royalty. These intellectual property contracts typically specify termination dates and procedures.

There are several types of intellectual property licenses embodied in a typical intellectual property agreement. The following three are the most common:

• Exclusive License.  You agree not to grant any other licenses of the invention and rights concerned, as well as not to use the technology yourself.
• Sole License . You agree not to grant any other licenses of the invention and rights concerned, but you can use such rights yourself.
• Non-Exclusive License . You agree to give the licensee certain rights, but you also reserve the right to grant licenses of the invention and rights concerned to third parties or to use them yourself.

You can also combine elements of these three types of intellectual property agreements, such as by giving an intellectual property license for exclusive rights in certain geographic areas. You can review a sample patent license agreement in Priori's Document and Form Learning Center . You can also learn more about software licenses here . 

Intellectual Property Assignment Agreement vs. Intellectual Property License

Which is better, an intellectual property assignment agreement or an intellectual property license? The reality is that there are pros and cons to each choice, depending on your needs and interests. Most of the time, IP holders want to maintain control of their IP, and they choose intellectual property licensing. This is advantageous because you can determine the manner in which your IP is used and change partners if a partnership isn’t advantageous. Also, intellectual property licensing allows you to produce a steady income from your IP over a particular time period and possibly confer the same rights to multiple users.

Intellectual property assignment agreements can also have its advantages, however. If you assign intellectual property to a third party, you no longer have any responsibility towards the product. That means you cannot generally be sued for problems relating to your IP and you are not responsible for any maintenance fees. Intellectual property assignment is generally more appropriate when you are selling your business or leaving a field entirely.

Priori Pricing

Depending on the complexity of your needs, the cost of drafting intellectual property licensing or intellectual property assignment agreements may vary. Priori attorneys typically create flat-rate packages ranging from $400 to $1,500 for relatively straightforward intellectual property agreements. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and receive a free price quote from one of our lawyers.

How does an exclusive license differ from an assignment?

While both exclusive intellectual property licenses and intellectual property assignment agreements give exclusive exercise of that right to another person in exchange for monetary compensation, an exclusive license is much more limited than an assignment. If you assign an IP right to another person, you permanently transfer that right and would have to repurchase it in order to use it again.

An IP license is generally subject to a certain term and possible renewal. For that reason, you generally get more money upfront with an assignment. In addition, unless otherwise stated in the contract, an exclusive license cannot generally be handed off to a third party without your permission, but if you assign that right to someone else, they can then license or sell it as they see fit.

What is an implied license?

In certain circumstances, an implied IP license arises without the existence of a formal licensing agreement if the conduct of the parties indicates that the IP right holder intended to license certain rights to the other party. Often, courts grant implied licenses in cases where one party created a copyrighted work at the request of another under a contract that did not explicitly confer the copyright to the purchaser after payment and completion of the work.

Get started by telling us a little bit about your legal needs and a member of our team will begin working on your matchmaking process.

Content Hub

Commercial Templates

Intellectual Property Assignment Agreement

Nov 2, 2022

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another.

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another. The agreement may also be referred to as an intellectual property transfer agreement, an IP assignment agreement or an IP transfer agreement.

When should you use an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement should be used whenever transferring the rights in intellectual property ( IP ). There are a number of situations where you may need to do this. The most common for SMEs is where an individual has done work for a company as a consultant without using a consultancy agreement with the result that the consultant and not the company, owns the IP in the work. It is also necessary to transfer IP where founders create IP before incorporating or being employed by a company and, as a result, title to the IP vests in the founder.  

Why is an Intellectual Property Assignment Agreement important and why should you use it?

Investors in early stage companies will often require the company and key employees to give warranties confirming that the company owns all material IP used by the company. Any IP not owned by the company will need to be transferred to the company before the investment is completed. Failing to transfer the IP can materially impact the valuation of the company or, in extreme cases, lead investors to pull out of the transaction.

It is necessary to use a written agreement for an assignment of certain types of IP (such as copyright) to be effective. Further, it is important to ensure that the agreement is an enforceable contract. For the contract to be enforceable there must be some form of consideration paid in exchange for the IP. The amount of consideration payable will depend on the situation in which the IP is being transferred. If a consultant or founder is transferring IP that should have been owned by the company, the consideration should be a nominal amount, e.g. £1, which is deemed to have been received by the assignor (note that some form of consideration is required for the agreement to be an enforceable contract). The IP can, however, be transferred for valuable consideration or as part of an asset sale.

