When transferring intellectual property rights, the first consideration is the type of transfer your business needs. An intellectual property (IP) transfer can be either temporary, under a license, or permanent as an assignment. In this article, we discuss five key factors required for effective IP transfers, including the need for a compliant license or assignment agreement.
Whether you are acquiring, licensing, or selling IP rights, you will need to manage the transfer of the associated IP assets, including copyrights, trademarks, patents, and trade secrets. In this blog, we cover five crucial elements that need to be put in place for a successful IP transfer.
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1. Do You Have the Legal Right to Transfer the IP Asset?
A key compliance factor for an assignment or license agreement is that the assignor must prove they own the IP rights in question. When signing the agreement, the assignor will have to warrant that they have the right to transfer the IP, whether it is a temporary or permanent transfer. If the chain of title for IP rights has not been kept up to date with timely recordals, you could face challenges establishing that the rights are legally yours. We recommend consulting with an IP specialist, such as Questel, who can support you with data verification and recordals projects, and speaking to an IP attorney if you need support defining the warrant requirements, whether you are the assignor or the assignee 1.
2. Which Intellectual Property Transfer Agreement Do You Need?
The main difference between a license and an assignment is that an IP license agreement has a fixed period. When that time expires, the rights to exploit 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. Generally, when IP is transferred using a license, the company licensing the property will have the right to sell or commercialize the IP asset. Once the license is terminated, the licensee must cease all selling and commercialization activities.
3. Is the Scope of Activities Specified?
Other rights associated with the IP in question 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. To remain compliant with the license agreement, the full scope of activities should be defined and agreed upon by both parties.
4. Are Ownership Rights Defined?
Although a license agreement can be viewed as a temporary transfer of IP assets, it is necessary to define the scope of ownership rights, as the transfer agreement may not cover all these rights. It is advisable to consult with an IP attorney to ensure your license agreement contains all the rights and privileges needed for your business activities.
5. When and How Will You Update the IP Records?
If the IP is being transferred permanently, then this will also trigger the need to update the IP records held by the relevant IP registry (through the process of IP recordals). Depending on the size of the portfolio, this can be a cumbersome, time-consuming, and tedious administrative process to manage, requiring highly specialized knowledge of the differing administrative formalities and deadlines around the world. For this reason, consulting with an IP specialist, such as Questel, to assist in the transfer and IP recordals process can be beneficial to ensure an effective result.
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Footnote
1. Questel does not provide any legal services. Legal services are provided by independent IP attorneys on the basis of a separate engagement agreement between you and, if you wish to, a partner IP attorney firm.
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.
