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Intellectual Property Agreement Template
Free Intellectual Property Agreement Sample
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What is an intellectual property contract?
An intellectual property agreement is a formal contract between employees and employers that outline the terms and conditions for how an organization’s intellectual property is protected when employees create inventions as a function of their job.
DISCLAIMER : We are not lawyers or a law firm and we do not provide legal, business or tax advice. We recommend you consult a lawyer or other appropriate professional before using any templates or agreements from this website.
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Intellectual property assignment: What it is and how to make one
Find out more about business management
by LegalZoom staff
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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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Drafting Intellectual Property Rights Transfer Agreements - Part II
Home | Knowledge Center | Thought Papers Drafting Intellectual Property Rights Transfer Agreements - Part II
06th Aug, 2020
- Corporate and M&A
In the first part of this series on intellectual property (“ IP ”) transfers available here , we discussed the legal provisions governing assignment and license of IP. In this second part, we will discuss the various transfer related clauses in IP assignment and license agreements and the manner in which these clauses must be drafted.
As discussed in the first paper of this series, IP can either be assigned or licensed by the owner, allowing the commercial use of the asset in various forms. Apart from this, various other commercial arrangements also lead to the creation of IP. For instance, IP can be created under an employment agreement, a collaboration among multiple persons, a commissioning agreement or a consulting agreement. These are just a few examples. In all the above circumstances, it is important to have an effective contract that clearly establishes the rights held by the parties concerned. In this paper we cover two issues. First, we will look at certain crucial clauses that are an integral part of IP transfer agreements, and broadly discuss the structure and framing of these clauses. Second, we will look at some specific types of agreements dealing with IP creation and transfer, and also cover some of the key commercial and legal aspects of these agreements.
Generally, in agreements concerning the use and/or transfer of IP, the following clauses are important:
1. Assignment:
In any IP assignment, there is a clause specifically assigning/transferring the title in the IP from the assignor to the assignee. This clause must clearly state the extent of the rights that are being granted to the assignee. Assignments must contain express language such as “hereby assigns”, which indicates that the assignor is assigning rights in an existing or a future work in the present. [1]
Example: “Rights granted– X hereby grants, conveys and assigns to Y all the rights in the [Work], including without limitation the following exclusive rights throughout the Territory (as defined in clause [•]) for the Term (as defined in clause [•]) –
- insert a list of all rights in relation to the [Work] that are being assigned -"
Points to remember:
1.1. Work/invention/mark/property: It is advisable for the agreement to have a specific definition for the work or the invention or other IP that is being assigned. In this way, the assignment clause can be short and precise without having to define the work/invention that is being assigned.
1.2. Indicative list of rights: The assignment clause must contain an indicative list of rights, i.e., a list of ways in which the assignee may use the work/invention. These words are normally borrowed from the statute but drafted in a manner that is consistent with the intent of the parties. For instance, in the case of a cinematograph film, one of the rights assigned would be the right to make, sell, distribute copies of the film and communicate the film to the public.
2. License:
In an agreement where IP is licensed, there is no transfer of title. Therefore, the agreement must contain a clause demarcating the specific rights of use granted to the licensee. It is advisable to use clear terms such as “hereby grants a license”.
Example: “Grant of License– The Licensor hereby grants to the Licensee a non-exclusive, non-transferable, non-sub-licensable, non-delegable and conditional license to use in the manner agreed hereinbelow, the Trademark, solely in relation to the business operations of the Licensee, within the Territory and for the Term:
- insert a list of all rights in relation to the trademark that are being licensed -"
2.1. Intellectual Property: The IP, whether it is a work/invention or trademark, that is being licensed must be specifically defined in a separate clause. As stated in 1.1 above, it makes for easier and cleaner drafting of the license clause.
2.2. Exclusive/non-exclusive: This is the most important part of the license grant which must clearly indicate whether the license is exclusive or non-exclusive.
2.3. Sublicense/further transfers: If the intention of the parties is that the license remains with the licensee alone, the clause must specify that the licensee does not have the authority to sub-license or further transfer the rights granted under the license.
2.4. Indicative list of rights: Given that a license can be far more limited than an assignment in its scope, it is advisable to include a list of specific uses that are permissible under the license. Further, the licensor may also clarify that the licensee is not permitted to do anything other than what is stated in the license.
2.5. The ownership of any IP must be mentioned, and the licensor must have the right to immediately know when there is a possibility that the IP may have been infringed by a third-party.
3. Term and termination:
The assignment or license agreement must contain separate clauses defining the term and instances when the agreement can be terminated.
a. “The rights assigned herein shall be irrevocable and shall be vested in the assignee for perpetuity including without limitation, for the full term of copyright protection everywhere in the world and any and all renewals, extensions and revivals thereof.”
b. “This License shall come into effect on the Effective Date and shall remain valid and binding on the Parties until such time that it is terminated in accordance with clause [•] of this Agreement.”
c. “This License shall come into effect on the Effective Date and shall remain valid for a period of 5 (five) years from the effective date unless it is terminated in accordance with clause [•] of this Agreement.”
Termination:
“This Agreement may be terminated: a) by mutual agreement of the Parties; or b) on a material breach of any provision of this Agreement by the other Party, provided however that in case of a breach capable of remedy, only if the breach is not remedied by the other Party within the Notice Period. Upon termination: a) either Party shall forthwith hand over to the other Party all documents, material and any other property belonging to the other Party that may be in the possession of the Party or any of its employees or agents; b) each Party shall immediately pay all pending fees or other amounts due to the other Party under this Agreement.”
3.1. Term: The term of the assignment or license can be anything that the parties choose. However, the outer limit of the grant is determined by the term specified in the statute for the IP. For instance, the term of a patent is 25 (twenty- five) years from the date of the application beyond which period the invention enters the public domain.
3.2. Termination: This clause must be drafted with care and caution bearing in mind the agreement between the parties. Further, if the agreement involves promises that can only be performed by a specific individual, termination by such party must not be permitted. In any event, if the assignment is irrevocable in nature, termination must not be permitted unless there is a material breach and terminating party must be required to serve adequate notice. Once the agreement is terminated, the IP will revert to the assignor or the licensor, as the case may be. Any IP that still remains with the transferee must be returned to the transferor or destroyed (when appropriate) upon termination.
4. Territory:
The territory for which the IP is assigned is crucial to be specified in the agreement. The same IP can be assigned or licensed to two or more separate entities for use and exploitation in different territories. If this is not clearly specified in the agreement, the territory might be deemed to be India as a whole. This would render any subsequent assignment or license impossible to carry out.
Example: “The assignment/license granted herein shall be exercisable within the territory of India (“Territory”).”
5. Consideration:
The agreement must contain a clause on consideration or fees/payment to be made for transfer of the IP. This clause must define the manner in which payments will be made by the assignee or licensee. There are several ways in which payment terms can be structured; some of the most common modes are discussed below:
5.1. Lumpsum payments: IP rights can be granted in exchange for a lumpsum payment where the grantee can pay a specific sum of money in the manner prescribed under the agreement. This amount can be paid either as a single payment or in instalments.
a. “In consideration of Licensor granting a license to use the Intellectual Property in terms of this Agreement, the Licensee shall pay a monthly fee of Rs. [•] ([•]) to the Licensor (“License Fee”).
The Licensee shall pay the License Fee to the Licensor by way of wire transfer, no later than [7 (seven) days] prior to the commencement of each month.”
b. “As consideration for all the rights granted and assigned in the Intellectual Property by the Assignor, the Assignee agrees to pay a sum of Rs. [•] ([•]) to the Assignor in the following manner:
i. Rs. [•] ([•]) via -insert mode of payment- on the Execution Date;
ii. The remaining sum of Rs. [•] ([•]) via -insert mode of payment- no later than -insert date- ”
5.1.1. In the event the parties agree on payment in instalments, the agreement must clearly specify the schedule.
5.1.2. The mode of payments which are acceptable to both parties must be specified.
5.1.3. The agreement must also provide for consequences of delay in payment, if any.
5.1.4. The payments clause must specify the taxes, if any, that are deductible.
5.2. Royalty: In consideration for the rights granted, the assignor or licensor may also require that royalty be paid. Typically, royalty payments will be a portion of the sales revenue earned by the use/exploitation of the IP rights granted.
a. “In consideration of the rights granted in clause [•], the Licensee shall pay to Licensor a royalty (the “Royalty”) equal to [•]% of Net Sales occurring during the Royalty Term. The royalty under this clause shall be payable no later than 5 (five) business days after the last day of every quarter.”
b. “Royalty will accrue upon distribution of any copy of [software] delivered or sold in the manner specified in clause [•]. Rs. [•]/[•]% of the sale price of any copy of [software] shall be payable as royalty on each copy sold. All accrued Royalty shall be paid to the Licensor within [•] days after the end of each fiscal quarter, which ends on the last day of each of March, June, September and December. Payments shall be accompanied by a report stating the number of units of [software] sold/distributed in the relevant quarter, and the calculation of the royalty payment.
5.2.1. While royalty is typically represented as a percentage portion of the net sales revenue, it can be structured in any manner as the parties deem fit.
5.2.2. Royalty must be payable for the royalty term, which can either be for the whole term of the agreement or only a part of the term.
5.2.3. The schedule for payment must be specific and must always be accompanied by proper accounts for the relevant period showing the manner in which royalty payments have been calculated.
5.2.4. The agreement must also provide for consequences of delay in payment, if any.
5.2.5. The payments clause must specify the taxes, if any, that are deductible.
5.2.6. The method and frequency of invoicing must also be included.
6. Representations, warranties and covenants:
Apart from the representations and warranties that are usually included in agreements, including in relation to capacity and execution, there are certain specific warranties that should be included in IP related agreements.
6.1. The person granting the rights must represent that he has the sole and absolute ownership of the IP and is therefore entitled to grant rights either by way of assignment or license.
6.2. The person granting the rights must also represent that the IP in which the rights are being granted does not infringe any third party’s IP rights.
7. Indemnity
The person granting the rights must ordinarily indemnify the other party from any legal proceedings or costs arising as a result of defective title in the IP or any third-party claims of infringement. The person granting the rights, especially in a license, must be indemnified against all illegal and improper uses of the IP including indemnification against any legal proceedings that may arise as a result of such actions of the grantee.
8. Further assignments:
Depending on the rights being granted and the discussions between parties, the rights that are being transferred may be further assigned by the parties. Note however, there must be a clear bar on further assignment of rights and obligations especially when the promises made by the parties concerned are personal in nature.
9. Standard form clauses:
Other than the specific terms detailed above, all the standard form clauses that find their place in other agreements must also be included in IP assignments and licenses.
In this part we will discuss certain specific types of agreements and clauses in relation to copyrights, patents and trademarks.