An IP assignment will also include warranties to confirm that the assignor is the owner of the intellectual property being transferred and that the assignor has the right to transfer the intellectual property. Transferring intellectual property without these assurances means that your company will have limited or no recourse should it transpire that the assignor did not own or have the right to transfer the intellectual property.

What are the common pitfalls of an Intellectual Property Assignment Agreement?

Where possible, it is important to clearly describe the IP being transferred. IP by its nature is not physical so failing to accurately describe the IP can result in disputes about what has been transferred. 

Further, there are several different types of IP (copyright, patents, trade marks and designs). Certain IP rights can also be registered. Depending on what is being transferred it may be necessary to take additional steps to perfect the transfer (for example notifying the appropriate register of the transfer). The agreement should include a requirement that the assignor takes the necessary steps to perfect the transfer and specify which party is required to pay any associated costs (such as registration fees).

In addition where copyright is being transferred, the assignor should also ensure that the assignor waives their moral rights (such as the right to attribution) in respect of the copyrighted work.

Disclaimer: Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

Book a personalized demo

Enterprise ready..

ISO 27001 certified and GDPR compliant. Data encrypted at rest with AES 256 and in transit with TLS 1.2+.

For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, check out our Privacy Policy .

Related articles

Contract Variation Agreement

Oct 26, 2022

Master Service Agreements explained

Jul 12, 2023

Non Disclosure Agreements - What Are They, and Do I Need One?

Nov 30, 2023

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?

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).

Intellectual Property: Assignments and Transfers | Practical Law

Intellectual Property: Assignments and Transfers

Practical law practice note w-005-5845  (approx. 23 pages).

Assignment of IP

Fact sheet: commercialising intellectual property - assignment agreements.

This fact sheet deals with the assignment of Intellectual Property (IP) rights. An assignment can be beneficial in many business circumstances. Examples may include your company not having the means to undertake commercialisation or preferring to receive a once-off lump sum payment for the innovative technology. This implies having no further concerns regarding the maintenance and enforcement of the IP rights.

Download Fact sheet

Infographic: Commercialising IP - Assignment Agreements

An IP assignment is a transfer of ownership of an intellectual property right, such as a patent, trade mark or copyright, from one party (the assignor) to another party (the assignee). This infographic adds together the benefits, risks and the key elements of assignment agreements.

Download Infographic

IP Guide: Your Guide to IP and Contracts

IP can be transferred or licensed, offered to enter into cooperation agreements or contributed as capital in a joint venture. Protecting and managing IP through well-drafted agreements is key for business success. Therefore, the purpose of this guide on IP and contracts is to be a useful tool regarding IP exploitation and management. It aims to help businesses better understand contracts in the IP field and to get an idea on different key points and how these should be drafted.

Download IP Guide

Share this page

IP Assignments: Nunc Pro Tunc Assignments in Patent, Trademark, and Copyright Law

March 22, 2023 By John DiGiacomo

Like any valuable business asset, patents, trademarks and copyrights can be sold, assigned and licensed. Indeed, assignment and licensing is common with respect to intellectual property. In legal terms, an “assignment” is a transfer of ownership, either full ownership or partial. In basic terms, a nunc pro tunc is a type of assignment that is backdated. Nunc pro tunc is Latin meaning “now for then.”A nunc pro tunc assignment will be signed on a particular date, but parties will deem the assignment to have been granted on some earlier date.

For a Trademark registered on May 1, 2017, an example of how a nunc pro tunc assignment provision might look like this:

Now, therefore, for good and valuable consideration, ASSIGNOR agrees that ASSIGNOR hereby assigned unto ASSIGNEE nunc pro tunc effective as of October 1, 2020, all right, title and interest in and to the May 1, 2017 trademark described herein … In testimony whereof, ASSIGNOR, has signed this instrument this 1st day of October 2020.”

In this example, the assignment is deemed to have been granted on May 1, 2017, but has an effective date of October 1, 2020.

In business terms, nunc pro tunc assignments are often used where past IP assignments are made verbally or via conduct. In the rush to get IP “to market,” it is not uncommon for assignments to be granted, but not reduced to writing. Nunc pro tunc assignments are also commonly used to bridge gaps in the “chain of title” for IP. This can happen when corporations and/or assets are sold, but proper paperwork is missing. Purchasers believe that they have ownership to certain patents, trademarks, or copyrights, but the missing documents cause “gaps” in the chain of title. These “gaps” can be cured by obtaining a nunc pro tunc assignment from the original owner of the IP. In the same manner, nunc pro tunc assignments are often used as part of settlements for litigation involving claims of patent, trademark and/or copyright infringement or disputes over ownership

For litigation purposes, nunc pro tunc assignments are often used to give a party legal standing to initiate litigation. To have “standing” to initiate litigation, a party must have some ownership interest in the patent, trademark or copyright. However, for courts, “standing” is based on the effective date of the assignment, not the earlier date listed in the nunc pro tunc assignment.

