what is an intellectual property assignment agreement

Intellectual property assignment: What it is and how to make one

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Updated on: February 12, 2024 · 9min read

What is an intellectual property assignment?

Ip assignment pros and cons, how to complete an intellectual property assignment, intellectual property assignment faq.

Just as with buying and selling physical property, transferring the ownership of intellectual property is an important part of doing business. Whether you're starting a new business, buying product rights, or purchasing a company, an intellectual property assignment can help you smoothly transfer IP ownership rights.

An intellectual property assignment is the transfer of an owner's rights in copyrights, trademarks, patents,  trade secrets , or other intangible creations. These transfers may take place on their own or as part of a larger transaction.

An intellectual property assignment provides records of ownership and transfer while also  protecting the rights  of all parties involved in buying or selling IP. This essential documentation helps establish a clear record of the title for intellectual property.

By having an intellectual property assignment in place, you can help keep your intellectual property safe from illegal use, distribution, and more.

What should an intellectual property assignment include?

An intellectual property assignment includes important details about the transfer of intellectual property and the parties involved. The contents of an IP assignment can be laid out in 17 different sections.

In the intellectual property assignment, you will find:

• Who is involved in the transfer
• What IP is being transferred
• How much the IP costs
• Why the transfer is valid

When done correctly, an intellectual property assignment provides a written acknowledgment of the rights and responsibilities transferred in the sale.

Intellectual property assignments have many advantages, but before transferring your IP in this way, it's important to consider the limitations of IP assignments as well.

Pro: Guaranteed payment at the price negotiated

If a seller decides to give up the ownership rights of their intellectual property using an IP assignment, they can be sure that they will receive the exact compensation stated in the agreement. An IP assignment agreement will also state a strict payment deadline for the buyer, ensuring that the seller is paid by the agreed-upon date.

Pro: No lingering responsibilities

Once an IP assignment agreement goes into effect after being signed by both parties, the seller may no longer have any responsibilities related to the intellectual property involved in the sale. Because of this, the seller can remove themselves from being responsible for any future obligations related to the intellectual property once the agreement has been signed.

Con: One-time payment

Unlike with an IP licensing agreement, the use of an IP assignment transfers all ownership rights of the sellers' intellectual property for a set price. If a seller uses an IP licensing agreement, they will still retain ownership rights, which allows them to control how their intellectual property is used while still receiving income via fees and/or royalties (think renting vs. selling).

Con: Loss of ownership rights

Using an IP assignment agreement, sellers surrender all ownership rights to the intellectual property and no longer have any say over how the IP is used. This gives the buyer complete control and ownership rights of the intellectual property involved.

IP assignments aren't inherently complicated, but it's important to include the right information. The following is how an IP assignment agreement can be crafted. Learn about each section in more detail.

1. Introduction of parties

This section identifies the document as an intellectual property assignment. It should include:

• Each of the parties involved
• The date the document will be signed

Each party is given a name (usually “Assignor" or something similar) that will be used throughout the entire document. The assignor is the party giving up its ownership interest and the assignee is the party receiving it.

2. Recitals

Recitals offer up key background information about the parties involved. This section is known as the whereas clause because it explains the intent to transfer intellectual property rights.

3. Assignment of intellectual property

This section covers the agreement and acceptance of the intellectual property assignment. It's important to note that the intellectual property is not described in the agreement itself but in the addendum Exhibit A, which is referenced throughout the assignment.

4. Consideration

This section should cover:

• The amount to be paid for the intellectual property
• The time period in which the payment must be made

The payment's due date and price are only enforceable after both parties have signed the agreement.

5. Assignor's representations and warranties

Here is where you will find the assignor's promises about the property that is being sold. There are often at least seven subsections, each addressing a specific promise made by the assignor.

The assignor swears that:

• They are the owner of the IP.
• They have not sold the IP to any third party.
• They have the authority to enter the agreement.
• They have no knowledge that the IP has been plagiarized or taken from any third party without authorization.
• They do not know of any permissions that must be obtained to complete the IP assignment.
• If the IP involved includes a patent , they are unaware of any existing challenges to the validity of the patent. If the IP doesn't include a patent,  patent application , or other patent-related materials, you can delete this provision from the representations and warranties.
• The property was not created while the creator was working on behalf of a third party.

If either party would like to include additional promises and warranties, they may do so here.

6. Assignee's representations and warranties

Here is where you will find the assignee's promises about the transaction.

The assignee swears that:

• They have enough funds to pay for the assignment.

If any additional representations or warranties are required, they may be added here.

7. Documentation

This section states the assignor's promise to help with any paperwork needed to complete the assignment. Typical documentation can include:

• Filing information about the assignment with a registry office
• The transfer of document titles

If applicable, the assignor may also promise to help with transfer paperwork for filings outside of the country. This information is only needed if it is relevant to your agreement.

8. Indemnification

Protecting intellectual property  is crucial to IP ownership. This section includes each party's future obligations if the intellectual property is found to infringe on a third party's rights.

There are two options provided, and you should choose whichever one works best for your situation.

• The assignor takes all responsibility for the infringement, agreeing to pay all related expenses and costs.
• The assignor makes its responsibilities conditional, greatly limiting their obligations if a claim is brought.

The assignor can't make both promises at once, so only one of these promises should be included in the final agreement.

9. Successors and assigns

If applicable, you may list a successor organization. In the event that a successor is involved, this section will state:

• Who will inherit the IP ownership rights
• Who will be responsible for any ongoing obligations

This section will also state any organizations to which rights and obligations have been permissibly assigned.

10. No implied waiver

In the agreement, one party may allow the other to break an existing commitment in the assignment—for example, if the assignor allows the assignee to make a late payment without penalty.

An attempt to waive a previously agreed-upon commitment is only valid if:

• The waiver is in writing
• The waiver has been signed by the waiving party

If one party allows the other to break a commitment, it does not mean that any other existing commitments are also invalidated.

Here you will list the addresses to which all official and legal correspondence should be delivered.

You will also need to list the mailing address for:

• The assignor
• The assignee

For any digital correspondence, the parties involved may include their email addresses.

12. Governing law

This section grants the parties the option to choose the state laws that will interpret the document. Note that the included language will not affect where a potential claim can be brought.

13. Counterparts and electronic signatures

Both parties may agree to sign the agreement  using electronic signatures .