1. Copyright:
1.1. Film-related agreements: The producer of a film is the author of a film. [2] The producer enters into several agreements including with writers, composers of music, etc. in order to create various works which will be included in the film. An effective contract between the producer and other authors such as the music composer, writer, etc. would help avoid any disputes as to the ownership of the film and the use of other content in the making of the film. The producer also enters into agreements with financiers to finance the making of the film, and with distributors and digital partners. Some aspects of these agreements have been discussed below:
1.1.1. Agreement with composer of music: It is industry practice for the producer of a film to engage the music composer to compose the music and the background score for the film. Under the Copyright Act, 1957 (“ Copyright Act ”), the composer is the author of the musical work. It is often the case that until the release of the film the producer retains the copyrights in all the musical works by entering into a contract of service with the music composer. [3]
The producer, as the owner of the copyright in the musical works under a contract of service, can either retain all the copyrights or assign the rights to a music label. Usually, when the producer assigns the rights in the musical works to a music label, the producer, who is the owner of the film, retains the right to use the sound recording as a part of the film, and the music label would then hold the rights in the sound recordings and the underlying musical works, and can commercialize such music through sales or further licenses. The basic goal here is for the producer to leverage the rights in the music in a profitable manner.
While this is generally the industry practice, it is legally possible for a composer to retain the rights in his works. Such an agreement would encompass a limited license from the composer allowing the use of the musical works in the film by the producer.
1.1.2. Agreement with lyricist: Similar to the composer, the lyricist is also engaged by the producer to write the lyrics for various songs that are usually part of Indian films. Copyrights in lyrics, which are literary works as per the Copyright Act, will be retained by the producer or transferred by him to the music label. The lyricist is also eligible to receive unassignable royalty from the use of the lyrics.
i. To protect the interests of the producer, the agreement with the composer and lyricist must contain a clause that clearly states that all the IP in the musical and literary works will belong to the producer.
ii. In appropriate circumstances, it is also prudent to include a clause giving creative control over the final product to the producer.
iii. As discussed in Section 1.2.2 of the first paper in this series, composers and lyricists continue to retain unassignable royalty rights in the musical works.
iv. These agreements must contain a clause with specific timelines within which the composer must deliver the musical works.
1.1.3. Agreement with writers: The producer of a film usually engages more than one writer to write the story, script, screenplay, dialogues, etc. These works amount to literary works under the Copyright Act. It has been held by the Madras High Court in Thiagarajan Kumararaja v. Capital Film Works, [4] that the producer of a film has the rights to dub the film into any number of languages and this right is part of her copyright under Section 14(d) of the Copyright Act. On the other hand, it has also been held that the producer can remake the film in any number of languages only if she owns the script because remaking a film would require changes being made to the underlying script. Therefore, where a producer proposes to remake the film in various languages, apart from permission to use the script for the making of the film itself, the producer needs to entirely retain the copyrights in the script in order to be able to remake the film. [5]
i. If it is the intention of the producer to make remakes or sequels of the film, it is advisable for her to ensure that she owns the script. Whether the agreement is a contract of service or otherwise, it is prudent to have an IP clause specifically stating that the producer seeks to own the script.
ii. On the other hand, if the writer owns the script, any remake can only be made with a license from the writer.
iii. The contract must specify the degree of creative control each party has over the script or story.
iv. If the producer seeks to own the script in its entirety, she must also ensure this includes the characters and other distinctive elements of the script. [6]
v. This agreement must contain a clause with specific timelines within which the writers must deliver the scripts.
1.1.4. Agreements engaging principal director, actors and other individuals: Under Indian law, a director of a film does not have any copyrights in any aspect of the film. Therefore, producers in India can enter into a regular contract of service with the director. There will be certain circumstances where the director is also the scriptwriter, in which cases there can be a common agreement which includes the terms in 1.1.3 above and the contain clauses covering her directorial responsibilities. The director will be remunerated for her services.
Additionally, there are agreements that the producer enters with actors and other artists. These agreements will define the roles and responsibilities of the actor and her remuneration. The actor or other artists typically do not own any of the copyrights in the content or the character.
1.1.5. Credits clauses under 1.1.1 to 1.1.4: The parties to these agreements must also approve the manner in which each of these persons is credited in the film.
Example: “The Parties agree that the Composer shall be credited in the film as “Music by ______” by the Producer. The Composer shall have no copyrights in the sound recordings or the Musical Works in the film by way of such credits.”
1.1.6. Financing agreement/film investment agreement: The producer can enter into agreements with various persons for raising funds to make a film. These agreements can be structured in many ways and might in certain cases result in transfer of ownership of IP. Some types of investment agreements are discussed below:
i. Film investment agreement: The producer and the third-party investor can agree to co-produce the film. In these cases, the parties must arrive at a revenue sharing arrangement. The co-producer will also have a share in the IP that is consequential to the extent of investment.
ii. Rights agreement: The producer can, in exchange for money, grant the financier some right in the IP. For instance, if the producer seeks an investment of Rupees Fifty Lakhs, he can grant the dubbing rights, or overseas distribution rights in exchange for the same. Such agreements work just like assignments or exclusive licenses but are a useful way in which producers can raise funds.
1.1.7. Theatrical distribution agreement: Producers must also enter into various distribution agreements with several distributors for distributing the film in theatres in various territories. Essentially, what the distributor receives under these agreements is a limited license or assignment to communicate the film to the public through theatrical distribution. The term of these agreements is limited to the period during which the film would be distributed in theatres.
Example: “In consideration of the mutual promises, payments and other terms contained herein, Producer hereby exclusively [assigns/licenses] to the Distributor the right to communicate the Film to the public only via theatrical distribution in the Territory for the Term.”
1.1.8. Production of television/web-series/other shows/online content: For the production of any other content, all the agreements described in 1.1.1 to 1.1.8 will be used. However, the manner in which the IP is shared and owned may differ depending upon the facts and circumstances of each case. For example, let us say XYZ Pvt. Ltd. is producing a stand-up comedy special with a prominent comedian Mr. P. The parties can agree that the content will be written, performed and, therefore, owned by Mr. P, and where XYZ Pvt. Ltd. only takes a commission and a share of the revenue.
1.2. Album production:
1.2.1. Agreements with music composers and lyricists: These agreements are similar to the agreements described in 1.1.1 and 1.1.2 above. The producer of the sound recording may engage composers and lyricists and seek to retain the copyrights in the underlying works along with the sound recording he produces and owns.
1.2.2. Agreement with the singers/other artists: The singers and other artists are usually engaged under a contract of service to sing in a studio, which performance is recorded, edited and produced into a sound recording at the instance of the producer. The singer does not own the copyright in the musical work, literary work or the sound recording itself.
1.3. Digital distribution of copyrighted works: Songs, films or any other copyrighted content can be distributed and communicated to the public through a variety of digital platforms. Today, most popular among these are OTT platforms such as Netflix, Prime Video, etc. Typically, these entities enter into either an exclusive license with the owner of the content for a particular term and for a specific territory. Since these entities are able to geo-block the content, they avail territory specific licenses for various titles. Therefore, a TV series that is available in the United States of America on X OTT service, may instead be available on Y OTT service in India. These entities do not seek a complete transfer of title typically but restrict themselves to a license for a specified term.
i. The agreements must contain a schedule detaining the timeline for delivery of prints and materials to the platform along with the technical specifications for such materials.
ii. Clauses must specify the manner of use of any trademarks and other artwork belonging to either party.
iii. The consideration or license fee can pe paid in a single lumpsum payment or be divided into instalments.
1.4. Book publishing agreements: These agreements are entered between the authors of books and publishers. Under the Copyright Act, the author of a literary work has the right to make copies of her work and sell them. However, such rights are normally transferred to publishing houses that have the means to mass produce the book and aid in the distribution of the work. This may also include various formats in physical or digital form. The rights granted could also include the right to translate the books into various languages. Typically, the author retains the right to make film/television adaptations of the book.
Example: “The Author grants the Publisher the exclusive right during the Term to reproduce, print, publish, distribute, translate, display and transmit the Work, in whole and in part, in the Territory, in such languages and formats as agreed to between the Parties. It is clarified that no film, motion picture, television, radio, dramatic or other adaptation rights are granted to the Publisher and the Author can exploit such rights.”
i. Publishing agreements must contain detailed clauses on when the author will deliver the work to the publisher.
ii. The acceptance of the work for publication is usually left to the discretion of the publisher.
iii. The author gives the publisher the sole and exclusive right to publish and distribute the work. The author, however, may retain other rights such as the right to translate the work, the right to make adaptations, the right to make films, etc.
iv. The author is usually paid a certain advance amount on the date of signing of the agreement. Additionally, royalties may be paid to the author for the sale of each copy of the work payable as a percentage portion of the net sales revenue earned by the publisher.
v. The onus of receiving any prior approvals for copyrighted works to be included in the book usually lies with the author.
1.4.1. Option Purchase agreements: Such agreements are typically entered into between the author of the book and a producer. The agreement grants an option to a purchaser to avail an assignment or a license at a future date to make film/television/digital adaptations of the book. For example, A, the author of a book, can enter into an option-purchase agreement with B who wants to make a film-adaptation of the book. The option purchase agreement will give B a specific timeframe for some groundwork such as testing the viability of the project, raising funds, etc. At the end of the option period, B can exercise the option and have the adaption rights assigned or licensed to her. The author is usually offered an option-fee for the period during which the grantee-purchaser holds on to the option. Once the option is exercised, the parties can enter into an assignment or a license agreement as the case may be.
1.4.2. Adaptation agreement: If the film is based on a story or book written by a third-party upon which the producer seeks to rely, then the producer may avail an adaptation license from the author of the literary work.
1.5. Software license: In India, software is a subject matter of copyright law. The person writing and creating the program holds a copyright over it. The software can therefore be licensed by the owner for use by another entity. Software licenses are normally granted by companies to their users usually based on a subscription fee model.
Example: “Entity hereby grants the customer a non-exclusive, non-sublicensable, non-assignable, world-wide license to use the Service solely for the internal business operations of the customer in accordance with the terms of use specified herein.”
1.5.1. Platform licenses for user-generated content: If the software is such that it allows the creation, storage and dissemination of user-generated content, the entity licensing the software must also take a license from each user to store and disseminate the user-generated content. For instance, with applications such as YouTube or TikTok, such a license would be required from the user. The clause must clarify that the user agrees to a non-exclusive, non-sublicensable, non-assignable, royalty-free license to be granted to the entity for the use of the content while the user continues to retain all the copyrights in the content.
1.5.2. Software as a service: Typically, in these agreements, there is an entity that has developed a software and provides services that aid in the productive use of such software. The entity enters into an agreement with the customer granting a customer a license to use the software for its business operations while the entity retains the IP in the software.
Example: “The Company agrees to license and grant access and right to use the Application to the Subscriber and provide to the Subscriber all other services necessary for the productive use of the Application, including, initial setup and installation, user identification, user account and password change management, data import/export, remote technical support, maintenance, training, backup and recovery, and change management ("Services") as further set forth in Schedule [•] of this Agreement.”
i. These agreements must contain a clause preventing any reverse engineering of the software and controlling security breaches. This would also include clauses pertaining to data security and data protection.
ii. The data that belongs to the customer will continue to belong to her while the licensor/service provider will continue to own the software.
1.5.3. Software development agreement: In certain cases, one may choose to engage the services of a third-party software developer to develop a software or product under a contract of service. For instance, A may have a concept or idea but may not have the expertise to engineer the product. A can engage the services of B, third-party developer, to develop the product. B will be remunerated for his services. But A, whose resources (typically monetary resources as A would bear the operational costs) were expended on developing the product, will be the owner of the IP in the product.