However, for other purposes, the earlier assignment date listed in the nunc pro tunc assignment is the credited date. For example, an assignment of a registered trademark must be recorded with the US Patent & Trademark Office (“USPTO”). This is done electronically. The assignment must be uploaded along with the proper recordation form and applicable fee. For the USPTO, the trademark assignment is based on the date designated for the assignment rather than the date of execution of the nunc pro tunc assignment.

So, when should you use a nunc pro tunc assignment for a trademark? The most common situations include:

• When a trademark was previously assigned but not recorded – Sometimes, an assignment of trademark ownership may occur but the paperwork is not properly filed or recorded with the United States Patent and Trademark Office (USPTO). In this case, a nunc pro tunc assignment can be used to correct the oversight and retroactively assign the trademark to the new owner.
• When the original assignment was not effective – A nunc pro tunc assignment can also be used to correct a defective assignment. For example, if the original assignment was not properly executed or lacked essential terms, the nunc pro tunc assignment can be used to correct those issues and make the assignment retroactively effective.
• When there is a change in business structure – A nunc pro tunc assignment may be necessary when there is a change in the business structure of the trademark owner, such as a merger or acquisition. In this case, the new owner may need to retroactively assign the trademark to themselves to ensure that they have proper ownership and control over the trademark.
• When there is a dispute over ownership – If there is a dispute over the ownership of a trademark, a nunc pro tunc assignment may be used to resolve the issue. This can occur when multiple parties claim ownership of a trademark, or when there is confusion over who actually owns the trademark.
• When the trademark was abandoned – In some cases, a trademark may have been abandoned by the previous owner. If this occurs, a nunc pro tunc assignment may be used to assign ownership to the new owner retroactively. However, it is important to note that there are strict time limits for filing a nunc pro tunc assignment in these cases.

It is important to note that a nunc pro tunc assignment should only be used when there is a genuine need to correct an error or oversight in the assignment of a trademark ownership. It is not a tool to be used to cover up illegal or unethical behavior.

In addition, a nunc pro tunc assignment can be a complex legal process that requires the assistance of an experienced trademark attorney. The attorney can help ensure that the assignment is executed properly and in compliance with all legal requirements.

Contact Revision Legal

For more information, contact the IP and  business lawyers at Revision Legal at 231-714-0100.

Put Revision Legal on your side

What is an Intellectual Property Assignment Agreement?

By June Ahern Legal Project Manager

Updated on August 4, 2020 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

Key Clauses in an Intellectual Property Assignment Agreement

Key takeaways.

As an individual or business owner, there may be times when you want to assign your intellectual property (IP) rights to another individual or business. Alternatively, you may want another entity to assign their IP rights to you. IP is a term which is applied broadly to something which is created, invented or designed. IP is sometimes referred to as ‘property of the mind’. Assigning your IP rights to another party is most often seen in the context of an employment contract, whereby any IP produced in the course of employment is automatically assigned to the employer. You may need another individual or entity to assign their IP rights to you if you engage a service provider to carry out work for you, such as:

• designing your logo; or 
• writing the code for your app. 

This article explains: 

• what an IP assignment agreement is; and 
• why an IP assignment is important in defining and protecting your rights.

An IP assignment agreement is a contractual agreement which facilitates the transfer of IP from one party to another. The party transferring the IP interest is the assignor . The party receiving the IP interest is the assignee . There are several important clauses which you should include in an IP assignment agreement.

The Assignment Clause

Assignment of IP rights may t ake place in return for a sum of money. However, this is not always so, as in the case of employees automatically assigning their IP rights to their employer. The clause should make it clear that all current or future rights, titles or interest in the IP are conveyed to the assignee.

Timing of the Assignment

It is important to state that all rights, titles or interest in the IP are conveyed to the assignee immediately upon creation of the IP. The assignor must agree to do ‘all things necessary’, including signing required documents, to facilitate a successful transfer of IP.