14. Severability

This section allows the agreement to stay valid, even if a part of it is invalidated in the future. For example, if a state law is passed that affects a section of your agreement, only that section will be invalidated.

This will leave the rest of your agreement intact and enforceable.

15. Entire agreement

This section of the document states that the document each party is signing is:

• The official agreement
• Directly related to the issues and IP involved

Even though a party could argue in the future that other enforceable promises may exist, this will provide some protection from those claims.

16. Headings

Here you will find that the headings at the beginning of each section are for organization and should not be interpreted as operational parts of the agreement.

17. Description of intellectual property

Referenced in Section 1, Exhibit A provides a detailed description of all intellectual property involved in the sale. If the description is too vague, the seller may end up giving up more than they intended or vice versa. When completing this section, be sure to be as specific and detailed as possible.

In addition to a detailed description of the intellectual property, note the  goodwill  that is being sold with the property. Goodwill is the intangible value of the property being sold, often including:

• Reputation with customers
• Relationship with the community
• Brand value that's not tied to a trademark

Don't worry about making the descriptions sound lawyerly—simple, succinct, and complete descriptions should suffice. Attach any relevant registrations or samples (for example, “*See attached drawing").

Consider these common questions and answers when completing an intellectual property assignment.

What's the difference between an intellectual property assignment and a license?

The use of a license allows the licensor to maintain ownership of the intellectual property rights. When using an intellectual property assignment, the assignor is giving up all of their ownership rights to the assignee.

It is always a good idea to have someone witness the assignor and assignee signing and dating the document.

What's the difference between an intellectual property assignment and a lease?

When obtaining the use of intellectual property using a lease, the assignee does not receive any ownership rights. Because of this, the assignor retains all ownership and control of the intellectual property and can dictate how it is used. Depending on the specifics of the lease, the assignor may be compensated via royalties and/or fees.

What is a quitclaim assignment?

A  quitclaim assignment  is an agreement that transfers all of the seller's rights to the intellectual property without any guarantees that the seller has the right to do so. If a third party is to claim ownership of the intellectual property down the road, the buyer will be on their own to defend the claim.

Do copyright assignments need to be notarized?

While  copyright assignments  must be done in writing to be valid, notarization isn't required. But it is always a good idea to have someone witness the assignor and assignee signing and dating the document.

Ready to get started? Use this form to  create an intellectual property assignment in minutes . If you aren't looking to give up ownership rights of your intellectual property,  keep it protected .

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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.

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IP Assignment and Licensing

IP rights have essentially transformed intangibles (knowledge, creativity) into valuable assets that you can put to strategic use in your business. You can do this by directly integrating the IP in the production or marketing of your products and services, thereby strengthening their competitiveness. With IP assignement and IP licensing, IP owners can also use your IP rights to create additional revenue streams by selling them out, giving others a permission to use them, and establishing joint ventures or other collaboration agreements with others who have complementary assets.

  Expert tip: Assignment, license and franchising agreements are flexible documents that can be adapted to the needs of the parties. Nevertheless, most countries establish specific requirements for these agreements, e.g. written form, registration with a national IP office or other authority, etc. For more information, consult your IP office .

IP rights assignment

You can sell your IP asset to another person or legal entity.

When all the exclusive rights to a patented invention, registered trademark, design or copyrighted work are transferred by the owner to another person or legal entity, it is said that an assignment of such rights has taken place.

Assignment is the sale of an IP asset. It means that you transfer ownership of an IP asset to another person or legal entity.

IP for Business Guides

Learn more about the commercialization of patents, trademarks, industrial designs, copyright.

Read IP for Business Guides

IP licensing

You can authorize someone else to use your IP, while maintaining your ownership, by granting a license in exchange for something of value, such as a monetary lump sum, recurrent payments (royalties), or a combination of these.

Licensing provides you with the valuable opportunity to expand into new markets, add revenue streams through royalties, develop partnerships etc.

If you own a patent, know-how, or other IP assets, but cannot or do not want to be involved in all the commercialization activities (e.g. technology development, manufacturing, market expansion, etc.) you can benefit from the licensing of your IP assets by relying on the capacity, know-how, and management expertise of your partner.

  Expert tip: Licensing can generally be sole, exclusive or non-exclusive, depending on whether the IP owner retains some rights, or on whether the IP rights can be licensed to one or multiple parties.

Technology licensing agreements

Trademark licensing agreements, copyright licensing agreements, franchising agreements, merchande licensing, joint venture agreements, find out more.

• Learn more about Technology Transfer .

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Intellectual Property Assignment Agreement (Assignee Friendly)

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 - the PocketLaw agreement provides for a payment of £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.

Access all the templates you need with PocketLaw. Save time and reduce risk by leveraging our extensive library of 130+ templates , which are developed by qualified lawyers.

Ready to get started? Create all your Intellectual Property Assignment Agreement in minutes. PocketLaw offers a platform with legal documents, guidance and a clever contract management system, as well as access to partner law firms where bespoke advice is needed. All legal you need to grow your business and drive it forward.

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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.

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For most companies — especially small businesses, startups, and partnerships — intellectual property (IP) is either the crown jewel of the business or a key asset. For in-house counsel, this means that extra care is needed when preparing any contract that touches on IP ownership. While it seems scary, the basic concepts of IP ownership are relatively straightforward and there is much in-house counsel can do without always resorting to the use of outside counsel — if that’s even an option.

There are, however, certainly times when experienced IP counsel is helpful and necessary. With Practical Law, however, you can learn the basics of IP and IP ownership and have access to a huge library of contract templates, clauses, checklists, practice notes, drafting notes, and toolkits. And, all for far less than the cost of outsourcing all of your intellectual property contracts issues to outside counsel.

What is intellectual property and IP ownership?

There are four types of IP that in-house counsel are concerned about when drafting or reviewing agreements:

• Trade secrets

When preparing or reviewing a contract involving IP ownership, the parties are generally trying to set out the key issues — namely, “who owns what” (ownership) and “how can the IP be used” (license). More about these concepts is laid out below, but without a contract in place stating otherwise, here are the general rules for IP ownership.

