5 Things Needed For A Compliant Transfer of Intellectual Property
When transferring intellectual property, the first thing to consider is the type of transfer required for your business needs. The transfer of intellectual property can be either temporary under a license or permanent as an assignment. In this article, we will look at the factors associated with developing compliant license and assignment agreements.
Whether you are using a license or assignment agreement to transfer intellectual property rights, either method can be applied to all types of intellectual property, including copyrights, trademarks, patents, and trade secrets.
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1. Prove Intellectual Property Ownership
A key compliance factor for an assignment or a license agreement is that the assignor must prove that they own the intellectual property in question. When signing the agreement, the assignor will have to warrant that they have the right to transfer the intellectual property, whether it is a temporary or permanent transfer. In this regard, you should consult with an IP specialist who can help you to define the warrant requirements and ensure that you are adequately protected whether you are the assignor or the assignee.
2. License or Assignment?
The main difference between a license and an assignment is that an intellectual property license agreement has a fixed time period. So, when the time period expires, the rights of the intellectual property will transfer back to the original owner.
A permanent transfer of intellectual property can be carried out using an assignment. This means that an IP owner will transfer all rights of ownership to another party without the possibility of transferring them back.
If a license does not provide a termination date, it should be revised by an IP attorney to ensure that it is not to be confused with an assignment. When intellectual property is transferred using a license, the company licensing the property will generally have the right to sell or commercialize the property. When the license is terminated, the licensee will have to cease all selling and commercialization activities.
3. Specify the Scope of Activities
Other rights associated with the intellectual property may also be licensed, such as the right to copy, distribute or produce similar property. Even though a license covers certain aspects of intellectual property ownership, the IP assignor may still need to provide consent for other activities. In order to remain compliant with the license agreement, the full scope of activities should be defined and agreed upon.
4. Define Your Ownership Rights
Although a license agreement can be viewed as a temporary transfer of intellectual property ownership, it is necessary to define the scope of ownership rights as the transfer agreement may not cover all of these rights. It is advised to consult with an intellectual property specialist to ensure your license agreement contains all the rights and privileges needed for your business activities.
5. Draft Your Agreement
Whether your business is transferring intellectual property through a license or an assignment, the agreement requirements can vary between different countries and regions. However, the agreement should contain the following information:
- Identifying details of the Assignor (owner) and the Assignee (receiver).
- Recitals and definitions to provide the context and terminology relevant to the agreement.
- Assignment details, including a detailed description of the intellectual property as well as any associated applications, registrations, protections and intangible value (“goodwill”).
- Obligations of the Assignor and Assignee, which can depend on the type of intellectual property and will also include details related to payment and ownership obligations.
- Liability, warranties and indemnification provisions and obligations to ensure that the owner has the rights required to make the transfer and, in the event of third-party infringement, the obligations of both parties are clearly outlined.
- Other terms, such as payment details, effective dates, and applicable laws and jurisdiction should also be included.
The transfer of intellectual property, whether it is temporary or permanent, is a complex process that requires highly specialized knowledge of IP rights and obligations across multiple industries and jurisdictions. For this reason, consulting with an IP specialist to assist in the transfer process can be beneficial to ensure an effective.