Intellectual Property Australia observes that intellectual property is the "property of your mind or proprietary knowledge and is a productive new idea you create". This includes inventions, trademarks, designs or processes that you come up with. Slogans, logos or even general ideas around branding may all fall under the definition of intellectual property. Registering your intellectual property gives you exclusive rights for a restricted duration and within certain boundaries.

It is an unfortunate reality that many businesses neglect the ownership of their intellectual property and its inherent value. According to the Australian Bureau of Statistics, 67.1% of businesses with 0 to 4 employees do not use any method of Intellectual Property protection. Commercial entities can innovate and expand their brand as IP rights are protected through the creation of the business themselves. Protections include the use of patents, copyright and registered designs and trademarks.

Transferring IP Rights

There are two main ways to transfer IP rights: licensing and assigning. An Intellectual Property Agreement is effective when you want to:

  • Transfer ownership of Intellectual Property in writing;
  • Transfer ownership of newly created Intellectual Property Rights when joining a company as a co-founder or during the start-up phase;
  • Transfer ownership of Intellectual Property Rights from new employees to the company;
  • Transfer ownership of Intellectual Property Rights from your business as a sole trader/partnership to a new company.


When licensing, the licensor will transfer the right to use the IP. It will usually involve a long-term business relationship between licensor and licensee. The licensee will pay a fee for the right to use it, either through a lump sum or instalment payments. Note that a licensor can opt to grant an exclusive, sole or non-exclusive licence. This will determine how many parties will be able to use the IP. Contracts may be flexible and further restrictions can be added so that IP may only be used for a particular purpose, class of product or geographical location.


Assignment is the complete transfer of IP ownership from the assignor to the assignee. The agreement must be meticulously drafted to ensure that both parties understand their respective obligations. Further, getting the services of an expert IP lawyer to assist with the agreement's finalisation is strongly recommended.

A key feature of an assignment contract is the irrevocable transfer of commercial rights to the assignee— as it is a one-time deal, parties are not expected to have further endeavours about the business and how the IP will be used after the agreement. Unlike instalments of royalties with a licensee, the assignor will usually receive the payment in a lump sum from the assignee. This may be technically termed the IP "purchase price"; it will include many considerations such as profit components and market value and will, therefore, have to be determined carefully.

As either a licensee or assignor, your legal team should always perform due diligence which includes inspecting the different market-value and profitability aspects attached to the IP. If you are considering selling your business, you need to consider how you wish the IP aspect to be handled.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.