Example: “The Service Provider agrees that all original works that are made by the Service Provider (solely or jointly with others) using the Company’s resources, or any other assistance that may be provided by the Company, pursuant to this Agreement, are protectable by copyright as “works made under a contract of service” under the Copyright Act, 1957.
The Service Provider hereby agrees to transfer and assign all intellectual property rights that may be developed or created by it pursuant to this Agreement without any claim over any such work, and waives any other right that the Service Provider may have in law.”
1.5.4. Application programming interface (“API”) integration agreement: APIs are tools that permit interaction between various software intermediaries. In API integration agreements, (i) a party licenses its API (either on an exclusive basis or on a non-exclusive basis) to another party for integration of its API into the software (in the form of an app or website), or (ii) two parties propose to integrate their software to create a new product.
i. In these agreements, there must be a two-way obligation to keep the licensee’s tool/programme and the licensor’s API fully functional and usable at all times.
ii. These agreements would also contain clauses on data security, data protection and covenants on the basis that security breaches will be controlled and monitored.
iii. It must be specified that the integration agreement will not result in any transfer of IP and each party will continue to hold their IP rights. However, a limited right to use the tool and the API will be licensed to the other party for the duration of the agreement. In case a new product is created both parties hold rights in the IP jointly.
2. Trademark:
Trademarks can be assigned or licensed irrespective of whether they are registered or unregistered trademarks. Generally, all assignments and licenses of trademarks must be in conformity with the principles and rules under the Trademarks Act, 1999.
Apart from what is covered in Part I of this article, the following must be noted while drafting clauses on assignments and licenses of trademarks.
Assignment:
i. The grant clause in an assignment agreement must clearly specify whether the mark is being assigned together with the goodwill of the business or not.
ii. Assignment agreements must contain a clause/schedule describing all the trademarks that are being assigned, and details pertaining to their registration.
iii. The assignor must agree to execute all necessary documents in order to record the assignment with the Registrar of trademarks under Section 45 of the Trademarks Act.
i. Prevention of naked licensing: While licensing a trademark, the terms of use need to be specific and clear. If a license permits the unbridled use of a trademark without any quality assurance measures in place, such a license amounts to ‘naked licensing’. The clause must also state that the mark can only be used in relation to the goods and services specified in the agreement. Quality control is essential to protect the interests of both the licensor and the end-user of the product.
ii. There must be a separate clause defining the uses of the mark by the licensee that are permitted and uses that are strictly disallowed and not within the ambit of the license.
iii. The agreement must also include a clause stating that no rights in and to the trademarks are being transferred or assigned by virtue of the license.
iv. The more control the licensor would like to exercise over the use of the mark, the stronger must be the quality, use and termination clauses of the agreement.
v. It must be specified that the licensee shall not have the right to further assign or license the mark to any third-party.
Apart from these issues, transfer of trademarks through assignment and license might involve larger commercial arrangements that impact the creation, use and transfer of trademarks. Some of these are discussed below:
2.1. Transfer of trademark under a franchise agreement: Franchisors typically have proprietary methods of doing business and own trademarks which consumers come to solely associate with the business of the franchisor. Internationally renowned brands such as McDonalds or Krispy Kreme follow this business model where their businesses have proprietary elements which they license to local businesses all over the world. The businesses which acquire a license of this kind under a franchise agreement will have the right to set up a local unit of the franchisors business and run it as per the terms of the franchise agreement.
2.1.1. Use of the franchisor’s trademark: The main condition as to the use of the franchisor’s trademark is that the franchisee will be permitted to use the franchisor’s trademark in accordance with the terms specified in the franchise agreement. Please note that the agreement must clarify that this is a limited use license granted to the licensee and does not result in transfer of ownership. Further, in relation to the franchisor’s business, the franchisee shall not have the right to any mark other than the ones that it is authorized to use under the franchise agreement.
Example: “The Franchisee agrees that the Franchisor is the sole and exclusive owner of the TRADEMARKS and has the absolute right to control the Franchisee’s use of the TRADEMARKS. For removal of doubts, the Franchisee agrees and affirms that it has not acquired any right, title or interest in the TRADEMARKS and that its limited right to use the TRADEMARKS is governed by the terms of this agreement. Further, the Franchisee agrees that it shall not register, in its name or in the name of any associated entity or person, any trademark, logo or domain name that is identical or similar to the TRADEMARKS.”
i. The franchisee must not be permitted to take any action against any infringer without the prior consent of the franchisor. It is best for the franchisor to initiate any legal action as the sole and absolute owner of the mark.
ii. If the agreement is terminated, any action taken by the franchisee in respect of the trademarks must revert to the benefit of the franchisor and the franchisee must stop associating itself with the trademarks of the franchisor.
iii. There must be a clause allowing the franchisor to terminate the agreement if the trademark is used in a manner that would bring disrepute to the business of the franchisor.
iv. There must be clauses controlling the use of the trademark by the franchisee in advertising and marketing literature.
1.2. Marketing Agreement: A marketing agreement allows a third-party a limited right to display the trademarks of the licensor while marketing, advertising and selling products that belong to the licensor.
i. This agreement has to specify that the licensor continues to own the trademark and this agreement does not result in any transfer of ownership.
ii. Such a license must specify the manner in which the trademark is permitted to be used. Any contravention of such use restriction would amount to a material breach of the agreement.
Patents can be assigned or licensed for specific purposes meaning that patent rights can be granted to make, sell or import the subject matter of a patent.
Some specific agreements pertaining to patentable subject matter are discussed below:
3.1. Technology transfer agreement: Technology transfer agreements (“ TTA ”) involve the licensor transferring its IP and know-how to the transferee for a specific period of time and for a specific purpose. A large part of arrangements of this nature would depend on the specific facts and circumstances of each case. Not everything that is transferable under a TTA will be IP. One part of the transfer may relate to the licensing of IP such as patents or software for specific purposes, while the other would include information and know-how. Clauses in relation to the sharing of information and other know-how are strictly contractual and are secured by having strong confidentiality clauses in the agreement.
i. The agreement must define the IP or the technical know-how to be transferred clearly. The definition must be tightly worded so as to cover only what is necessary, failing which, the licensee will secure access to more than what was intended by the parties.
ii. The territory within which these rights can be exercised must be specific, and the term must also be specified. The term must be agreed upon based on prevailing norms of the Reserve Bank of India and other regulations in this regard. The termination clause must specify the consequences of early termination, reversion of the IP to the licensor, and, to the extent possible, destruction of any confidential material or information within the possession of the licensor.
iii. Consideration including royalty payments must be structured properly.
iv. As far as the know-how is concerned, the confidentiality clause matters the most. The confidential information must be clearly identified as such. If the information is highly technical, this clause must be drafted in an industry specific manner. The consequences for any breach must be clearly identified.
v. The tax liability under TTAs varies based on whether the parties are Indian or would include foreign collaborators. The tax liability clause must identify the manner in which all taxes must be paid.
vi. TTAs involve heavy obligations on both parties. The licensor must ensure that the technology is used properly and for that ensure that the licensee, at all times, has the technical capabilities that are required to achieve it. This may include training, testing, quality control and other measures. The licensee will have the responsibility to use the technology to the fullest, make all payments on time and to maintain confidentiality throughout the duration of the agreement.
vii. Use of other IP, i.e., brand names or other literature, must be carved out through separate clauses defining all permissible uses.
4. Employment agreement:
Employment agreements must typically contain a blanket clause allowing the use and transfer of all IP created by the employee, during the course of employment, by and to the employer, especially where the employee is a senior member of the team. The clause also grants exclusive rights in all such IP to the employer.
Example: “The Employee agrees that all and any work executed and performed in the course of employment, whether or not conducted on the premises of the Company but related to the business of the Company, is being done on behalf of the Company. In this regard any discoveries, inventions, work created, data produced, concepts, ideas, creations and discoveries belong to the Company. The Employee hereby agrees to transfer and assign all intellectual property rights that may be developed or created by her without any claim over any such work, and waives any other right that she may have in law.
The Employee further agrees to execute, upon the request of the Company all necessary papers and otherwise provide proper assistance to enable the Company to obtain for itself (and to vest legal title in the Company), patents, copyrights, or other legal protection for such inventions, discoveries, innovations, improvements, original works of authorship, trade secrets and technical or business information in any and all countries.”
In this article, which is the second of the two-part series on transfer of IP, we have discussed the manner in which various clauses in an IP transfer agreement must be drafted. There are several ways in which these agreements can be structured, but it is important to keep in mind the intention of the parties and the extent of rights that are to be granted. Similarly, rights must be granted in such a manner that would allow the full and proper use of the IP. Note that the example clauses given in this article are only indicative, and in any agreement, these clauses must be drafted to suit the relevant purpose and context.
This paper has been written by Suchita Ambadipudi (Partner) and Sheetal Srikanth (Associate).
[1] In Waterman v. MacKenzie et.al , 138 US 252, the Supreme Court of the United States held that to determine whether an agreement is an assignment or a license, the legal effect of the clauses and the grant must be considered and not the mere nomenclature of the agreement or the headings for various clauses.
[2] Section 2(d) and 2(uu), Copyright Act, 1957.
[3] Section 17, Copyright Act, 1957.
[4] 2018 (73) PTC 365 (Mad).
[5] For similar issues arising out of making a sequel of a film, see, Ian Eagles “Copyright and the Sequel: What Happens Next?” in F MacMillan (ed), New Directions in Copyright Law, Vol 6, (Edward Elgar Publishing, UK, 2007) pp. 35-65. See also, Zee Entertainment Enterprises Limited v. Ameya Vinod Khopkar Entertainment and Ors. , MANU/MH/0512/2020.
[6] For an overview of issues arising out of character- related rights, see, Arbaaz Khan Production Private Limited v. Northstar Entertainment Private Limited and Ors. , 2016 (67) PTC 525 (Bom).
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What are the types of technology transfer agreements?
Wipo model contracts for academic institutions, technology transfer agreements.
The transfer of knowledge and information about technology can take place in two ways: informally through transfer of knowledge, and formally through technology transfer agreements (contracts).
Informal transfer of knowledge is becoming more and more important in the academic environment as the mobility of researchers and students is greatly contributing to the dissemination of knowledge worldwide. Knowledge can also be transferred through publications, teaching, conferences, courses, presentations, meetings, informal exchanges and personal contacts between scientists, academia and industry.
In the context of formal channels of technology transfer , there is no such thing as a standard contract or agreement. Some universities and research institutions propose standard models as part of their IP policies, but such models are only to be used as a starting point, a support or a tool, and need to be adapted to the specific circumstances and requirements of each case. It is crucial to consult an IP lawyer from the beginning of the negotiation and in particular when signing the agreement.
There are different types of technology transfer agreements that are frequently used to transfer technology from lab to market .
Technology transfer licensing agreements
Assignments of intellectual property rights, confidentiality agreements, collaborative research agreements, consultancy agreements, sponsored research agreements, material transfer agreements, contract research agreements, academic spin-off agreements, university research-based start-up agreements, joint venture agreements.