Copyrights, or original works of art, are owned by the author who created the work; if multiple authors are involved, they are joint owners with an indivisible interest in the work. Patents — also known as inventions — are owned by the inventor. Trademarks are the marks used in commerce and are owned by the person or business using them to identify their goods or services. Trade secrets, also known as confidential information, are owned by the creator — mostly businesses through their employees. With trade secrets, care must be taken to keep them confidential or they lose their status as trade secrets.

IP contracts establish ownership

Of course, it’s pretty rare that a lawyer will rely on things just working themselves out based on the common law. Instead  and rightfully so, they want to lay out IP ownership in a written agreement that spells out the rights and obligations of each party. This is where the hundreds of IP contract templates in Practical Law can really cut your time, effort, and cost way down. To start, you need to get familiar with the three types of intellectual property agreements: the creation of IP, the licensing of IP, and the purchase/assignment of IP.

How to create intellectual property

You can create intellectual property in a number of ways. For the purposes of most businesses, IP is created by its employees or by third parties, such as contractors hired to create IP based on specifications and direction provided by the business. While businesses own IP created by their employees — if it is part of their job to create such IP — it is not wise to leave ownership to chance.

The typical solution is an invention assignment agreement signed by the employee when they first join the company. Such an agreement covers a range of IP ownership issues, from confidentiality of company trade secrets to the assignment of any intellectual property created on the job or using company resources to the company. These agreements also require employees to disclose any inventions they claim to have invented prior to joining the company so there is no dispute down the road.

When it comes to contractors, their agreements usually contain a “work-for-hire” provision which states that any work product they turn out for the company under the contract belongs to the company. The only exceptions involve IP the contractor brings to the relationship. It continues to belong to the contractor but, if necessary, the contractor provides a license for the company to use that IP to make the work product function properly. These agreements also contain confidentiality and non-disclosure provisions to ensure that neither party reveals the confidential information of the other party.

See the Practical Law practice note  Intellectual Property – Employees and Independent Contractors

Lastly, companies sometimes partner and enter into a joint development agreement to create IP that neither party could easily create on their own. Each party contributes something to the development and then the ownership and use rights are spelled out in the terms of the agreement.

How to license the IP

IP ownership also comes up in the context of licensing the IP. Many companies’ entire business comprises licensing software or other IP they have developed. To do this successfully, they must enter into software/IP licensing agreements with customers. These agreements set out, among other things:

• Ownership of the IP and any modifications or derivatives
• Who may use the licensed IP, in what manner, and is there exclusivity?
• The ability to sublicense
• Where the IP may be used
• The period of time the licensee may use the IP
• Warranties about the software
• Indemnities, primarily from the licensor against IP infringement
• Obligations not to reverse engineer the software or allow unauthorized access
• Permitted uses and prohibited uses of the IP
• How the agreement ends and what happens to the licensee’s ability to use the IP after termination

While software agreements are the obvious IP licensing contracts, intellectual property licensing arises in franchise agreements; entertainment such as movies, music, and art; NFT; and many other contexts. That is, any type of IP is subject to a licensing agreement.

How to purchase or assign intellectual property

Lastly, IP ownership can be purchased or assigned — that is, the inventor or owner of the IP can transfer it to a new owner. Note that the assignment of IP is different than licensing IP. Under an assignment, ownership and all rights are transferred. With a license , there is no transfer of ownership and only limited rights to use the IP are given.

Some common situations involving buying IP include mergers and acquisitions of the company that owns the IP or just a straightforward purchase of the IP asset alone. For example, owners can sell copyrights and trademarks, including web addresses — many so-called patent trolls buy patents out of the bankruptcy estate of a failed business. Here are three things to keep in mind when buying IP:

•   Define the IP properly. What, exactly, are you buying or selling? Words will matter here.
• Representations and warranties. Drafting properly is important, especially representations around ownership of the IP being sold, warranties around non-infringement, and an indemnity if something goes wrong.
• Residual use. Does the seller have any rights to continue to use the IP? If so, what is the scope? What is the price?

Assignment of IP typically takes place when a party is contributing their IP to a joint venture or partnership , or when the founder of a technology business transfers their invention to the new business, which is generally a requirement to attract new investors. Intellectual property may be transferred to satisfy debts or a judgment, or when a subsidiary or division is “spun out” of a parent company and provided with certain IP assets to start their separate business. When assigning IP, consider these three key points in addition to those above:

• Broad assignment rights. Define what is being assigned and ensure you are getting what you think you are getting.
• Power of attorney. Generally, there will be an obligation on the part of the assignor to cooperate in taking any steps necessary to perfect the assigned rights. A power of attorney gives the assignee the ability to perfect those rights even without the assignor’s assistance.
• Dissolution . If the company folds or the joint venture fails, what happens to the IP that was contributed? You need to think this through at the beginning as it is too late to think about it when the problem hits.

Given the importance of IP to businesses — especially small business and partnerships — in-house counsel should be well versed in the contracts that govern its ownership, assignment, and licensing. It may seem daunting at first, but it is a skill you can hone relatively quickly, especially with a resource like Practical Law to back you up.

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Secure Your Company's IP with a Confidentiality and Intellectual Property Assignment Agreement: The Essential Guide

LegalGPS : August 4, 2023 at 10:38 AM

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As an entrepreneur, one of your most valuable assets is your company's intellectual property (IP). From trade secrets and customer lists to patented inventions and copyrighted materials, your IP is what sets you apart from your competitors and drives your business forward. That's why it's crucial to take the necessary steps to protect this critical asset, and one effective way to do this is by implementing a confidentiality and intellectual property assignment agreement.

In this blog post, we'll dive into the world of confidentiality and IP assignment agreements in a friendly and approachable manner, breaking down complex legal topics into simple, actionable steps. We'll explain their importance, outline their key elements, discuss the benefits of implementing them, provide guidance on how to draft one, and highlight common mistakes to avoid. By the end, you'll understand why these agreements are an essential tool for securing your business's intellectual property and be equipped with the knowledge you need to create one tailored to your business.

Imagine sitting down for a coffee chat with a friend, and they're curious about what a confidentiality and IP assignment agreement is, and why it's important for a business. You could explain that protecting a company's intellectual property is essential for its success and longevity. Confidentiality and IP assignment agreements are an effective way to safeguard valuable assets and ensure the business retains control over its IP.

Now, let's delve deeper into the world of confidentiality and IP assignment agreements.

What is a Confidentiality and IP Assignment Agreement?