Assignment of Moral Rights

The assignor must also consent to the assignment of their moral rights in the IP. Moral rights are the rights of a creator to control, protect and enforce the artistic integrity that subsists in the IP. This includes the right:

• of the assignor to attribute their name to the work;
• against false attribution from other parties; and
• against derogatory treatment.

Third-Party Confidentiality

To the extent that any rights held by the assignor under third-party confidentiality agreements cannot be assigned, the assignor must agree to hold such rights on trust for the benefit of the assignee.

The assignor must represent and warrant that it:

• is the sole and absolute owner of the IP;
• has the authority and capacity to assign the IP in full;
• has not licenced or encumbered any right, title or interest in the IP to any third party;
• does not infringe any third-party’s IP rights or moral rights; and
• has no other obligations to any third-party which are inconsistent with the rights and obligations as set out in the intellectual property assignment agreement.

A warranty clause is important, as it protects the assignee from liability in the event that the assignor attempts to transfer IP which belongs to another party, whether intentionally or not.

A comprehensive intellectual property assignment agreement is important to d efine and protect your position in either assigning or receiving IP. A well-drafted intellectual property assignment agreement will protect you against any claims of IP infringement from third-parties and ensure that you have full ownership rights of the IP. If you have any questions on intellectual property assignment agreements, please contact LegalVision’s intellectual property lawyers on 1300 544 755 or fill out the form on this page.

We appreciate your feedback – your submission has been successfully received.

Register for our free webinars

Demystifying startup funding: strategies for growth, accc enforcement and priorities: key takeaways for in-house counsel, sponsoring overseas workers for your hospitality business, safeguarding vulnerable clients: mandatory ndis & in-home aged care reporting, contact us now.

Fill out the form and we will contact you within one business day

Related articles

What is the Difference Between an IP Licence and an Assignment?

What Do I Include in Employment Contracts to Protect My IP?

Drafting Sales Terms and Conditions: How Do You Write an Intellectual Property Clause?

Can I Assign or License Copyright?

We’re an award-winning law firm

2023 Fast Firms - Australasian Lawyer

2022 Law Firm of the Year - Australasian Law Awards

2021 Law Firm of the Year - Australasian Law Awards

2020 Excellence in Technology & Innovation Finalist - Australasian Law Awards

2020 Employer of Choice Winner - Australasian Lawyer

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.

Find out more about intellectual property basics

by   Brette Sember, J.D.

Brette is a former attorney and has been a writer and editor for more than 25 years. She is the author of more than 4...

Read more...

Updated on: November 24, 2023 · 3 min 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 .

You may also like

How to write a will: A comprehensive guide to will writing

Writing a will is one of the most important things you can do for yourself and for your loved ones, and it can be done in just minutes. Are you ready to get started?

April 25, 2024 · 11min read

What is a power of attorney (POA)? A comprehensive guide

Setting up a power of attorney to make your decisions when you can't is a smart thing to do because you never know when you'll need help from someone you trust.

May 7, 2024 · 15min read

• Find a Lawyer
• Ask a Lawyer
• Research the Law
• Law Schools
• Laws & Regs
• Newsletters
• Justia Connect
• Pro Membership
• Basic Membership
• Justia Lawyer Directory
• Platinum Placements
• Gold Placements
• Justia Elevate
• Justia Amplify
• PPC Management
• Google Business Profile
• Social Media
• Justia Onward Blog

Assignment of Copyrights & Legal Implications

Copyright gives authors a bundle of personal property or economic rights in an original work of authorship. These rights include the rights to reproduce, create derivative works, distribute work to the public, publicly perform a work, publicly display visual works, and digitally transmit sound records. They belong exclusively to a copyright holder.

Usually, the copyright holder is the person who created the work. However, any of these economic rights, or any part of these economic rights, can be transferred. Under the Visual Artists Rights Act (VARA), an artist’s moral rights in a work of fine art can be waived but not assigned.

An original owner who assigns their copyright to someone else will not retain any right to control how the work is used.

The transfer of economic rights may be on an exclusive basis, which requires a written agreement, or a non-exclusive basis, which does not require a written agreement. Most commonly, this transfer is accomplished by assignment or license. Unlike a license in which the copyright owner maintains their ownership, an assignment is similar to a sale. The original copyright owner sells the rights to a third party and cannot control how the rights are used, just as they would not be able to control how personal property that they sold was used once it was transferred.