In order to support academic institutions in the development and negotiation of technology transfer contracts, WIPO provides model agreements between academic institutions and industry partners. Since licensing is the most frequently used means for technology transfer, the models provide insights into different types of licensing agreements such as know-how licensing, exclusive, software licensing, etc. The models are accompanied by guidelines for customization focusing on challenging issues for technology transfer offices, such as negotiating an audit for royalty rates on the revenues collected by industry partners from sub licensees.
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Intellectual Property Agreement
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Free intellectual property agreement template.
Intellectual property (IP) is a cornerstone of innovation and creativity. It encompasses creations of the mind, from inventions and literary works to symbols, names, and images. Protecting these assets is crucial for businesses and individuals alike. Enter the Intellectual Property Agreement .
Definition and Purpose
An Intellectual Property Agreement is a legally binding contract between two parties, typically an employer and an employee, that outlines the ownership, transfer, and rights associated with intellectual property. This agreement ensures that any intellectual property created or identified during the tenure of employment is rightfully owned by the employer, unless otherwise stated.
Key Components of the Agreement
- Identification of Parties : This foundational section establishes the primary entities involved in the agreement, ensuring clarity from the outset.
- Transfer of Intellectual Property : This is the heart of the agreement, detailing the transfer of rights and interests in intellectual property created during the employment or collaboration period.
- Recognition of Pre-existing Property : Protecting the rights of creators, this clause ensures that intellectual property created before the agreement remains with its original owner.
- Term of Agreement : It’s crucial to know the duration for which the agreement is valid, including any post-termination rights, ensuring both parties are aware of their time-bound commitments.
- Jurisdiction and Law : Legal disputes can arise, and this section ensures that both parties are clear on which legal framework will be used to resolve them.
- Affirmation through Signature : Without this, the agreement isn’t validated. Both parties’ signatures cement their commitment to the terms laid out in the document.
Why Use an Intellectual Property Agreement Template?
In today’s digital age, where ideas can be as valuable as tangible assets, it’s imperative to safeguard your intellectual property. Using an Intellectual Property Agreement template ensures that all essential clauses are covered, reducing the risk of disputes and misunderstandings in the future.
Benefits of Using an Intellectual Property Agreement Template
Protection of assets.
At the heart of every Intellectual Property Agreement is the intent to protect valuable assets. Whether it’s a groundbreaking software, a novel design, or a unique brand logo, these creations are the result of hard work and ingenuity. By using a template, you ensure that these assets are shielded from unauthorized use or claims.
Clarity in Ownership
Disputes over intellectual property can be costly and time-consuming. An Intellectual Property Agreement template provides a clear framework that delineates who owns what, reducing the potential for misunderstandings or conflicts in the future.
Flexibility and Customization
While a template provides a solid foundation, it also offers flexibility. Depending on the specific needs of the parties involved, certain sections can be modified or expanded upon to cater to unique situations or requirements.
Cost-Effective
Hiring legal professionals to draft an agreement from scratch can be expensive. Using a template as a starting point can significantly reduce these costs. However, it’s still advisable to have the final agreement reviewed by a legal expert to ensure its validity and comprehensiveness.
Time-Saving
In the fast-paced world of business, time is of the essence. Instead of starting from square one, an Intellectual Property Agreement template provides a ready-to-use format that only requires filling in specific details. This speeds up the process, allowing parties to quickly move forward with their ventures.
Ensures Compliance
A well-drafted template is designed to be in line with prevailing laws and regulations. This ensures that the agreement is not only legally sound but also compliant with current standards and practices.
How to Write an Intellectual Property Agreement: A Step-by-Step Walkthrough
Creating an Intellectual Property Agreement doesn’t have to be a daunting task. With the right guidance and a comprehensive template, you can draft an agreement that safeguards your intellectual assets. Here’s a step-by-step guide to help you navigate through the Intellectual Property Agreement template provided.
1. Identification of Parties
Start by clearly identifying the parties involved in the agreement. This includes the “Employee” and the “Employer,” along with their respective addresses. This section sets the stage for the entire agreement.
2. Transfer of Intellectual Property
Here, you’ll define the transfer of all existing and future rights, titles, and interests in any intellectual property created during employment. Be specific about what types of intellectual property are included, such as trademarks, patents, copyrights, etc.
3. Recognition of Pre-existing Property
This section is crucial for protecting the employee’s intellectual property that predates the employment. List the prior creations explicitly to avoid any future disputes.
4. Support in Securing Rights
Outline the employee’s responsibility to assist the employer in obtaining patents, copyrights, and other protections. This ensures that the intellectual property is legally safeguarded.
5. Term of Agreement
Specify the start and end dates of the agreement. Make clear any rights the employer retains after the agreement’s termination.
6. Handover of Materials
Detail the process for returning all tangible representations of the intellectual property upon termination. This includes drawings, documents, data, etc.
7. Non-transferability
Emphasize that neither party can transfer or delegate their responsibilities under this agreement to an external entity. This maintains the integrity of the agreement.
8. Jurisdiction and Law
State the legal framework under which the agreement operates. This typically refers to the laws of a specific state or country.
9. Clause Integrity
Include a provision that if any part of the agreement is declared void, the rest of the agreement remains intact. This ensures the agreement’s resilience.
10. Comprehensive Understanding
Affirm that this document embodies the entire consensus between the parties, superseding all previous negotiations or agreements.
11. Binding Nature
Clarify that the agreement imposes obligations on the successors and heirs of both parties, ensuring its continuity.
12. Amendatory Procedure
Describe the process for making changes to the agreement, emphasizing that alterations must be in writing and endorsed by both parties.
13. Affirmation through Signature
Conclude with a space for both parties to sign and date the agreement, validating their acceptance of the terms.
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Intellectual Property Agreement Template
Below you can see a sample of the Intellectual Property Agreement template:
Intellectual Property Agreement FAQs
What is the primary purpose of an intellectual property agreement.
The main objective of an Intellectual Property Agreement is to clearly define the ownership, transfer, and rights associated with intellectual property created or identified during an employment tenure or collaboration. It ensures that intellectual assets are protected and reduces the potential for disputes.
Who should use an Intellectual Property Agreement?
Any individual or organization that creates, uses, or has rights to intellectual property should consider using this agreement. This includes employers and employees, inventors, writers, designers, and any other creators or collaborators.
Can I modify the Intellectual Property Agreement template to suit my needs?
Absolutely! The template provided by easylegaldocs.com is designed to be flexible. You can customize it to cater to your specific requirements.
How is pre-existing intellectual property handled in the agreement?
The agreement contains a section titled "Recognition of Pre-existing Property" where intellectual property that predates the employment or collaboration is listed. This ensures that such property remains the exclusive right of its original owner.
What happens if a clause in the agreement is declared void or illegal?
The "Clause Integrity" section ensures that if any provision of the agreement is declared void by a competent authority, the rest of the agreement remains intact and valid.
How long is the Intellectual Property Agreement valid for?
The "Term of Agreement" section specifies the start and end dates of the agreement. However, certain rights, especially those related to intellectual property ownership, may continue beyond the termination date.
What should I do if I want to make changes to the agreement after both parties have signed it?
The "Amendatory Procedure" section outlines the process for making changes. Typically, any alterations require written documentation and mutual endorsement by both parties.
What if I have intellectual property from before my employment that isn't listed in the agreement?
It's crucial to list all pre-existing intellectual property in the "Recognition of Pre-existing Property" section when drafting the agreement. If something is omitted, it's advisable to amend the agreement to include it, ensuring its protection.
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Intellectual Property Rights Transfer Agreement
Jump to section, what is an intellectual property rights transfer agreement.
An intellectual property rights transfer agreement is a contract that transfers the intellectual property rights of a licensor to a licensee. In other words, this type of agreement relinquishes a licensor's rights to their intellectual property to a third party. Sometimes, the agreement can be exclusive, which means only licensee is authorized to use the transferred property. Non-exclusive agreements permit multiple licensees to do the same.
The purpose of an intellectual property rights transfer agreement is to permanently give a licensee the right to use licensed assets in a way that is directly authorized per the commitment's terms and conditions.
What's Included in an Intellectual Property Rights Transfer Agreement?
A typical IP transfer agreement should include the following elements:
- Definition of Intellectual Property : A clear definition of the IP being transferred, including trademarks, patents, copyrights, trade secrets, and any other relevant IP rights.
- Description of the Transfer : A detailed description of the IP rights being transferred, including the scope of the transfer and any limitations or restrictions on the use of the IP.
- Consideration : The agreement should specify the consideration (payment) for the transfer of the IP rights, including the amount and any payment schedules.
- Representations and Warranties : Both parties should make representations and warranties regarding the IP, including the fact that it is original and has not been previously transferred or licensed.
- Confidentiality : The agreement should include provisions for maintaining the confidentiality of the IP and any related information.
- Termination : The agreement should outline the circumstances under which the transfer can be terminated, and the consequences of termination.
- Indemnification : The agreement should include provisions for indemnifying the recipient against any claims or damages arising from the use of the IP.
- Dispute Resolution : The agreement should specify the process for resolving disputes that may arise between the parties.
- Governing Law : The agreement should specify the governing law that will be used to interpret and enforce the terms of the agreement.
- Signatures : The agreement should be signed by both parties to indicate their agreement to the terms and conditions outlined in the document.
It is important to note that the specific provisions of an IP transfer agreement will vary depending on the jurisdiction and the type of IP being transferred. It is always recommended to seek the advice of a qualified attorney to ensure that the agreement meets the legal requirements and protects the interests of all parties involved.
Intellectual Property Rights Transfer Agreement Sample
INTELLECTUAL PROPERTY RIGHTS TRANSFER AGREEMENT
THIS AGREEMENT made on [DATE], between [TRANSFEROR NAME], with a mailing address of [TRANSFEROR ADDRESS] (hereinafter referred to as "Transferor"), and [TRANSFEREE NAME], with a mailing address of [TRANSFEREE ADDRESS] (hereinafter referred to as "Transferee").
WITNESSETH:
WHEREAS, the Transferor is the owner of certain intellectual property rights, including [DESCRIPTION OF IP RIGHTS], and desires to transfer such rights to the Transferee; and
WHEREAS, the Transferee desires to acquire such rights from the Transferor;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
- Definition of Intellectual Property. For purposes of this Agreement, "Intellectual Property" shall mean [DESCRIPTION OF IP RIGHTS].
- Description of the Transfer. The Transferor hereby transfers and assigns to the Transferee all of the Transferor's right, title, and interest in and to the Intellectual Property, including all patents, trademarks , copyrights , trade secrets, and any other proprietary rights.
- Consideration. The Transferee shall pay to the Transferor the sum of [AMOUNT] as consideration for the transfer of the Intellectual Property. [OPTIONAL: The consideration shall be paid in [NUMBER] equal installments, with the first installment due on [DATE].]
- Representations and Warranties . The Transferor represents and warrants to the Transferee that: (a) the Intellectual Property is original and has not been previously transferred or licensed; (b) the Transferor is the sole owner of the Intellectual Property and has the right to transfer the same; and (c) the Intellectual Property is free and clear of all liens , claims, and encumbrances.
