Assignment Agreement: IP Tool Box Series

In this ‘IP Tool Box Series,’ I’ll be discussing the ever important, Assignment Agreement. I’ll explain what it is, why it is an important tool, and why it should be considered more than just a clerical form.

What an Assignment Agreement is:

An Assignment Agreement, as the name implies, is a contractual Agreement that Assigns or transfers property rights from one person or entity to another. The type of Assignment used frequently in Intellectual Property Law, is an Assignment of Patent Rights. An Assignment Agreement can also be used to transfer rights held in any intangible property, e.g. Trademarks, Patents, Copyrights, Trade Secrets, Trade Names. Assignment Agreements are governed by Federal Law, State Law, or International Treaty, which vary depending on the nature of the Agreement and the type of property being sold.

An Assignment Agreement is also a legal record that certifies the transfer of ownership of Intellectual Property rights. In an Assignment document, there are two parties, one party is the Assignor (giving party) and the second party is the Assignee (receiving party). In Intellectual Property Law, Assignments are generally recorded with the Assignment Branch of the United States Patent and Trademark Office (USPTO). The USPTO provides separate systems for recording Trademark Assignments and Patent Assignments, but a standard Assignment form is not provided for either. There is, however, a standard layout and crucial content that an experienced IP Attorney can ensure is included in your Assignment.

Why an Assignment Agreement is Important:

An Assignment Agreement has several applications, including its use as an initial Employment Form. For example, a company would require all inventors to sign an Assignment form, before they could begin researching and developing products. In this instance, the inventors assign their rights to the company they work for. A correctly executed Assignment Agreement can prevent any potential for an unlawful claim of ownership by the inventor/employee. An attorney can assist in drafting Inventor Assignments and other related employment documents for startup companies, but also for existing companies needing to rectify a situation where Employment Forms were not presented to a current employee/inventor.

An Assignment Agreement is also useful for those businesses looking to be ‘investor ready.’ One sign of an investor ready startup company is having Intellectual Property Assignment Agreements in order. This way, the property is in condition to be transferred with a supplemental Assignment Agreement. A professionally executed Assignment also lets a potential investor know that the intellectual property they would be investing in is lawfully owned by the startup company or founder. For investors, an attorney can help them to satisfy their ‘due diligence’ by confirming a seller has the rights to lawfully sell their intellectual property. It is a buyer’s responsibility to ensure a seller has complete rights to sell the property. In the reverse, for those selling the rights to their intellectual property, an attorney can also help confirm the right to sell.

The value of an Assignment Agreement is in how it is written. A thorough Assignment should do more than document ownership; it should acknowledge rights and establish responsibilities and liability obligations. One common responsibility that would be disastrous if missed, is the responsibility to pay Trademark or Patent Renewal/Maintenance Fees. Missing this detail would result in the assigned property lapsing and becoming unenforceable. Indemnifications are also included in a typical Assignment Agreement. The indemnification section sites future obligations, in the case where the Intellectual Property being sold is later found to infringe on another’s rights.

Why the Assignment Agreement is more than just a form:

One can find and download a typical Assignment form and complete it with limited guidance, but an experienced attorney could prove invaluable. Depending on how it is written and what legal jargon is used, Assignments can be misleading. The document could be so broad that a seller assigns more of their rights or property than they intended. Alternatively, a buyer could potentially buy nothing or less than they expected. An attorney ensures the provisions of your Intellectual Property Assignment are correct and give you the results you’re expecting.

Also, as mentioned, there are many types of property that can be transferred using an Assignment, and there are varying rules that govern each. For example, to transfer ownership of a Trademark, an Assignment Agreement must include the transfer of ‘goodwill’ otherwise the Assignment is invalid. In the case of a Patent Cooperation Treaty (PCT) application, an Assignment Agreement must be signed before the application is filed. Otherwise, you risk jeopardizing your patent rights in some country jurisdictions. The rules for Assignments can be tricky, because the rules for patents and their Assignments are based on the National Phase rules of each country. An attorney would help identify the rules for transfer of ownership and the registration requirements for the specific type(s) of intellectual property you’re interested in transferring.

Don’t leave a matter as important as your intellectual property to an online form. Willing help in the form of an experienced legal team is here and is just a call away. Please contact us if you have been presented with an Assignment Agreement or need one to protect your intellectual property.