A confidentiality and intellectual property assignment agreement is a legally binding contract between two or more parties that addresses the protection, disclosure, and sharing of confidential information and the assignment of intellectual property rights. It's designed to safeguard the sensitive information of a business while also ensuring that any intellectual property created by an individual or entity involved with the company is assigned to the company itself.

These agreements differ from other IP protection methods, such as patents and trademarks, in that they specifically address the assignment of IP ownership and provide clear terms for the management of confidential information.

Key Elements of a Confidentiality and IP Assignment Agreement

When crafting a confidentiality and IP assignment agreement, these are the essential elements to include:

Parties Involved

Clearly identify the parties entering into the agreement. This typically includes the company and the individual or entity being hired (e.g., an employee, contractor, consultant, or partner). Be sure to use accurate and complete names, as well as any relevant titles, to avoid any confusion or disputes.

Scope of Confidential Information

Define the scope of the confidential information that is subject to the agreement. This could involve trade secrets, financial data, customer lists, marketing strategies, and any other sensitive information that the business wishes to protect.

Ownership and Assignment of Intellectual Property

Specify the terms of the intellectual property assignment. This involves stating that any IP created, developed, or conceived by an individual or entity within the scope of their relationship with the company will be assigned to the company. The agreement should also mention any exceptions or conditions that apply.

Non-Disclosure Terms

Establish clear guidelines for the treatment and handling of confidential information. This includes prohibiting the unauthorized use and disclosure of protected information, as well as outlining any restrictions on accessing the information. It's essential to include obligations and expectations for maintaining the confidentiality of the information, even after the agreement's termination.

Duration and Termination

Indicate the duration of the agreement, which could be for a set period or ongoing until terminated by either party. Include any provisions for termination, such as notice requirements or specific events that could trigger termination (e.g., breach of contract, completion of a project).

Remedies for Breach

Outline the remedies available to the aggrieved party should the other party breach the agreement. This may include monetary damages, injunctive relief, or other legal remedies.

Benefits of Implementing a Confidentiality and IP Assignment Agreement

By incorporating a confidentiality and intellectual property assignment agreement into your company's legal arsenal, you can enjoy several key benefits:

Protection of Sensitive Business Information

Your company's competitive advantage relies on the careful protection of its sensitive information. These agreements help ensure that confidential information is treated with care and not disseminated or exploited by unauthorized parties.

Assurance of IP Ownership

By clearly stipulating that any IP created or developed in the scope of the relationship is assigned to the company, you provide a solid legal foundation for your business's ownership claims to all valuable assets.

Attraction of Investors and Partners

A strong confidentiality and IP assignment agreement demonstrates your company's commitment to safeguarding its intellectual property. This can make your business more attractive to potential investors, partners, or clients who are seeking assurance that their information and contributions will be treated with care.

Mitigation of Legal Disputes and Risks

Establishing clear guidelines and expectations around the treatment of confidential information and the assignment of IP rights can help prevent future misunderstandings and disputes while reducing the risk of costly litigation.

How to Draft a Confidentiality and IP Assignment Agreement: A Detailed Walkthrough

Crafting a robust confidentiality and IP assignment agreement may seem daunting, especially when your most valuable assets are at stake. But fear not - we're here to guide you through the process step-by-step, making it as straightforward and actionable as possible. By the end of this section, you'll be well-equipped to develop an agreement that fits your unique business needs.

Step 1: Identify Your Needs and Objectives

The first step is to clearly define the goals of your agreement. Ask yourself:

What types of confidential information do I need to protect (e.g., trade secrets, financial data, customer lists)?

What intellectual property needs assigning (e.g., patents, copyrights, trademarks)?

Who will be bound by the agreement (e.g., employees, contractors, partners)?

As you're determining your objectives, make sure to consider the scope and nature of the relationship between the parties involved. This will vary depending on whether the individual is an employee, a contractor, a partner, or another entity related to your business.

Step 2: Consult with Legal Counsel

Once you've identified your needs and objectives, it's time to seek legal guidance. Consulting with a legal professional is essential to ensure your agreement adheres to all legal standards and offers comprehensive protection for your intellectual property. They can provide valuable input and advice to help tailor the agreement to your particular circumstances.

Step 3: Craft the Agreement

After consulting with legal counsel, you can begin to draft your agreement. Here, remember to use precise and easy-to-understand language and to make your terms as explicit as possible. Let's further break down what you need to include:

Identify the Parties Involved: Spell out the full legal names of both the disclosing party (your business) and the receiving party (the individual or entity obliged to keep your information confidential). Often, a business will adopt a ‘catch-all’ approach by covering all directors, employees, agents, and contractors under the same agreement.

Define the Confidential Information: Make sure to clearly define what constitutes confidential information within the scope of your agreement. Keep the definition broad enough to cover all relevant details, but not so broad that it's unenforceable. Be as specific as you can be here. Typical categories include: business strategies, customer databases, financial data, unpublished patent applications, technical designs, and prototype details.

Establish the Term of the Agreement: Specify the duration of your agreement, as well as any conditions for its termination.

Specify IP Ownership: The assignment clause should state that any intellectual property created, developed, or conceived by the receiving party while in service to your company will be assigned to the company.

Set Out Non-Disclosure Obligations: Lay out clearly what is expected of the receiving party when it comes to handling your confidential information.

Outline Consequences for Breach: Define remedies for the breach of the agreement, typically an injunction and/or monetary damages.

Step 4: Review and Amend as Necessary

The work doesn't stop after you've drafted your agreement. It's important to review and revise the document regularly to ensure it continues to align with your changing business needs and updated laws.

Don't worry if the agreement doesn't come out perfectly the first time. It often takes multiple iterations to draft a document that accomplishes everything you need. The key is to keep refining it until you're confident it protects your company's best interests.

Use these steps as your roadmap to drafting an effective confidentiality and IP assignment agreement. Always make sure to consult with legal counsel to ensure your agreement's terms comply with current laws and are legally enforceable. Empowered with this knowledge, you're now equipped to safeguard your company's most valuable assets.

Common Mistakes to Avoid

As you put together your confidentiality and IP assignment agreement, be mindful of these common mistakes:

Ambiguous language: Keep the language of your agreement clear and concise to avoid confusion or misinterpretation.

Overly broad or narrow scope: A well-crafted agreement will strike a balance between protecting your business's interests without being overly restrictive or impeding the free flow of creativity and collaboration.