- Confidentiality. The Transferee shall maintain the confidentiality of the Intellectual Property and shall not disclose the same to any third party without the prior written consent of the Transferor.
- Termination. This Agreement may be terminated by either party upon written notice to the other party in the event of a material breach of any of the terms and conditions of this Agreement. Upon termination, the Transferee shall immediately return the Intellectual Property to the Transferor and shall cease all use of the same.
- Indemnification. The Transferee shall indemnify and hold harmless the Transferor from and against any and all claims, damages, or expenses arising from the use of the Intellectual Property.
- Dispute Resolution. Any disputes arising out of or relating to this Agreement shall be resolved through arbitration in accordance with the rules of the American Arbitration Association.
- Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE].
- Entire Agreement . This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties.
- Amendment. This Agreement may be amended only by written instrument executed by both parties.
- Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first above written.
[TRANSFEROR NAME]
[TRANSFEROR SIGNATURE]
[TRANSFEREE NAME]
[TRANSFEREE SIGNATURE]
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Transfer of Intellectual Property: Everything You Need to Know
The transfer of intellectual property can seem like a difficult process due to the intangible nature of the property. 3 min read updated on January 01, 2024
The transfer of intellectual property can seem like a difficult process due to the intangible nature of the property. One of the most important things to remember when transferring IP is that you cannot transfer what you do not technically own.
By creating a license or assignment , you are essentially promising to transfer your ownership rights of the intellectual property. These agreements can often be necessary due to the fact that employees may believe that they own the rights to the intellectual property they create, while the employer may feel they own it as part of the employee's scope of work.
The rules regarding employee ownership of intellectual property can vary by the type of property that is being protected. In general, the employer will own all
- Trade secrets
This ownership extends to work that was specifically created during the course and under the scope of the worker's employment. Since the rights of ownership typically have to do with the employee/employer relationship, the general rules do not necessarily apply to independent contractors that work for the company. The rules and laws of intellectual property and ownership can be complex, so if you are trying to obtain rights for work by an independent contractor, it is best to contact a lawyer before attempting to transfer the intellectual property yourself.
Intellectual property copyrights are extremely important in the growing global economy. The rights were created to help encourage businesses to invest in both innovation and marketing, which are the foundations of capitalism. Intellectual property is so important that it is often traded and used to secure investors and financing.
What Is the Assignment of Intellectual Property Rights?
An assignment to intellectual property rights refers to the act of transferring ownership from the assignor to the assignee. The document that creates this transfer is often referred to as the "assignment."
The two parties entering into the assignment can either be legal entities or individuals. The assignment will include language in which the assignor will transfer over their intellectual property rights such as:
- Industrial Designs
The rights can be full rights or can have limitations to what the assignee is allowed to do or gain from the intellectual property. When intellectual property is transferred, it is most often done for one lump sum of royalties.
When creating an assignment, it is essential to include all of the rights on a country-by-country basis to make sure that each of the country's national assignment requirements are met. Most intellectual property can be freely transferred by an assignor.
In some cases, you can also execute a nunc pro tunc which will assign the rights over to the other party with an earlier date than the assignment was executed. The date will need to be specified in the agreement.
What Does a Valid Assignment of Intellectual Property Rights Require?
The laws for transferring intellectual property will vary from country to country and be subject to a wide range of rules depending on the national, regional, or international authorities where it is recorded. Since country regulations can vary as well as the type of intellectual property being assigned, it is virtually impossible to have a single set of regulations. The best thing to do is seek out a national representative where you are performing the transfer to ensure that you are complying with all necessary rights.
What Are Typical Form Requirements for Assignments?
While it is hard to find a one-size-fits-all agreement, there are some basic rules and requirements that should be followed when creating an intellectual property agreement. You should always:
- Put the assignment in writing
- Require both the signature of the assignor and assignee or authorized signer for either party
- Have it signed in ink
- Keep the originals stored in a safe place
- Get it notarized if the county requires it
- Use a specific form if the county dictates
Why Are Assignments Important?
The proper assignment of intellectual property is important to ensure the timely recording and transfer of rights. It is also essential for claiming priority rights. As soon as an assignment has been recorded the assignee may begin exercising their recently obtained rights.
If you need help with the transfer of intellectual property, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
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How to transfer intellectual property rights.
Intellectual property has to be transferred by a legal process – an assignment—if you want to dispose of it to someone else. And by law you need a written document, with the owner’s signature on it, to do this.
Often, assigning your rights won’t be the best way to exploit your assets – a licence deal with someone who will work your IP and pay you a royalty for doing so could be a better arrangement. And if you are giving ownership rights to someone else, beware that a joint owner might be able to do things with the IP that do not require your agreement – so, if you must give away a share of your IP, make sure you get sound legal advice from a intellectual property lawyer first.
What intellectual property rights can be transferred?
Patents, trade marks, copyright, registered designs and the various flavours of unregistered design rights can all be assigned, and so can applications for them. But at the fringes of the intellectual property world are some similar-looking rights that may need special treatment:
- Confidential information is generally considered not to be a form of property, so in practice it is transferred not by an assignment but by delivering the information in whatever form it is kept (by oral disclosure, if it is not recorded in permanent form) and undertaking to the recipient that you will not use it yourself, or tell anyone else about it.
- Unregistered trade marks are protected by the common-law action for passing off, but that does not make them property. The property protected by passing off is actually business goodwill, and that can be transferred by executing an assignment.
- Domain names are frequently lumped together with intellectual property these days, and given that they are often based on the same words as trade marks there is sense in this. But a domain name is not a piece of intellectual property: it exists as a result of the contract you have with the registrar, not under any statute. You can submit a transfer request in the required form to the registrar, which has the same effect as an assignment.
- Moral rights are part of the copyright world, and being deliberately designed to benefit creators regardless of who owns the other rights in their work they are expressly non-assignable. They can however be waived, which achieves much the same effect as an assignment – and they can be inherited, so the author’s heirs can enforce them.
- The rules about transferring copyright in other countries – in particular, those that subscribe to the “authors’ rights” approach often make copyright inalienable, as is the case for example in Germany, so take care if there are valuable foreign copyrights involved (and remember that because copyright arises automatically there are usually going to be foreign rights to consider, though they may not be worth enough to worry about much).
What is the process for transferring intellectual property rights?
The statutes that govern the different types of intellectual property tell you what is required to transfer them to someone else: in general, you have to sign a written assignment. Only the person making the transfer needs to sign – they are the ones giving something away: the recipient does not have to sign, though frequently will do.
These days, it is common to use electronic signatures, and provided the parties to a document agree to sign electronically, and e-sign the document intending to be bound by it, this is usually enough. However, while the law is coming to accept electronic execution of documents, it is not yet settled so care needs to be taken. And if the assignment is by deed (which is common where foreign rights, especially copyright, are included) it is more likely that “wet-ink” signature will be needed.
The requirement for writing and a signature is all about creating certainty. That is not to say that an oral assignment is not (as the saying goes) worth the paper it’s written on: it cannot be effective in law, but it can work in equity. In effect, the courts will say that if you tell someone that they can have your patent, you have not actually transferred it but you cannot argue that the other person has no interest in it. You have given them beneficial ownership of the patent, just like if you had declared a trust over a piece of land you owned in favour of someone else.
If you would like help drafting an intellectual property transfer agreement our team of IP solicitors can help. A well drafted intellectual property transfer agreement is relatively inexpensive and can reduce the likelihood of disputes with the buyer.
What problems might arise?
Very often, people make agreements under which intellectual property is created but don’t deal with who owns the IP. When you commission someone to write a piece of software or take a photograph or write some copy, you don’t automatically get the copyright – however much you pay for the work. That remains with the creator until it is assigned in writing. This sort of problem accounts for a lot of cases before the courts.
If you ask a judge to sort it out for you (which is invariably much more expensive than paying a lawyer to write the document for you in the first place) they will rarely interfere with the ownership of the copyright, and you will have to be content with a licence to use the software, photo, copy or whatever in the manner that the judge finds the parties contemplated when the commission was made. Not always a happy situation, when you think you have paid handsomely for the work to be done. But sometimes the judge will decide that the IP has to belong to the commissioner – perhaps because the commissioner needs to be able to enforce the rights against the person they commissioned as well as against third parties. And if the facts show that the creator had agreed to transfer the IP, but hasn’t done so, the judge will usually order them to perform their side of the bargain. We see many cases where ownership of IP is in dispute, and would be happy to advise you on what you might expect the court to order.
Key clauses that an intellectual property transfer agreement should include
The law does not stipulate what must go into an assignment. The only mandatory provision is a clause making it clear that rights are passing from the assignor to the assignee. The details are up to you, and should cover the payments to be made and any right to have what you have assigned revert to you in the future.
There are also a number of clauses that a well-drafted assignment needs to contain to make it work smoothly:
- Warranties, to the effect that the transferor owns the rights (and that there are no encumbrances – they have not created a charge to secure their bank overdraft, for example), that no-one has infringed their rights (or, in diluted form, that they are not aware of any infringements), and that the rights being transferred are valid and subsisting and all renewal fees have been paid (although warranting the validity of any IP right is dangerous, and should not be done without very careful thought and legal advice).
- Further assurance – an obligation on the transferor to take steps that might be needed to make the transfer fully effective, which in the case of registered rights may mean confirming to the Intellectual Property Office that the transfer has been made.
- Power of attorney – it is common to find language that appoints the assignee as attorney for the assignor, so that they can execute any necessary documents without having to track down the assignor again and get them to sign papers. However, as powers of attorney have to be by deed and most assignments are not deeds, these clauses are often unenforceable, so take care to ensure that if there is a power of attorney the assignment document is a deed.
- Waiver of moral rights, which must be in writing. There are many exceptions to moral rights protection, making them weak and often useless for the creators for whose benefit they were intended, but any assignment that includes copyright must deal with moral rights too, just in case.
- Accrued rights of action. Just because the IP has been transferred does not mean that the new owner can sue for infringements that took place earlier. If the new owner wants to be able to deal with prior infringements (and this is usually preferable to relying on the old owner doing anything), the assignment must transfer the rights to take action.
How we document the transfer of intellectual property rights
IP rights are often transferred along with a collection of other business assets, and the transaction is recorded in a single very large agreement. Transfers can also be contained in commissioning agreements, publishing agreements, recording contracts, and a host of other arrangements. In some situations – for example, where IP rights have not been identified precisely enough in the wider agreement, or where the agreement creates a commitment to transfer the IP, perhaps when some later event occurs - a stand-alone assignment might be used.
In some situations, your intellectual property solicitor will recommend the creation of a confirmatory assignment. A confirmatory assignment does not transfer rights – instead it provides evidence that they have transferred. As the main agreement will contain commercially sensitive or confidential information, it can be important to be able to show the rights have transferred without having to produce the main agreement. In addition, many intellectual property offices around the world have very specific requirements about what documents they will accept. And where ownership is in dispute, a confirmatory assignment may be useful because it does not contradict the argument that the rights were in fact transferred earlier.
Which transfers of intellectual property rights should be recorded on the official registers?