Generally, a license is preferable if a copyright holder expects to continue exercising interests and control over the work. For example, if you assign your copyright in a song to a music producer, the decision about whether to allow a film studio to use your song in a film will belong to the producer, not to you. If you license your copyright in a song in a limited capacity to a music producer, however, you will continue to be able to license your copyright in the song to a film producer.

Assignments can be used for many different purposes, such as security for debt, as an asset passed to heirs, or as part of the distribution of assets after a bankruptcy proceeding. Once you assign your rights to somebody else, however, you are permanently giving away your right to control the work. That means if you try to exercise any of the rights you have assigned, you are committing copyright infringement even though you created the work. If you assign your copyright to somebody else and regret the loss, you may be able to buy your copyright back from that person, but whether or not to sell it back to you is up to the assignee.

How Is Copyright Assigned?

Under Section 204 , a transfer of ownership is only valid if the instrument, note, or memorandum of transfer is in writing, signed by the copyright owner or their duly authorized agent. Generally, a certificate of acknowledgment is not required for the transfer to be valid, but it can be used as prima facie evidence that a transfer was executed if it is issued by someone authorized to administer oaths in the United States or, if the transfer is executed abroad, if the certificate is issued by a United States diplomatic or consular official, or a person authorized to administer oaths who also provides a certificate.

Formally recording an assignment with the Copyright Office is not required but can be advantageous.

You do not have to record an assignment in order to assign the interest. However, there are advantages to recording the assignment, such as creating a public record of the transfer details, giving constructive notice to members of the public, establishing priority of rights when there are conflicting transfers of ownership, validating the transfer of the copyright against a third party, or in some cases perfecting a security interest.

Last reviewed October 2023

Intellectual Property Law Center Contents   

• Intellectual Property Law Center
• Copyright Infringement & Related Lawsuits
• Copyright Ownership Under the Law
• Assignment of Copyrights & Legal Implications
• Copyright Licensing Under the Law
• Copyright Registration Under the Law
• Safe Harbors for Online Service Providers Under Copyright Law
• Criminal Copyright Infringement Laws
• Enforcement of Copyrights Through Lawsuits & Criminal Charges
• Fair Use Defense to Copyright Infringement Lawsuits
• Software Development Agreements & Related Legal Concerns
• End-User License Agreements Imposing Legal Restrictions on Software
• Lists, Directories, and Databases Under Copyright Law
• Photos of Buildings and Architecture Under Copyright Law
• Photos of Copyrighted or Trademarked Works & the Fair Use Defense to Infringement Lawsuits
• Works in the Public Domain After Copyrights Legally Expire
• Copyrights and Credits for Songwriters Under the Law
• Music Samples and Copyright Infringement Lawsuits
• Playing Music in Stores or Restaurants — How to Avoid Copyright Infringement Lawsuits
• Consignment Sales by Artists to Stores & Legal Protections
• Destruction of Copyrighted Works & Limited Legal Protections
• Copyright Legal Forms
• Trademark Law
• Trade Secret Law
• Choosing Among Patent, Copyright, and Trademark for Legal Protection
• Intellectual Property Law FAQs
• Find an Intellectual Property Lawyer

Related Areas   

• Small Business Legal Center
• Entertainment Law Center
• Communications and Internet Law Center
• Sports Law Center
• Related Areas
• Bankruptcy Lawyers
• Business Lawyers
• Criminal Lawyers
• Employment Lawyers
• Estate Planning Lawyers
• Family Lawyers
• Personal Injury Lawyers
• Estate Planning
• Personal Injury
• Business Formation
• Business Operations
• Intellectual Property
• International Trade
• Real Estate
• Financial Aid
• Course Outlines
• Law Journals
• US Constitution
• Regulations
• Supreme Court
• Circuit Courts
• District Courts
• Dockets & Filings
• State Constitutions
• State Codes
• State Case Law
• Legal Blogs
• Business Forms
• Product Recalls
• Justia Connect Membership
• Justia Premium Placements
• Justia Elevate (SEO, Websites)
• Justia Amplify (PPC, GBP)
• Testimonials

• About of Intellectual Property

IP Training

What is intellectual property.

Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.

IP is protected in law by, for example, patents , copyright and trademarks , which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.

Explore the main IP types and how the law protects them.

Types of intellectual property

Do you know what the difference is between a patent and an industrial design, how to protect your photo with a copyright, or why you would want to obtain a protected designation of origin? Discover everything you ever wanted to know about IP rights.

A patent is an exclusive right granted for an invention. Generally speaking, a patent provides the patent owner with the right to decide how - or whether - the invention can be used by others. In exchange for this right, the patent owner makes technical information about the invention publicly available in the published patent document.

