An Intellectual Property Assignment and License Agreement is a unique agreement whereby one party, the assignor, transfers to another party, the assignee, rights to their intellectual property, be it in a copyright, trademark, or patent, in exchange for valuable consideration, and in exchange for the assignee assigning back to the assignor a license to use the intellectual property. Thus, in such an arrangement, ownership to the intellectual property rights has been transferred, but the assigning party is still able to use the copyright, trademark, or patent, subject to the terms and conditions of the agreement. Unless stated otherwise, the rights, for the duration of the license at least, are thus non-exclusive, as both parties have the right to use property.
Because the arrangement is so unique, a drafter of an IP Assignment and License Agreement must be sure to carefully state the rights and obligations of each party. The following are the most important areas to address:
1. Assignment – The agreement must first address the parameters of the assignment. This generally involves a full and irrevocable transfer, assign, conveying, and delivering of all proprietary ownership and all other right, title, and interest in and to the property. The assignee should also require further assurances that the assignor will execute all documents and do all other things deemed necessary to perfect, establish, protect, prosecute, defend, and enforce assignee’s right to the property, which could include things like filing certain documents with the Federal Government.
2. Compensation – This section must address what the assignee is giving up in exchange for the intellectual property rights. It could be a cash payment, a stock payment, a mixture of both, or some other form of payment altogether. If it is an agreement with a subsidiary company, there may not be any consideration at all. Generally though, the purchase price is substantial for valuable intellectual property rights, as it is not unusual to see hundreds of thousands, if not millions, shares of stock in play.
3. Rights – The actual rights being assigned by Assignor to Assignee must be described here. Intellectual Property rights fall into the categories of copyrights, trademarks, or patents. Many times a company will have a trademark to a name and as well as a patent to that service.
4. License to Assignor – Here the terms of the “license back” to the Assignor should be addressed. For example, this paragraph could state: “In further consideration for the assignment, the assignee will grant to Assignor a worldwide, exclusive, royalty-free right and license for the purposes of making, using, selling, offering for sale, and importing products.” The key is to outline the scope of the license, whether it is exclusive or non-exclusive, what territory it covers, and whether there are any limitations on the Assignor’s right to use the intellectual property. The agreement must also state the term, i.e. length, of the license.
5. General Provisions – The agreement should address the rules governing the Assignor/Licensee’s right to sublicense the property or obligation to refrain from sublicensing the property. The agreement should also address issues such as assignment, waiver, and governing law.
These are the most important provisions involved in an Intellectual Property Assignment and License Agreement. For further information, or to read and download actual Intellectual Property Agreements, please see the Agreements section of this website.