Transfers of UK registered intellectual property rights – patents, trade marks, registered designs and other minor rights – should be recorded at the Intellectual Property Office. In the case of EU trade marks and designs, transfers must be recorded at the EUIPO, and transfers of European patent applications must be recorded at the EPO. Similar principles apply if there are foreign registered rights included in the assignment. Remember that there are some overseas rights that do not exist here, like utility models and (in some countries, notably the USA) registered copyright.
Intellectual property rights are generally easy to transfer although there are some suggested precautions you should take to ensure a transaction goes smoothly. It is best practice to have a transfer of ownership agreement drafted by an Intellectual Property solicitor . This will help you avoid legal disputes that are likely to cost significantly more than the cost of a transfer agreement. You should ensure that you notify the IPO and EUIPO of a transfer of a registered property right (trade mark, patent or registered design), we can help guide you through this process for a small fee. Contact us using the form below for more information or ask for a no-obligation quote.
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Transfer of intellectual property rights agreement | legal guide, transfer of intellectual property rights agreement: 10 legal questions answered, the importance of transfer of intellectual property rights agreement.
As legal professional, Transfer of Intellectual Property Rights Agreement topic both fascinating crucial today`s fast-paced innovation-driven world. The ability to protect and transfer intellectual property rights is essential for businesses to thrive and for individuals to be fairly compensated for their creations.
One key aspects Transfer of Intellectual Property Rights Agreement understanding different types intellectual property, patents, trademarks, copyrights, trade secrets. Each type of intellectual property has its own set of rules and regulations, making it essential to have a thorough understanding of the specific requirements for transferring rights.
Case Studies
Let`s look case study illustrate importance well-drafted Transfer of Intellectual Property Rights Agreement. In 2018, a small software development company entered into a partnership with a larger corporation to develop a new technology. However, when it came time to transfer the intellectual property rights, the two parties realized that their initial agreement was vague and did not clearly outline the rights and responsibilities of each party. This led to a lengthy and costly legal battle that could have been avoided with a properly drafted agreement.
Statistics on Intellectual Property Transfers
These statistics highlight the increasing importance of intellectual property transfers in today`s business landscape. As technology continues advance new innovations constantly developed, need clear comprehensive Transfer of Intellectual Property Rights Agreements vital ever.
Transfer of Intellectual Property Rights Agreement incredibly important topic requires careful attention detail deep understanding intellectual property laws. It is essential for businesses and individuals to seek the guidance of legal professionals to ensure that their rights are protected and that any transfers are conducted in a fair and lawful manner.
Transfer of Intellectual Property Rights Agreement
This Transfer of Intellectual Property Rights Agreement (“Agreement”) entered _____ day ______, 20__, _______________ (“Transferor”) ________________ (“Transferee”).
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Technology Transfer
Technology transfer is the process by which technology is transferred from federal labs, universities, or other research institutions to industry where it can be developed into a commercial product or service.
The U.S. government funds over $100 billion in research and development activity annually, which leads to a continuous pipeline of new inventions and technologies. Technology transfer enables the commercialization of many of these technologies by industry partners who may further develop, scale up, and commercially deploy them.
Beginning with the Stevenson-Wydler Technology Innovation Act of 1980, Congress enacted a series of laws to promote and incentivize technology transfer. These laws encourage the private sector to commercialize federally funded technology through technology transfer mechanisms such as Cooperative Research and Development Agreements (CRADAs), start-up companies, patent license agreements, educational partnership agreements, and state/local government partnerships.
Stevenson-Wydler Technology Innovation Act of 1980
The Stevenson-Wydler Technology Innovation Act of 1980 (Pub. L. 96–480) (94 Stat. 2311) was the first major U.S. technology transfer law. It requires federal laboratories to actively participate in and budget for technology transfer activities and for each federal lab to establish an Office of Research and Technology Applications in order to coordinate and promote technology transfer.
The Bayh Dole Act
The Bayh-Dole Act or Patent and Trademark Law Amendments Act (“Bayh-Dole”) (Pub. L. 96-517), 35 U.S.C. § 200–212, was passed in 1980 to incentivize and accelerate the commercial exploitation of federally funded research results. It allows institutions and grant recipients, such as universities, to hold the title to patents on inventions stemming from government funded research and to license the rights to those inventions to industry partners. This can generate valuable royalties for the research institution if the technology is successfully commercialized.
Bayh-Dole led to the remarkable growth of patenting and licensing activity by U.S. universities. Bayh-Dole has also spurred significant growth in the number of start-up companies formed to develop and commercialize these federally funded technologies, pursuant to licenses from universities.
Federal Technology Transfer Act (FTTA) of 1986
The Federal Technology Transfer Act (Pub. L. 99-502), 15 U.S.C 3710, was enacted by Congress in 1986 and amends the Stevenson-Wydler Act of 1980. The FTTA improves industry access to technologies from federal laboratories. The act established the Federal Laboratory Consortium for Technology Transfer, a nationwide network of over 300 federal laboratories, agencies, and research centers that promote the commercialization of technologies from the federal labs. The FTTA also enabled federal laboratories to negotiate licenses for patented inventions made at the laboratory and to enter into Cooperative Research and Development Agreements (CRADAs). CRADAs are formal written agreements between one or more federal laboratories and one or more non-federal parties under which the government, through its laboratories, provides personnel, services, facilities, equipment, intellectual property, or other resources. Under the FTTA, no funds, however, may be provided by the federal laboratories to the non-federal parties.
National Technology Transfer and Advancement Act of 1995
The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113)(110 Stat. 775) amended the Stevenson-Wydler Act to make CRADAs more attractive to both federal laboratories and private industry. The law provides assurances to U.S. companies that they will be granted sufficient intellectual property rights to justify prompt commercialization of inventions arising from a CRADA. The Act promoted the development of new technology standards by requiring that all federal agencies use cooperatively developed standards, particularly those developed by standards developing organizations.
The USPTO facilitates the voluntary licensing and commercialization of innovations in a variety of key technologies from many public sources through its Patents 4 Partnerships platform, a searchable repository of patents and published patent applications that are available for licensing. Additionally, the USPTO supports a number of federal agencies, U.S. universities, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, and the Federal Laboratory Consortium for Technology Transfer in their technology transfer efforts to commercialize federally funded inventions.
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INTELLECTUAL PROPERTY
TRIPS — Trade-Related Aspects of Intellectual Property Rights
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is the most comprehensive multilateral agreement on intellectual property (IP). It plays a central role in facilitating trade in knowledge and creativity, in resolving trade disputes over IP, and in assuring WTO members the latitude to achieve their domestic policy objectives. It frames the IP system in terms of innovation, technology transfer and public welfare. The Agreement is a legal recognition of the significance of links between IP and trade and the need for a balanced IP system.
TRIPS and COVID-19
- COVID-19: Measures regarding trade-related intellectual property rights
- An integrated health, trade and IP approach to respond to the COVID-19 pandemic
- Information Note: The TRIPS Agreement and COVID-19
- Information Note: How WTO members have used trade measures to expedite access to COVID-19 critical medical goods and services
- Information Note: Developing and delivering COVID-19 vaccines around the world
WHO-WIPO-WTO COVID-19 Technical Assistance Platform
WIPO-WTO Colloquium Papers
Staff working papers
Full list , understanding trips.
- What are intellectual property rights?
- Basic introduction to the TRIPS Agreement
- Guide to the TRIPS Agreement
- The economics of TRIPS
- Frequently asked questions on TRIPS
Specific topics
- Biotechnology, biodiversity and traditional knowledge
- Climate change
- Enforcement
- Geographical indications
- Innovation policy
- Least developed countries (LDCs)
- Non-violation complaints
- Public health
- Public interest
- Technology transfer
TRIPS Council
The TRIPS Council is responsible for administering and monitoring the operation of the TRIPS Agreement. In its regular meetings , the TRIPS Council serves as a forum for discussion between members on key issues.
In its special sessions , the TRIPS Council serves as a forum for negotiations on a multilateral system of notification and registration of geographical indications (GIs) for wines and spirits.
TRIPS transparency
Transparency mechanisms help the TRIPS Council to monitor the operation of the TRIPS Agreement and promote the understanding of members intellectual property policies and legal systems. These mechanisms include WTO members' notifications, responses to checklists of questions, reviews of implementing legislation , reports on technical assistance and technology transfer, and contact points.
The Guide to Transparency under TRIPS provides further details about these mechanisms and how members can provide and access the materials.
Access notifications, responses to checklists, and reports submitted by members and observers through the e-TRIPS Gateway.
Members and observers may submit notifications, checklist responses, and reports online via the e-TRIPS Submission System (restricted access).
Trade in knowledge: Intellectual property, digital trade and knowledge flows
Since the WTO TRIPS Agreement came into force in 1995, the scale, diversity and nature of cross-border commercial transactions in knowledge, and the ways in which intellectual property is licensed and traded, have changed fundamentally. A new portal provides material aimed at helping policymakers and others keep abreast of current developments in trade in knowledge, understand the changing patterns of knowledge flows across borders, and consider the legal, economic and policy dimensions of these developments.
Technical assistance
The main objective of the WTO's technical assistance activities is to help members and observers implement an intellectual property regime that meets their developmental and other domestic policy objectives. The activities take a holistic approach, recognizing that policy choices within the TRIPS framework are integral to a broader policy context.
Cooperation with other intergovernmental organizations
The WTO Secretariat cooperates with WIPO , WHO , and many other intergovernmental and regional organizations on matters of common interest. This cooperation includes participating as an observer in other organizations� meetings, collaborating on technical assistance, and consulting on other topics upon request.
- Briefing Note
- e-TRIPS Gateway : a global resource on intellectual property law and policy
- e-TRIPS Submission System : a portal for members to provide notifications, review materials, and reports
Legal and interpretive texts
- TRIPS Agreement (as amended on 23 January 2017)
- TRIPS Agreement (unamended)
Special sessions of the TRIPS Council
Recent publications on intellectual property.
A Handbook on the WTO TRIPS Agreement : Second edition
Order printed copy
Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade (second edition)
More publications on intellectual property
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Contracts, Transfers of Rights and Licenses
Intellectual property seeks to protect literary, artistic and scientific works. Such as books, pamphlets, musical compositions, dramatic and drama-musical works, choreographies, plays, films, plastic works, computer programs, etc.
Industrial property, on the other hand, is made up of a set of rights that a natural or legal person may possess over an invention, an industrial design, a distinctive sign, etc. Industrial property rights include, for example, trademarks, patents or industrial designs and drawings.
The licensing of these rights can often be a vital component of the business strategy of their holders. Intellectual and industrial property rights are playing an important role in the economy. The assignment of these rights is the most common way for their holders to make their rights economically profitable.
A contract for the transfer of intellectual property rights consists on an agreement between a rights holder (licensor) and a third party (licensee). By means of this agreement, the holder of intellectual property rights assigns to the licensee the use of a series of economic rights over its creation, either through the setting of a price or free of charge.
Through the contract for the transfer of industrial property rights, the owner or holder of an industrial property right (assignor) assigns or transfers to a third party (assignee) the ownership of such rights in exchange for a price or free of charge.
In practice, these assignments can be developed through a multitude of types of contract depending on the nature and peculiarity of each case.