Failure to specify IP assignment terms: Clearly outline the terms of ownership, transfer, and assignment of intellectual property to prevent ambiguity and future disputes.

Inadequate remedy clauses: Ensure your agreement includes fair and appropriate remedies for breaches of contract to deter unauthorized actions effectively and offer recourse should violations occur.

Confidentiality and intellectual property assignment agreements play a vital role in protecting a company's precious assets. By understanding their importance and crafting a thorough, legally sound agreement, you can safeguard your business's valuable IP and maintain a competitive edge in the marketplace.

Use the knowledge you've gained from this guide to create a customized confidentiality and IP assignment agreement that meets your company's unique needs. Remember that consulting with legal counsel is essential to ensure that your agreement is enforceable and provides the best possible protection for your business. Good luck, and happy drafting!

Check out our customizable contract template to create your own Confidentiality and Intellectual Property Assignment Agreement and protect your business today!

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Intellectual property (IP) assignment agreement: Sample template for Ontario startups

In a technology business, it is often the value of the intellectual property (IP) assets that the investor finances or the purchaser pays for. It is critical to have “clean” ownership of any intellectual property that is critical to the operation and success of your business. If your products and services depend on certain key IP assets, an investor will undertake due diligence to understand your right to use such assets.

An intellectual property assignment agreement provides assurance to investors that the founders have legally transferred to the company the intellectual property required to run the business.

Make sure to engage qualified IP counsel at a very early stage of your business to ensure that you have the freedom to operate your business with your inventions and to make certain that your business can meet the due diligence requirements of investors. MaRS has created a sample template of an intellectual property assignment agreement to help streamline business for investors, founders and their respective legal advisors. While MaRS makes this document available for educational purposes and to facilitate the negotiation of terms between investors and startups, the template is yours to use at your own risk . Please see the disclaimer below.

Download the Sample intellectual property assignment template

Read next: Sample funding templates for Ontario investors and entrepreneurs

This sample legal document has been made available by MaRS Discovery District for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Neither the transmission of this sample legal document nor the transmission of any information contained in this website is intended to create, and receipt hereof or thereof does not constitute formation of, a lawyer-client relationship. Internet subscribers and online readers should not rely upon this sample legal document or the information contained in this website for any purpose without seeking legal advice from a qualified lawyer practicing in the reader’s province.

The information contained in this website is provided only as general information and may or may not reflect the most current legal developments; accordingly, information on this website is not promised or guaranteed to be correct or complete. MaRS Discovery District expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this website.

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Intellectual Property Assignment Agreement

Everything you need to know about getting an ip assignment agreement over goodlawyer..

• What is a IP Assignment Agreement?

Pricing and Scope

• What is the Process?
• Why does my business need these documents?

Frequently Asked Questions

• Book your IP Assignment Agreement

What is an Intellectual Property Assignment Agreement?

Intellectual Property (IP) Assignment Agreements are contracts that establish the ownership of IP such as copyrights, trademarks, and patents by transferring it from one party to another. They serve a wide variety of functions but are most often used to transfer IP that is owned by an individual creator to a company. This ensures that the company won’t have any issues if the creator of the IP leaves, dies, or in any way changes their mind about their creations. These agreements are essential for companies that are trying to attract investors. 

Starting at $720 + Tax

• Project kick-off call to gather information, advise you, and answer questions
• One customized Intellectual Property Assignment Agreement
• One round of minor revisions if necessary

Not Included

• More than one IP Assignment Agreement
• Additional work or questions following the delivery of the IP Assignment Agreement
• Major revisions or rewriting of the IP Assignment Agreement throughout, or after the project

Your lawyer may recommend different or additional services, including a custom quote. Your approval for any additional work is always required and you will never be billed for services you didn't agree to.

What is the process?

• Book a call. Pick a time to discuss your IP Assignment Agreement with a Good Lawyer.
• Design your Agreement. Help your lawyer understand your situation and how you want to transfer the intellectual property. Your lawyer will advise you on exactly what your agreement needs to include and help you understand why. 
• Receive your Agreement. You will receive a digital copy of the IP Assignment Agreement ready to print, sign, and use.

Why use an IP Assignment Agreement?

To enable outside investment..

If your company relies on a technology, product, or brand, then a significant portion of the company’s value is based on the intellectual property it owns. Investors will simply not risk their money if your intellectual property belongs to your employees and contractors rather than the company itself.

Own what you’ve paid for.

Your employees and consultants are inevitably creating new intellectual property as they work and you need to ensure that it belongs to your company. An IP Assignment Agreement will prevent them from taking that IP and using it elsewhere once their job is done. 

How does the Goodlawyer Service Fee work?

Because we believe in transparent pricing, we make our best effort to be upfront about additional fees and how they are calculated.

Visit the Goodlawyer Service Fees page for a detailed explanation.

When should I use an IP Assignment Agreement?

You can use them at any time throughout the life of the intellectual property, but it’s much easier and cheaper to consult with an IP lawyer at the creation of your business before you ever hire employees or contractors. However, whether a piece of IP is still in ideation, the middle of development, or fully functional, it’s ownership can be transferred with a proper agreement.

Usually, good Employment Agreements , Independent Contractor Agreements , and Service Agreements will include an IP Assignment section, but it’s never too late to get an IP Assignment Agreement if your other contracts don’t address it already. Ultimately, if you’re thinking about raising capital, any quality investor will do their due diligence to ensure that your company owns it’s most valuable assets: the IP.

What kinds of IP can I use this agreement for?

From simple copyrights which exist as soon as something is created, to complicated patents that can take up to 2 years for federal approval, an IP assignment agreement has you covered. Depending on the nature and complexity of the IP being transferred and the ownership structure, your Assignment Agreement might require extra work. Your lawyer will always clarify any additional costs for your approval before proceeding.

Why not use a free template I found on the internet?

Canadian law protects the intellectual property of creators extensively. A templated agreement might not stand up in court if the ownership of the IP is ever contested (this is especially true for Patented IP). If you’re already using a templated agreement and you aren’t sure if it is adequate, consider booking a Contract Review to have it examined by a good lawyer.

What if I need more than one IP Assignment Agreement?