Copyright is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings.

A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. Trademarks date back to ancient times when artisans used to put their signature or "mark" on their products.

Industrial designs

An industrial design constitutes the ornamental or aesthetic aspect of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color.

Geographical indications

Geographical indications and appellations of origin are signs used on goods that have a specific geographical origin and possess qualities, a reputation or characteristics that are essentially attributable to that place of origin. Most commonly, a geographical indication includes the name of the place of origin of the goods.

Trade secrets

Trade secrets are IP rights on confidential information which may be sold or licensed. The unauthorized acquisition, use or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.

WIPO runs workshops, seminars and training courses throughout the year, both in Geneva and worldwide.

Year-round roving seminars help businesses, researchers, lawyers and innovators stay on top of latest developments in global IP services.

Browse seminars and workshops

The WIPO Academy is the center of excellence for IP education, training and skills-building for WIPO member states, in particular developing countries, least-developed countries (LDCs) and countries in transition. The Academy works to help build human capacity in IP, which is essential to innovation and creativity.

Access the WIPO eLearning Center Explore programs

Test your knowledge about intellectual property with an IP quiz!

Take a quiz

IP is relevant for everyone everywhere. Learn how IP rights benefit business, universities, and others.

Learn how an understanding of IP can help businesses become more competitive and manage related risks.

Universities

Universities and public research institutions are the factories of the knowledge economy. Discover how IP policies and knowledge transfer are critical to their work.

Indigenous Peoples

Discover how WIPO engages with indigenous peoples and local communities with a view to better protect their traditional knowledge (TK) and traditional cultural expressions (TCEs).

Judiciaries

Find out how WIPO is supporting judiciaries in dealing with the novel legal questions that often arise from IP disputes in a rapidly changing technological environment.

IP is an important driver for innovation. Find out how IP rights help us addressing the world's most pressing issues, such as global health, climate change and many others.

Genetic Resources, Traditional Knowledge and Traditional Cultural Expressions

Explore the latest developments and best practices in linking IP with GRs, TK and TCEs.

Global Health

Learn how global health is linked to access to medical technologies, innovation, technology transfer and trade, and how IP can contribute to meeting the world’s most pressing health needs.

Climate Change

Discover how WIPO addresses climate change and supports environmentally-friendly economic growth, including green innovation and the diffusion of green technologies.

Learn all the latest developments in the field of economics and IP, and how different IP policy choices can affect national economies.

Sustainable Development Goals

IP is a critical incentive for innovation and creativity, which in turn are key to the United Nations SDGs success.

Gender Equality

Men and women are equally as creative and innovative. Yet, women remain under-represented in many areas. Find out how WIPO works to tackle this issue.

Competition Policy

Find out why IP rights are inherently pro-competitive and how they benefit the society by encouraging businesses to improve their products and services.

Successful use of IP can benefit any business. Discover how IP rights can be used for business development in different spheres, such as mobile technology, tourism, or sport.

Frontier Technologies

Find out how frontier technologies, including AI, are changing how we do business, how we innovate and create.

Mobile Apps

Learn how IP mechanisms help mobile application developers and publishers to generate more income from their creations.

IP is the basis for key business transactions that secure the economic value of sports and push the industry forward.

Learn how you can benefit from the IP system if you have a business in the tourism sector.

Assignment Of Intellectual Property Agreement

Jump to Section

What is an assignment of intellectual property agreement.

An assignment of intellectual property agreement is a contract that transfers the intellectual property rights (For example, patents, trademarks, industrial designs, or copyrights.) from the creator to another entity. The intellectual property rights holder may transfer all or part of their rights. The transfer of intellectual property rights is made upon a payment of a lump sum or royalties.

Employees hired for research and development roles or other technical areas sign intellectual property assignment agreements to assign to the company any ideas, work products, or inventions related to the company business that they may create during their employment.

Common Sections in Assignment Of Intellectual Property Agreements

Below is a list of common sections included in Assignment Of Intellectual Property Agreements. These sections are linked to the below sample agreement for you to explore.

Assignment Of Intellectual Property Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.2 5 gabriel_ex1002.htm ASSIGNMENT OF INTELLECTUAL PROPERTY , Viewed October 21, 2021, View Source on SEC .

Who Helps With Assignment Of Intellectual Property Agreements?

Lawyers with backgrounds working on assignment of intellectual property agreements work with clients to help. Do you need help with an assignment of intellectual property agreement?

