An Intellectual Property Assignment and License Agreement is a unique agreement whereby one party, the assignor, transfers to another party, the assignee, the rights to its intellectual property, whether in copyright, trademark, or patent, to in exchange for valuable consideration, and in exchange for the transferee returning to the transferor a license to use the intellectual property. Thus, in such an agreement, ownership of the intellectual property rights has been transferred, but the transferring party may still use the copyright, trademark or patent, subject to the terms and conditions of the agreement. . Unless otherwise stated, the rights, at least for the duration of the license, are not exclusive, as both parties have the right to use the property.
Because the agreement is so unique, the drafter of an IP Assignment and License Agreement must be sure to carefully set out 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, assignment, conveyance, and surrender of all property and all other right, title, and interest in the property. The transferee should also require further assurance that the transferor will execute all documents and do all other things deemed necessary to perfect, establish, protect, prosecute, defend, and enforce the transferee’s right to the property, which could include things such as filing certain documents with the federal government.
2. Compensation – This section should address what the transferee is giving up in exchange for the IP rights. It could be a cash payment, a stock payment, a combination of the two, or some other form of payment together. If it is an agreement with a subsidiary company, there may be no consideration at all. Generally, though, the purchase price is substantial for valuable intellectual property rights, as it’s not unusual to see hundreds of thousands, if not millions, of shares up for grabs.
3. Rights – The property rights that the Assignor assigns to the Assignee must be described here. Intellectual property rights fall under the categories of copyright, trademark, or patent. Many times a company will have a trademark for a name and also a patent for that service.
4. License to the assignor – The terms of the “return of license” to the Assignor must be addressed here. For example, this paragraph might read: “As additional consideration for the assignment, the assignee will grant to the Assignor a worldwide, exclusive, royalty-free right and license to manufacture, use, sell, offer for sale, and import 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 Licensor’s right to use the intellectual property. The agreement must also indicate the term, that is, the duration of the license.
5. General Provisions – The agreement must address the rules governing the right of the Licensor/Licensee to sublicense the property or the obligation to refrain from sublicensing the property. The agreement must also address issues such as assignment, relinquishment, and applicable law.
These are the most important provisions involved in an Intellectual Property Assignment and License Agreement. For more information, or to read and download the actual Intellectual Property Agreements, please see the Agreements section of this website.