This service will only cover the creation of one Intellectual Property Assignment Agreement. If additional Intellectual Property Assignment Agreements or changes to your other IP related agreements are needed, you can talk to your Good Lawyer. Sometimes it is more efficient to produce multiple agreements and a discount is possible, but that is situational and Goodlawyer can’t guarantee any kind of bulk discount. 

What file format will the IP Assignment Agreement be in?

Intellectual Property Assignment Agreements are generally delivered as a PDF so that they can be easily shared, printed, and signed. They can also be delivered as a Word document. If that’s something you’re interested in, make sure you mention it to your lawyer.

Will I be able to communicate with my lawyer after the kickoff call?

Yes, absolutely. You can use the Goodlawyer platform to send messages and files. If substantially more communication is needed, your lawyer may request another call.

Do I need a lawyer in my province?

No. Intellectual property law is established federally and applies the same all over the country. Most (but not all) of Canada’s top intellectual property lawyers are in Toronto and they can help you wherever you are.

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Intellectual property assignment agreement template

Create and automate intellectual property assignment agreements more efficiently with this free template.

Securing intellectual property rights is crucial for innovators and businesses. Use this free intellectual property assignment agreement template to safeguard your innovations.

Intellectual property (IP) is a valuable asset for businesses, and ensuring its proper transfer and assignment is vital for both the assignor and the assignee.

So, what is an intellectual property assignment agreement? Why is it important, when should you use one, what should it encompass, and how can you manage them efficiently? Let's dive in.

What is an intellectual property assignment agreement?

An intellectual property assignment agreement is a legal document that facilitates the transfer of IP rights from one party (the assignor) to another (the assignee). This could relate to various forms of IP, including patents, trademarks, copyrights, and trade secrets. 

The agreement delineates the terms and conditions under which the IP rights are transferred, ensuring clarity and protection for both parties involved.

How does an intellectual property assignment agreement work?

Once both parties sign the intellectual property assignment agreement, it becomes legally binding. This means that the assignor relinquishes their rights to the specified IP, and the assignee becomes the new owner. 

The agreement should clearly define the IP being transferred, any compensation involved, and the responsibilities of both parties post-transfer.

When do you need an Intellectual Property Assignment Agreement?

Such agreements are essential when:

• A business acquires another company and its assets, including IP.
• An employee or contractor develops an invention or work while under employment and transfers the rights to the employer.
• A business wants to secure rights to a specific IP before commercializing or licensing it.

What should an intellectual property assignment agreement template include?

Identification of parties. Clearly state the assignor and assignee, including their legal names and primary business locations.

Description of the IP. Detail the intellectual property being transferred, ensuring clarity on its scope and nature.

Compensation. Specify any payment or consideration for the IP transfer.

Warranties and representations: The assignor should confirm they own the IP and have the right to transfer it.

Confidentiality. If the IP contains confidential information, this section ensures both parties maintain secrecy.

Liability limitations. Define any limitations on liabilities for both parties.

Termination. Conditions under which the agreement can be terminated should be outlined.

Dispute resolution. Detail the mechanisms for resolving potential disagreements, such as arbitration or litigation.

Governing law. Specify the jurisdiction governing the agreement.

Miscellaneous provisions. Any other terms and conditions pertinent to the agreement.

Traditional intellectual property assignment agreement management process

Managing intellectual property assignment agreements can be cumbersome, especially when relying on traditional methods. Typically, teams:

• Draft the contract in Microsoft Word or Google Docs
• Send the contract for internal review via communication platforms
• Share updated versions with counterparties via email
• Negotiate with redlines in Word
• Convert it to a PDF
• Move it into an eSigning tool
• Upload a copy of the executed contract to a shared drive

This process is repetitive and can be streamlined with modern contract management platforms like Juro. With Juro, you can automate the entire process, from drafting to signing, ensuring efficiency and accuracy.

Automating Your Intellectual Property Assignment Agreement

With platforms like Juro, you can:

• Use automated contract templates .
• Implement conditional logic for specific clauses.
• Integrate with other platforms for seamless data transfer.
• Use bulk actions for mass contract generation.
• Negotiate directly on the platform.
• Utilize built-in eSignature features.
• Store and manage contracts securely in a centralized repository.

Intellectual property is a valuable asset, and its proper assignment is crucial for businesses. By understanding the intricacies of intellectual property assignment agreements and leveraging modern tools, you can ensure a smooth and efficient transfer process.

If you're interested in streamlining your contract management process, book a personalized demo with us today.

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Intellectual Property Rights Agreement

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The Intellectual Property Rights Agreement (IPRA) protects the intellectual property of developers, such as trademarks , copyrights , patents, and trade secrets. These contracts are used to guarantee that the creator of the intellectual property is paid for their work and that others do not violate their rights to the intellectual property.

What is an Intellectual Property Rights Agreement?

Intellectual Property Rights Agreement is a lawful legal contract that specifies the terms and conditions of utilizing intellectual property assets between two or more people or organizations. It is a means for companies to safeguard their IP ownership and to guarantee that their proprietary data is not stolen, misused, or violated. These contracts specify the ownership of intellectual property assets and explain how they can be licensed, used, sold, or shared.

In addition, business owners and entrepreneurs should be aware of the significance of an Intellectual Property Rights Agreement and the different types of intellectual property ownership that can be guarded. Likewise, when negotiating an IPRA, it is necessary to examine the different types of intellectual property rights, comprehend the lawful implications of the agreement, make sure that the agreement's provisions are equitable to both parties, and guarantee that the terms of the contract are unambiguous.

It is also necessary to take the required measures to properly negotiate Intellectual Property Rights Agreements to safeguard the creator's rights and intellectual property. By doing so, company owners and entrepreneurs will guarantee their hard work is adequately compensated, and their intellectual property is safeguarded from violation.

Importance of Intellectual Property Rights Agreement

Intellectual Property Rights agreements define the right of intellectual property assets, which can be particularly significant in cases where numerous parties have contributed to the intellectual property design.

IPR contracts help companies safeguard their intellectual property assets by specifying their rights and the terms and conditions of their use. It can limit infringement, theft, and misuse of proprietary data, which can be expensive and detrimental to a business.

Licensing agreements allow companies to generate earnings from their intellectual property assets by permitting others to use them for royalty payments.

Intellectual Property Rights agreements allow companies to cooperate with other parties on specific assignments or business ventures, which can lead to the design of innovative products and services.