Post a project  in ContractsCounsel's marketplace to get free bids from lawyers to draft, review, or negotiate assignment of intellectual property agreements. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.

Need help with an Assignment Of Intellectual Property Agreement?

Meet some of our assignment of intellectual property agreement lawyers.

www.linkedin/in/michaelbmiller I am an experienced contracts professional having practiced nearly 3 decades in the areas of corporate, mergers and acquisitions, technology, start-up, intellectual property, real estate, employment law as well as informal dispute resolution. I enjoy providing a cost effective, high quality, timely solution with patience and empathy regarding client needs. I graduated from NYU Law School and attended Rutgers College and the London School of Economics as an undergraduate. I have worked at top Wall Street firms, top regional firms and have long term experience in my own practice. I would welcome the opportunity to be of service to you as a trusted fiduciary. In 2022 I was the top ranked attorney on the Contract Counsel site based upon number of clients, quality of work and top reviews.

I have been practicing law for 35 years. In addition to my law degree, I hold an MBA. I've created six companies, currently act as outside counsel to another 12, and have been an advisor to more than 500 startups and entrepreneurs.

I love contracts - and especially technology-related contracts written in PLAIN ENGLISH! I've worked extensively with intellectual property contracts, and specifically with IT contracts (SaaS, Master Subscriptions Agreements, Terms of Service, Privacy Policies, License Agreements, etc.), and I have built my own technology solutions that help to quickly and thoroughly draft, review and customize complex contracts.

Business-minded, analytical and detail-oriented attorney with broad experience in real estate and corporate law, with an emphasis on retail leasing, sales and acquisitions and real estate finance. Extensive experience in drafting complex commercial contracts, including purchase and sale contracts for businesses in a wide variety of industries. Also experienced in corporate formation and governance, mergers and acquisitions, employment and franchise law. Admitted to practice in Colorado since 2001, Bar No. 33427.

Michigan and USPTO licensed attorney with over 20 years of experience on counseling clients in the fields of intellectual property, transactional law, technology involvement, negotiations, and business litigation.

Attorney with over 10+ years' experience and have closed over $1 Billion in real estate, telecommunications, & business transactions

I am an attorney with over 13 years experience licensed in both Illinois and Indiana. I spent the early part of my career as a civil litigation attorney. Eventually, I moved into an in-house role, specifically as general counsel, to help companies avoid the pains of litigation. In doing so, I gained significant experience in executive leadership, corporate governance, risk management and cybersecurity/privacy. I bring this wealth of experience to my client engagements to not only resolve the immediate issue, but help implement lasting improvements in practices to avoid similar problems going forward.

Find the best lawyer for your project

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

Intellectual Property lawyers by top cities

• Austin Intellectual Property Lawyers
• Boston Intellectual Property Lawyers
• Chicago Intellectual Property Lawyers
• Dallas Intellectual Property Lawyers
• Denver Intellectual Property Lawyers
• Houston Intellectual Property Lawyers
• Los Angeles Intellectual Property Lawyers
• New York Intellectual Property Lawyers
• Phoenix Intellectual Property Lawyers
• San Diego Intellectual Property Lawyers
• Tampa Intellectual Property Lawyers

Assignment Of Intellectual Property Agreement lawyers by city

• Austin Assignment Of Intellectual Property Agreement Lawyers
• Boston Assignment Of Intellectual Property Agreement Lawyers
• Chicago Assignment Of Intellectual Property Agreement Lawyers
• Dallas Assignment Of Intellectual Property Agreement Lawyers
• Denver Assignment Of Intellectual Property Agreement Lawyers
• Houston Assignment Of Intellectual Property Agreement Lawyers
• Los Angeles Assignment Of Intellectual Property Agreement Lawyers
• New York Assignment Of Intellectual Property Agreement Lawyers
• Phoenix Assignment Of Intellectual Property Agreement Lawyers
• San Diego Assignment Of Intellectual Property Agreement Lawyers
• Tampa Assignment Of Intellectual Property Agreement Lawyers

ContractsCounsel User

intellectual property contract agreement

Location: california, turnaround: over a week, service: drafting, doc type: ip assignment agreement, number of bids: 7, bid range: $200 - $1,200, user feedback:, ip rights agreement, location: west virginia, turnaround: less than a week, number of bids: 5, bid range: $240 - $1,500, want to speak to someone.

Get in touch below and we will schedule a time to connect!