At Letslaw, we offer a service of drawing up and negotiating contracts for the transfer of rights and licenses adapted to the needs of each client.
In order to meet our clients’ requirements, we focus on identifying all rights holders, as well as the characteristics of their assets and the estimation of their economic value. In this way, we establish the appropriate legal business to obtain the greatest benefit with the best guarantees.
Among our main services , you will find:
- Drafting and/or reviewing license agreements for the use of intellectual property rights.
- Drafting and/or reviewing contracts for the assignment of rights to trademarks, patents and other industrial property rights.
- Assignment of image rights.
- Contractual negotiations.
- Legal advice on breach of contract.
- Negotiations and out-of-court settlements.
- Legal representation before courts or arbitration bodies.
- Creative Commons licenses.
- Unfair competition and piracy.
- Legal advice on issues related to the transfer of rights.
- Development of strategie s for the protection of intangibles.
- Our team of professionals consists of a group of lawyers specialized in intellectual and industrial property who have extensive experience in matters related to the protection and defense of intangibles.
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India: Drafting Intellectual Property Rights Transfer Agreements - Part II
In the first part of this series on intellectual property (" IP ") transfers available here , we discussed the legal provisions governing assignment and license of IP. In this second part, we will discuss the various transfer related clauses in IP assignment and license agreements and the manner in which these clauses must be drafted.
As discussed in the first paper of this series, IP can either be assigned or licensed by the owner, allowing the commercial use of the asset in various forms. Apart from this, various other commercial arrangements also lead to the creation of IP. For instance, IP can be created under an employment agreement, a collaboration among multiple persons, a commissioning agreement or a consulting agreement. These are just a few examples. In all the above circumstances, it is important to have an effective contract that clearly establishes the rights held by the parties concerned. In this paper we cover two issues. First, we will look at certain crucial clauses that are an integral part of IP transfer agreements, and broadly discuss the structure and framing of these clauses. Second, we will look at some specific types of agreements dealing with IP creation and transfer, and also cover some of the key commercial and legal aspects of these agreements.
Generally, in agreements concerning the use and/or transfer of IP, the following clauses are important:
1. Assignment:
In any IP assignment, there is a clause specifically assigning/transferring the title in the IP from the assignor to the assignee. This clause must clearly state the extent of the rights that are being granted to the assignee. Assignments must contain express language such as "hereby assigns", which indicates that the assignor is assigning rights in an existing or a future work in the present. 1
Example: "Rights granted– X hereby grants, conveys and assigns to Y all the rights in the [Work], including without limitation the following exclusive rights throughout the Territory (as defined in clause ["]) for the Term (as defined in clause ["]) –
- insert a list of all rights in relation to the [Work] that are being assigned -"
Points to remember:
1.1. Work/invention/mark/property: It is advisable for the agreement to have a specific definition for the work or the invention or other IP that is being assigned. In this way, the assignment clause can be short and precise without having to define the work/invention that is being assigned.
1.2. Indicative list of rights: The assignment clause must contain an indicative list of rights, i.e., a list of ways in which the assignee may use the work/invention. These words are normally borrowed from the statute but drafted in a manner that is consistent with the intent of the parties. For instance, in the case of a cinematograph film, one of the rights assigned would be the right to make, sell, distribute copies of the film and communicate the film to the public.
2. License:
In an agreement where IP is licensed, there is no transfer of title. Therefore, the agreement must contain a clause demarcating the specific rights of use granted to the licensee. It is advisable to use clear terms such as "hereby grants a license".
Example: "Grant of License– The Licensor hereby grants to the Licensee a non-exclusive, non-transferable, non-sub-licensable, non-delegable and conditional license to use in the manner agreed hereinbelow, the Trademark, solely in relation to the business operations of the Licensee, within the Territory and for the Term:
- insert a list of all rights in relation to the trademark that are being licensed -"
2.1. Intellectual Property: The IP, whether it is a work/invention or trademark, that is being licensed must be specifically defined in a separate clause. As stated in 1.1 above, it makes for easier and cleaner drafting of the license clause.
2.2. Exclusive/non-exclusive: This is the most important part of the license grant which must clearly indicate whether the license is exclusive or non-exclusive.
2.3. Sublicense/further transfers: If the intention of the parties is that the license remains with the licensee alone, the clause must specify that the licensee does not have the authority to sub-license or further transfer the rights granted under the license.
2.4. Indicative list of rights: Given that a license can be far more limited than an assignment in its scope, it is advisable to include a list of specific uses that are permissible under the license. Further, the licensor may also clarify that the licensee is not permitted to do anything other than what is stated in the license.
2.5. The ownership of any IP must be mentioned, and the licensor must have the right to immediately know when there is a possibility that the IP may have been infringed by a third-party.
3. Term and termination:
The assignment or license agreement must contain separate clauses defining the term and instances when the agreement can be terminated.
a. "The rights assigned herein shall be irrevocable and shall be vested in the assignee for perpetuity including without limitation, for the full term of copyright protection everywhere in the world and any and all renewals, extensions and revivals thereof."
b. "This License shall come into effect on the Effective Date and shall remain valid and binding on the Parties until such time that it is terminated in accordance with clause ["] of this Agreement."
c. "This License shall come into effect on the Effective Date and shall remain valid for a period of 5 (five) years from the effective date unless it is terminated in accordance with clause ["] of this Agreement."
Termination:
"This Agreement may be terminated: a) by mutual agreement of the Parties; or b) on a material breach of any provision of this Agreement by the other Party, provided however that in case of a breach capable of remedy, only if the breach is not remedied by the other Party within the Notice Period. Upon termination: a) either Party shall forthwith hand over to the other Party all documents, material and any other property belonging to the other Party that may be in the possession of the Party or any of its employees or agents; b) each Party shall immediately pay all pending fees or other amounts due to the other Party under this Agreement."
3.1. Term: The term of the assignment or license can be anything that the parties choose. However, the outer limit of the grant is determined by the term specified in the statute for the IP. For instance, the term of a patent is 25 (twenty- five) years from the date of the application beyond which period the invention enters the public domain.
3.2. Termination: This clause must be drafted with care and caution bearing in mind the agreement between the parties. Further, if the agreement involves promises that can only be performed by a specific individual, termination by such party must not be permitted. In any event, if the assignment is irrevocable in nature, termination must not be permitted unless there is a material breach and terminating party must be required to serve adequate notice. Once the agreement is terminated, the IP will revert to the assignor or the licensor, as the case may be. Any IP that still remains with the transferee must be returned to the transferor or destroyed (when appropriate) upon termination.
4. Territory:
The territory for which the IP is assigned is crucial to be specified in the agreement. The same IP can be assigned or licensed to two or more separate entities for use and exploitation in different territories. If this is not clearly specified in the agreement, the territory might be deemed to be India as a whole. This would render any subsequent assignment or license impossible to carry out.
Example: "The assignment/license granted herein shall be exercisable within the territory of India ("Territory")."
5. Consideration:
The agreement must contain a clause on consideration or fees/payment to be made for transfer of the IP. This clause must define the manner in which payments will be made by the assignee or licensee. There are several ways in which payment terms can be structured; some of the most common modes are discussed below:
5.1. Lumpsum payments: IP rights can be granted in exchange for a lumpsum payment where the grantee can pay a specific sum of money in the manner prescribed under the agreement. This amount can be paid either as a single payment or in instalments.
a. "In consideration of Licensor granting a license to use the Intellectual Property in terms of this Agreement, the Licensee shall pay a monthly fee of Rs. ["] (["]) to the Licensor ("License Fee").
The Licensee shall pay the License Fee to the Licensor by way of wire transfer, no later than [7 (seven) days] prior to the commencement of each month."
b. "As consideration for all the rights granted and assigned in the Intellectual Property by the Assignor, the Assignee agrees to pay a sum of Rs. ["] (["]) to the Assignor in the following manner:
i. Rs. ["] (["]) via -insert mode of payment- on the Execution Date;
ii. The remaining sum of Rs. ["] (["]) via -insert mode of payment- no later than -insert date- "
5.1.1. In the event the parties agree on payment in instalments, the agreement must clearly specify the schedule.
5.1.2. The mode of payments which are acceptable to both parties must be specified.
5.1.3. The agreement must also provide for consequences of delay in payment, if any.
5.1.4. The payments clause must specify the taxes, if any, that are deductible.
5.2. Royalty: In consideration for the rights granted, the assignor or licensor may also require that royalty be paid. Typically, royalty payments will be a portion of the sales revenue earned by the use/exploitation of the IP rights granted.
a. "In consideration of the rights granted in clause ["], the Licensee shall pay to Licensor a royalty (the "Royalty") equal to ["]% of Net Sales occurring during the Royalty Term. The royalty under this clause shall be payable no later than 5 (five) business days after the last day of every quarter."
b. "Royalty will accrue upon distribution of any copy of [software] delivered or sold in the manner specified in clause ["]. Rs. ["]/["]% of the sale price of any copy of [software] shall be payable as royalty on each copy sold. All accrued Royalty shall be paid to the Licensor within ["] days after the end of each fiscal quarter, which ends on the last day of each of March, June, September and December. Payments shall be accompanied by a report stating the number of units of [software] sold/distributed in the relevant quarter, and the calculation of the royalty payment.
5.2.1. While royalty is typically represented as a percentage portion of the net sales revenue, it can be structured in any manner as the parties deem fit.
5.2.2. Royalty must be payable for the royalty term, which can either be for the whole term of the agreement or only a part of the term.
5.2.3. The schedule for payment must be specific and must always be accompanied by proper accounts for the relevant period showing the manner in which royalty payments have been calculated.
5.2.4. The agreement must also provide for consequences of delay in payment, if any.
5.2.5. The payments clause must specify the taxes, if any, that are deductible.
5.2.6. The method and frequency of invoicing must also be included.
6. Representations, warranties and covenants:
Apart from the representations and warranties that are usually included in agreements, including in relation to capacity and execution, there are certain specific warranties that should be included in IP related agreements.
6.1. The person granting the rights must represent that he has the sole and absolute ownership of the IP and is therefore entitled to grant rights either by way of assignment or license.
6.2. The person granting the rights must also represent that the IP in which the rights are being granted does not infringe any third party's IP rights.
7. Indemnity
The person granting the rights must ordinarily indemnify the other party from any legal proceedings or costs arising as a result of defective title in the IP or any third-party claims of infringement. The person granting the rights, especially in a license, must be indemnified against all illegal and improper uses of the IP including indemnification against any legal proceedings that may arise as a result of such actions of the grantee.
8. Further assignments:
Depending on the rights being granted and the discussions between parties, the rights that are being transferred may be further assigned by the parties. Note however, there must be a clear bar on further assignment of rights and obligations especially when the promises made by the parties concerned are personal in nature.
9. Standard form clauses:
Other than the specific terms detailed above, all the standard form clauses that find their place in other agreements must also be included in IP assignments and licenses.
In this part we will discuss certain specific types of agreements and clauses in relation to copyrights, patents and trademarks.