Assignment contracts in IPRA allow companies to sell or transfer their intellectual property assets to other people, which can be a useful source of revenue for a business.

Benjamin W.

Essential Elements of an Intellectual Property Rights Agreement

The introduction of an intellectual property rights agreement offers a brief overview of the contract, the parties concerned, and the scope of the arrangement. It also specified the agreement's objective and set the lawful ground for guarding and using intellectual property.

This section of the IPR agreement determines the intellectual property subject to the contract and each party's ownership rights. It defines the rights and obligations of the parties regarding the use, ownership, and exploitation of intellectual property.

The definitions section of an intellectual property rights agreement is vital to determining the connotation of the key terms and phrases used throughout the agreement. This section is important to avoid confusion and misinterpretation of the contract's terms.

The confidentiality section of the IPR agreement protects confidential data transmitted between the parties. It defines the parties' responsibilities to keep the confidentiality of the details and the outcomes of any violation of confidentiality.

The representations and warranties section of the intellectual property rights agreement sets out the parties' views about the accuracy and completeness of the data provided. This section also defines the consequences of any breach of warranty or representation.

The termination section of the IPR agreement summarizes the circumstances under which the contract may be discontinued, including infringement of the agreement, insolvency, or bankruptcy of one of the parties. It also defines the consequences of termination, including the return of intellectual property.

Common Types of Intellectual Property Rights Agreement

A licensing agreement is an arrangement that authorizes a party to utilize a trademark, patent, or copyright held by another party in exchange for royalties or a charge. These contracts define the terms and conditions of intellectual property usage and the license period.

A Non-Disclosure agreement is a contract that restricts the disclosure of confidential data transmitted between parties. This agreement is typically used when two parties negotiate a trade deal or when a business shares sensitive data with a third-party contractor or vendor.

A joint venture agreement involves two or more parties cooperating on a specific assignment or enterprise venture. These contracts define the terms of the collaboration, including the ownership of intellectual property assets and the allocation of profits.

An assignment contract is a contract that shares the ownership of intellectual property assets from one person to another. This type of agreement is generally used when a business sells its assets or merges with another business.

• Patent: A legal paper presented by a government that provides the owner sole rights to an invention for a specific period.
• Copyright: A lawful right given to developers of original works, such as music, books, and artwork, which gives them complete control over the use and allocation of their creations.
• Trademark: A word, symbol, or phrase that determines and differentiates a product or service from others.
• Trade Secret: Confidential data or details that give a company a competitive edge, which is not generally known to the public.
• Infringement: The unauthorized usage or infringement of someone else's intellectual property rights, such as duplicating or circulating their work without consent.
• License: A legal contract that allows someone else to use a patented invention, copyrighted work, or trademark in exchange for payment or other payment.

An IPR agreement is an essential legal document defining the terms and conditions of intellectual property protection, use, and exploitation. The agreement comprises several essential elements, including license of intellectual property, ownership of intellectual property, confidentiality, representations, indemnification, warranties, termination, governing regulation and jurisdiction, and various provisions. In addition, a well-drafted IPR agreement can safeguard intellectual property developers' rights and guarantee that their work is not exploited without their consent.

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Who controls ip in a joint venture.

I am currently considering entering into a joint venture with another company to pursue a business opportunity that may involve the creation of intellectual property (IP). I am unsure of who would have ownership and control over any IP that is created as a result of the joint venture, as it involves the contribution of resources and expertise from both companies. Therefore, I would like to seek the advice of a lawyer to better understand the legal implications and potential risks associated with the ownership and control of IP in a joint venture.

That's something that would be negotiated between the parties involved in the joint venture.

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Protecting IP ownership and rights in Lithuania: 6 things employers need to know

Jun 16, 2023

Doug Murray

Table of contents.

The competitive advantage of your company rests on its intellectual property (IP), but understanding the intricacies of IP law, particularly in international jurisdictions, can be a challenge.

When growing your workforce or recruiting in Lithuania , it is crucial to safeguard your company's innovations, designs, brand identities, creative works, copyrights, and confidential information from unauthorized use or exploitation by third parties. However, protecting your intellectual property rights in Lithuania can be a complex exercise, as they are governed by both Lithuanian legislation and European Union (EU) directives. Failing to properly secure your company's IP rights and ownership may result in expensive legal conflicts, a decline in market presence, and potential harm to your brand image.

Our primer offers valuable insights on protecting your company's IP. Please note that while our guide aims to provide information, it isn’t intended to provide legal advice. Always consult a reputable law firm. 

1. NDAs are enforceable in Lithuania

Non-disclosure agreements (NDAs ) are valid legal agreements in Lithuania. However, It is vital to ensure that NDAs are properly drafted to provide the necessary level of protection. There are certain considerations to keep in mind:

• NDAs must adhere to legal standards by being specific, reasonable, and not contrary to the public interest.
• Some types of information cannot be subject to an NDA. For instance, a company cannot enforce an NDA to prevent employees from reporting criminal activities committed by the company.

2. But NDAs aren’t enough to govern your ongoing relationships with employees and contractors

An NDA is a good place to start. It covers:

• How your firm's IP, information, and assets are to be used, 
• Who has access, and
• How long they have access.

You should note that the purpose of an NDA is not to regulate an ongoing contractor or employment agreement with someone involved in the creation and development of your company's IP (patents, copyright, designs, etc). NDAs protect existing IP and protected information when a worker (contractor or employee) is hired. NDAs don't cover IP and protected information the employee or contractor helps create during their employment or contract. In such cases, an IP assignment agreement is required. 

Most countries have their own versions of these contracts with different legal requirements. If executed correctly, IP assignment agreements are legally binding contracts that also protect confidentiality. Note that errors may cause the agreement to be declared invalid. Unsure if you’re categorizing your workers correctly? Avoid misclassification with our essential guide.

Worker classification could cost you more than just a fine

3. IP assignment agreements are enforceable

Yes, intellectual property can be assigned or transferred and such agreements are legal and enforceable in Lithuania. The ownership of IP is covered by a mix of regulations and treaties.

IP is broken down into two areas: industrial property (patents, designs, and trademarks) and copyright (rights owned by writers and artists and the protection of works of literature, artistic works, music, TV shows, software, databases, advertising, and multimedia).