Find lawyers and attorneys by city

Trending News

Related Practices & Jurisdictions

• Corporate & Business Organizations
• All Federal

Protecting your company’s intellectual property rights is essential during all stages of your company’s growth.  One of the first steps you can take to protect your company’s intellectual property rights is to have all advisors, consultants, contractors and employees of your company enter into Proprietary Information and Inventions Assignment Agreements (“PIIAs”), also known as Confidential Information and Inventions Assignment Agreements. 

In the rush of starting up a new business and bringing on your initial set of consultants and employees, it may be easy to overlook the importance of properly documenting the company’s relationship with these individuals related to ownership of intellectual property.  However, as your company grows and attracts new investors, strategic partners and potential buyers, these other third parties will want you to be able to demonstrate that your company clearly owns its intellectual property and will ask if your advisors, consultants, contractors and employees have signed PIIAs.

The fact that an invention is created during the course of an individual’s employment with a company does not, in and of itself, give the company the right to all intellectual property related to such invention.  In its Stanford v. Roche decision in 2011, the Supreme Court confirmed the general rule that the original inventor owns the inventions they make, unless the inventor makes an express assignment of those rights to another individual or entity. 

In light of this, failure to have PIIAs in place represents a risk of potential intellectual property ownership disputes and can negatively impact your company’s ability to raise capital.  Investors may also require you to go back to any current employees and have them sign a PIIA if it was not executed when the employee joined the company.  Requiring an employee to sign such an agreement after he or she has already been with the company for some time can create a situation in which the employee has leverage to ask for something additional in return.

As indicated by its name, PIIAs address two main concerns: (1) confidential treatment of proprietary information and (2) ownership of inventions/intellectual property.

Confidentiality:

PIIAs typically require an individual to agree to keep all proprietary information confidential and to treat such information as the exclusive property of the Company.  “Proprietary Information” includes information or material related to the company which has not been made generally available to the public, such as:  (a) corporate plans, strategies, methods, or policies; (b) marketing information, including customer/prospective customer information; (c) financial information; (d) operational and technological information, including software, designs, procedures, formulas, discoveries, inventions, improvements, concepts and ideas; and (e) personnel information. Depending on your industry, there may be different types of information you may want your employees to keep strictly confidential and you should seek to tailor the definition of “Proprietary Information” in the PIIAs to fit your company’s circumstances.

Ownership of Inventions:

A PIIA should include an express assignment by the individual to the company of all right, title and interest in and to all “inventions”, including discoveries, designs, developments, methods, algorithms, formulae, techniques, trade secrets, know-how, software code and other works of authorship made or conceived by the individual (alone or with others) during the course of the individuals employment with the company and all patent, copyright, trademark, trade secret and other intellectual property rights and other proprietary rights therein. 

It is important that the assignment of rights in the PIIA cover both an assignment of any current rights to such inventions and an agreement to assign such rights in the future when any additional inventions are made or conceived. 

Carve-Outs:

Some employees may have preexisting inventions (which they created prior to joining your company) they want to specifically exclude from the assignment of intellectual property to the company.  Thus, PIIAs often include a carve out provision which allows an employee to specifically exclude such preexisting inventions from the PIIA.  When an employee seeks to carve out an invention from a PIIA you should seek advice from counsel to ensure there is a clear delineation between prior inventions and the type of intellectual property that may be produced by your company and that your company has any license or other applicable rights in place related to such preexisting inventions if they may be used by the employee in his or her work with the company.

Other Considerations:

Some states have placed statutory restrictions on the scope of PIIAs.  In California, for example, PIIAs are not enforceable with respect to inventions developed by an individual entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer or (2) result from any work performed by the employee for the employer (California Labor Code, Section 2870). 

PIIAs are also sometimes included as part of a larger employment related agreement and thus may also include non-solicitation and/or non-competition provisions, however such considerations are outside the scope of this article. 

Similarly, some consulting agreements may also cover the terms of a PIIA, however you should be careful to ensure that the terms of any consulting agreement cover the full range of rights addressed in a standalone PIIA, to the extent applicable, if the consulting agreement will take the place of the PIIA.

Conclusion:

PIIAs are a critical tool for your company to protect its intellectual property and remain important throughout all stages of a company’s growth and thus should not be overlooked as part of the onboarding process with new employees or consultants.  New companies should therefore seek to have a form PIIA in place that they can use with all new hires and consultants.

Current Legal Analysis

More from mintz, upcoming legal education events.

Sign Up for e-NewsBulletins