IP Assignment clauses are featured in contracts when an owner’s intellectual property rights are to be assigned or transferred to another entity or individual, usually in return for some type of consideration.
When an IP Assignment clause is missing
IP Assignment clauses are a valuable contractual provision employed to enable the assignment of IP.
Unlike the licensing of intellectual property, which may be terminated, once assignment occurs it effectively brings to an end the original owner’s involvement with the assigned intellectual property.
When drafting an IP Assignment clause, the following points should be considered:
- Confirm that the assigning party is the owner of the IP or has been assigned the rights to it. If rights were assigned, confirm that there are no limitations on their ability to assign the acquired rights.
- Confirm whether the assignor will warrant its rights and necessary third party consents.
- Decide what consideration (payment) is being provided for the intellectual property and whether payment will be made in lump sum or periodic payments.
- If consideration is by way of periodic payments, consider and ensure that the clause is clear in relation to when the title will transfer.
- Outline the logistics of when, where and how the intellectual property will be delivered.
- Confirm whether the assignment will be a full or partial assignment. If only partial rights are being assigned ensure that the clause is clear in relation to which part/s.
- Verify whether there will be any limitations on the assignment.
- Confirm whether the assignor will provide indemnification in the event the rights are disputed or for any other terms or conditions.
Finally, it should be noted that most assignments need to be recorded with the relevant intellectual property office and the relevant register updated to indicate the new owner’s details.