Industrial design is regulated by the State Patent Bureau and the Ministry of Culture oversees copyright protection. Lithuania is also a member of the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO, Paris Convention), and the European Patent Organization (EPO).

While IP assignment agreements are enforceable in Lithuania, some types of IP can affect the implementation/requirements of an assignment agreement.

For copyrights:

• In Lithuania, the author is granted moral rights (for example, the right to be identified as the author and the right to protect the integrity of the work) and economic rights (financial benefits). Moral rights cannot be assigned or transferred, while economic rights can, even to a third party. 
• If the work was created under an employment contract, the employer is considered the first owner of economic rights.
• The transfer of an author’s economic rights must be in writing for it to be legally binding. 
• The transfer of rights must include all relevant details and conditions of termination.

For patent protection and industrial designs:

Patents provide legal protection for an invention, granting exclusive rights to either the creator or their employer. The duration of the protection period is 20 years.

• The patent can be filed by either party.
• The right to patent is determined by the employment (or stand-alone) contact between the employer and the worker. 
• The inventor is entitled to remuneration for the use of the design. This must be included in a contract. 

4. Contractors own the copyright to their work unless you override this in a written agreement

In Lithuania, when a contractor creates a work, the author retains the economic rights unless there is a specific agreement that transfers these rights. Economic rights pertain to the financial benefits gained from using the work. It is important that the contract is in writing and clearly outlines the intended usage of the work.

5. You have to localize IP ownership clauses to Lithuania

Lithuanian and EU intellectual property laws differ from those in other countries, including the US. Lithuania doesn't utilize the "work for hire" concept common in the US. In most cases, IP created in Lithuania is owned by the creator—unless there is a binding agreement assigning those rights. One important exception relates to works created during employment. In this case, the employer is recognized as the first owner for five years. Trademarks, designs, and patents need protection specific to Lithuania and the European Union.

Our team of experts can help you navigate the complexity of Lithuanian IP law

6. Unlike in some countries, the moral rights of an author cannot be transferred or waived

In Lithuania, creators of works are granted moral rights, which include the right to preserve the integrity of their work and be acknowledged as its author. Moral rights cannot be transferred.

Frequently asked questions about IP law in Lithuania

Who owns ip in lithuania: employee or employer.

In most cases, the employer owns the rights to IP created by an employee. In the case of copyright, economic rights (financial benefits) are transferred to the employer. This is usually for five years or as stipulated in a legal agreement. Moral rights (the right to be identified as the author and the right to protect the integrity of the work) remain with the creator. Computer programs created by an employee or contractor are owned by the employer. 

What is a CIIA agreement?

CIIA denotes a Confidential Information and Invention Assignment. This is just another name for a Proprietary Information and Inventions Assignment (PIIA). Some other names this type of agreement may go by include:

• Employee Confidentiality and Inventions Assignment Agreement
• Proprietary Information Agreement
• Employee Intellectual Property Assignment Agreement
• Protection of Company Interests Agreement

What is a PIIA agreement?

A Proprietary Information and Inventions Assignment Agreement (PIIA) is a legally binding contract that sets out the ownership and protection of intellectual property created by an employee or contractor during their work engagement with a company.

Are PIIAs and NDAs the same thing?

No. NDAs generally apply to IP and protected assets that already exist at the time the contract is signed.

In some jurisdictions, a Proprietary Information and Inventions Assignment Agreement (PIIA) applies to IP and protected assets the employee or contractor creates during their employment or work arrangement. An IP assignment agreement is used. 

What is an IP assignment agreement? 

An IP assignment agreement is a legal contract that establishes the ownership of intellectual property. It is used to transfer ownership of IP (copyrights, trademarks, and trade secrets) to another party. An IP agreement ensures that when an employee contributes to the development and creation of IP on behalf of a company, the company can maintain ownership rights. In Lithuania, intellectual property can be transferred through assignment or license agreements, inheritance, and other legal means. Lithuania follows European intellectual property protection regulations.

Which Lithuanian and EU agencies deal with IP?

These are some of the agencies that oversee IP in Lithuania: 

• State Patent Bureau of the Republic of Lithuania (VPB) : Patent law and trademark law. Located in Vilnius. 
• The European Patent Office : For applying for patents across multiple EU member states. Headquartered in Munich, Germany. 
• Association LATGA : Administers the rights of copyright holders in Lithuania. Located in Vilnius. 
• Ministry of Culture of the Republic of Lithuania : Responsible for copyright policy and legislation. Located in Vilnius.
• European Union Intellectual Property Office (EUIPO) : For EU-wide trademark protection. Located in Alicante, Spain. 

International treaties like the Patent Cooperation Treaty , the European Patent Convention (EPC) (patents), and the Madrid Protocol (trademarks) assist in IP protection in Lithuania.

Are IP regulations in Lithuania the same as in the US?

No. US patent and trademark registrations will not protect your IP rights in Lithuania or the European Union. Not only that, IP is protected differently in Lithuania. So, if you’re hiring employees or contractors in Lithuania, you need to protect your IP assets under Lithuanian law. Some US-copyrighted works may be protected in Lithuania by international copyright agreements.

Can I protect my trademark in Lithuania?

Yes. You can register your trademark at the State Patent Bureau of the Republic of Lithuania (VPB) or, if you’re seeking EU-wide protection, you can apply at the European Union Intellectual Property Office (EUIPO).

It can take 6-8 months to verify a trademark and approve the application. This time frame includes a three-month period allowing other parties to challenge the registration. Lithuanian trademark registration is valid for 10 years and may be renewed in 10-year periods with no limitation.

Lithuania is a member of the Madrid Union, which extends international trademark registrations via the Madrid Protocol.

What are the differences between an invention and a utility model?

An invention is new, innovative, and offers a new way of accomplishing a task. A patent grants the right to protect an invention to either the inventor or a delegate that holds the rights to the invention. To obtain a patent, an application must be filed that discloses the invention’s technical information.

In many countries, a utility model (also known as a minor invention) provides protection for improvements, amendments, or adaptations of existing products. Utility models are generally used for advancements in mechanical technology. The principles governing the right to protection for a utility model are comparable to those for an invention.

However, there is no utility model protection in Lithuania. 

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Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.

A Vancouver-based B2B and business trends writer, Doug is a charter member of the global workforce, having lived and worked out of Scotland, Ireland, Mexico, Guatemala, Ghana and, of course, Canada.

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