1. Copyright:
1.1. Film-related agreements: The producer of a film is the author of a film. 2 The producer enters into several agreements including with writers, composers of music, etc. in order to create various works which will be included in the film. An effective contract between the producer and other authors such as the music composer, writer, etc. would help avoid any disputes as to the ownership of the film and the use of other content in the making of the film. The producer also enters into agreements with financiers to finance the making of the film, and with distributors and digital partners. Some aspects of these agreements have been discussed below:
1.1.1. Agreement with composer of music: It is industry practice for the producer of a film to engage the music composer to compose the music and the background score for the film. Under the Copyright Act, 1957 (" Copyright Act "), the composer is the author of the musical work. It is often the case that until the release of the film the producer retains the copyrights in all the musical works by entering into a contract of service with the music composer. 3
The producer, as the owner of the copyright in the musical works under a contract of service, can either retain all the copyrights or assign the rights to a music label. Usually, when the producer assigns the rights in the musical works to a music label, the producer, who is the owner of the film, retains the right to use the sound recording as a part of the film, and the music label would then hold the rights in the sound recordings and the underlying musical works, and can commercialize such music through sales or further licenses. The basic goal here is for the producer to leverage the rights in the music in a profitable manner.
While this is generally the industry practice, it is legally possible for a composer to retain the rights in his works. Such an agreement would encompass a limited license from the composer allowing the use of the musical works in the film by the producer.
1.1.2. Agreement with lyricist: Similar to the composer, the lyricist is also engaged by the producer to write the lyrics for various songs that are usually part of Indian films. Copyrights in lyrics, which are literary works as per the Copyright Act, will be retained by the producer or transferred by him to the music label. The lyricist is also eligible to receive unassignable royalty from the use of the lyrics.
i. To protect the interests of the producer, the agreement with the composer and lyricist must contain a clause that clearly states that all the IP in the musical and literary works will belong to the producer.
ii. In appropriate circumstances, it is also prudent to include a clause giving creative control over the final product to the producer.
iii. As discussed in Section 1.2.2 of the first paper in this series, composers and lyricists continue to retain unassignable royalty rights in the musical works.
iv. These agreements must contain a clause with specific timelines within which the composer must deliver the musical works.
1.1.3. Agreement with writers: The producer of a film usually engages more than one writer to write the story, script, screenplay, dialogues, etc. These works amount to literary works under the Copyright Act. It has been held by the Madras High Court in Thiagarajan Kumararaja v. Capital Film Works, 4 that the producer of a film has the rights to dub the film into any number of languages and this right is part of her copyright under Section 14(d) of the Copyright Act. On the other hand, it has also been held that the producer can remake the film in any number of languages only if she owns the script because remaking a film would require changes being made to the underlying script. Therefore, where a producer proposes to remake the film in various languages, apart from permission to use the script for the making of the film itself, the producer needs to entirely retain the copyrights in the script in order to be able to remake the film. 5
i. If it is the intention of the producer to make remakes or sequels of the film, it is advisable for her to ensure that she owns the script. Whether the agreement is a contract of service or otherwise, it is prudent to have an IP clause specifically stating that the producer seeks to own the script.
ii. On the other hand, if the writer owns the script, any remake can only be made with a license from the writer.
iii. The contract must specify the degree of creative control each party has over the script or story.
iv. If the producer seeks to own the script in its entirety, she must also ensure this includes the characters and other distinctive elements of the script. 6
v. This agreement must contain a clause with specific timelines within which the writers must deliver the scripts.
1.1.4. Agreements engaging principal director, actors and other individuals: Under Indian law, a director of a film does not have any copyrights in any aspect of the film. Therefore, producers in India can enter into a regular contract of service with the director. There will be certain circumstances where the director is also the scriptwriter, in which cases there can be a common agreement which includes the terms in 1.1.3 above and the contain clauses covering her directorial responsibilities. The director will be remunerated for her services.
Additionally, there are agreements that the producer enters with actors and other artists. These agreements will define the roles and responsibilities of the actor and her remuneration. The actor or other artists typically do not own any of the copyrights in the content or the character.
1.1.5. Credits clauses under 1.1.1 to 1.1.4: The parties to these agreements must also approve the manner in which each of these persons is credited in the film.
Example: "The Parties agree that the Composer shall be credited in the film as "Music by ______" by the Producer. The Composer shall have no copyrights in the sound recordings or the Musical Works in the film by way of such credits."
1.1.6. Financing agreement/film investment agreement: The producer can enter into agreements with various persons for raising funds to make a film. These agreements can be structured in many ways and might in certain cases result in transfer of ownership of IP. Some types of investment agreements are discussed below:
i. Film investment agreement: The producer and the third-party investor can agree to co-produce the film. In these cases, the parties must arrive at a revenue sharing arrangement. The co-producer will also have a share in the IP that is consequential to the extent of investment.
ii. Rights agreement: The producer can, in exchange for money, grant the financier some right in the IP. For instance, if the producer seeks an investment of Rupees Fifty Lakhs, he can grant the dubbing rights, or overseas distribution rights in exchange for the same. Such agreements work just like assignments or exclusive licenses but are a useful way in which producers can raise funds.
1.1.7. Theatrical distribution agreement: Producers must also enter into various distribution agreements with several distributors for distributing the film in theatres in various territories. Essentially, what the distributor receives under these agreements is a limited license or assignment to communicate the film to the public through theatrical distribution. The term of these agreements is limited to the period during which the film would be distributed in theatres.
Example: "In consideration of the mutual promises, payments and other terms contained herein, Producer hereby exclusively [assigns/licenses] to the Distributor the right to communicate the Film to the public only via theatrical distribution in the Territory for the Term."
1.1.8. Production of television/web-series/other shows/online content: For the production of any other content, all the agreements described in 1.1.1 to 1.1.8 will be used. However, the manner in which the IP is shared and owned may differ depending upon the facts and circumstances of each case. For example, let us say XYZ Pvt. Ltd. is producing a stand-up comedy special with a prominent comedian Mr. P. The parties can agree that the content will be written, performed and, therefore, owned by Mr. P, and where XYZ Pvt. Ltd. only takes a commission and a share of the revenue.
1.2. Album production:
1.2.1. Agreements with music composers and lyricists: These agreements are similar to the agreements described in 1.1.1 and 1.1.2 above. The producer of the sound recording may engage composers and lyricists and seek to retain the copyrights in the underlying works along with the sound recording he produces and owns.
1.2.2. Agreement with the singers/other artists: The singers and other artists are usually engaged under a contract of service to sing in a studio, which performance is recorded, edited and produced into a sound recording at the instance of the producer. The singer does not own the copyright in the musical work, literary work or the sound recording itself.
1.3. Digital distribution of copyrighted works: Songs, films or any other copyrighted content can be distributed and communicated to the public through a variety of digital platforms. Today, most popular among these are OTT platforms such as Netflix, Prime Video, etc. Typically, these entities enter into either an exclusive license with the owner of the content for a particular term and for a specific territory. Since these entities are able to geo-block the content, they avail territory specific licenses for various titles. Therefore, a TV series that is available in the United States of America on X OTT service, may instead be available on Y OTT service in India. These entities do not seek a complete transfer of title typically but restrict themselves to a license for a specified term.
i. The agreements must contain a schedule detaining the timeline for delivery of prints and materials to the platform along with the technical specifications for such materials.
ii. Clauses must specify the manner of use of any trademarks and other artwork belonging to either party.
iii. The consideration or license fee can pe paid in a single lumpsum payment or be divided into instalments.
1.4. Book publishing agreements: These agreements are entered between the authors of books and publishers. Under the Copyright Act, the author of a literary work has the right to make copies of her work and sell them. However, such rights are normally transferred to publishing houses that have the means to mass produce the book and aid in the distribution of the work. This may also include various formats in physical or digital form. The rights granted could also include the right to translate the books into various languages. Typically, the author retains the right to make film/television adaptations of the book.
Example: "The Author grants the Publisher the exclusive right during the Term to reproduce, print, publish, distribute, translate, display and transmit the Work, in whole and in part, in the Territory, in such languages and formats as agreed to between the Parties. It is clarified that no film, motion picture, television, radio, dramatic or other adaptation rights are granted to the Publisher and the Author can exploit such rights."
i. Publishing agreements must contain detailed clauses on when the author will deliver the work to the publisher.
ii. The acceptance of the work for publication is usually left to the discretion of the publisher.
iii. The author gives the publisher the sole and exclusive right to publish and distribute the work. The author, however, may retain other rights such as the right to translate the work, the right to make adaptations, the right to make films, etc.
iv. The author is usually paid a certain advance amount on the date of signing of the agreement. Additionally, royalties may be paid to the author for the sale of each copy of the work payable as a percentage portion of the net sales revenue earned by the publisher.
v. The onus of receiving any prior approvals for copyrighted works to be included in the book usually lies with the author.
1.4.1. Option Purchase agreements: Such agreements are typically entered into between the author of the book and a producer. The agreement grants an option to a purchaser to avail an assignment or a license at a future date to make film/television/digital adaptations of the book. For example, A, the author of a book, can enter into an option-purchase agreement with B who wants to make a film-adaptation of the book. The option purchase agreement will give B a specific timeframe for some groundwork such as testing the viability of the project, raising funds, etc. At the end of the option period, B can exercise the option and have the adaption rights assigned or licensed to her. The author is usually offered an option-fee for the period during which the grantee-purchaser holds on to the option. Once the option is exercised, the parties can enter into an assignment or a license agreement as the case may be.
1.4.2. Adaptation agreement: If the film is based on a story or book written by a third-party upon which the producer seeks to rely, then the producer may avail an adaptation license from the author of the literary work.
1.5. Software license: In India, software is a subject matter of copyright law. The person writing and creating the program holds a copyright over it. The software can therefore be licensed by the owner for use by another entity. Software licenses are normally granted by companies to their users usually based on a subscription fee model.
Example: "Entity hereby grants the customer a non-exclusive, non-sublicensable, non-assignable, world-wide license to use the Service solely for the internal business operations of the customer in accordance with the terms of use specified herein."
1.5.1. Platform licenses for user-generated content: If the software is such that it allows the creation, storage and dissemination of user-generated content, the entity licensing the software must also take a license from each user to store and disseminate the user-generated content. For instance, with applications such as YouTube or TikTok, such a license would be required from the user. The clause must clarify that the user agrees to a non-exclusive, non-sublicensable, non-assignable, royalty-free license to be granted to the entity for the use of the content while the user continues to retain all the copyrights in the content.
1.5.2. Software as a service: Typically, in these agreements, there is an entity that has developed a software and provides services that aid in the productive use of such software. The entity enters into an agreement with the customer granting a customer a license to use the software for its business operations while the entity retains the IP in the software.
Example: "The Company agrees to license and grant access and right to use the Application to the Subscriber and provide to the Subscriber all other services necessary for the productive use of the Application, including, initial setup and installation, user identification, user account and password change management, data import/export, remote technical support, maintenance, training, backup and recovery, and change management ("Services") as further set forth in Schedule ["] of this Agreement."
i. These agreements must contain a clause preventing any reverse engineering of the software and controlling security breaches. This would also include clauses pertaining to data security and data protection.
ii. The data that belongs to the customer will continue to belong to her while the licensor/service provider will continue to own the software.
1.5.3. Software development agreement: In certain cases, one may choose to engage the services of a third-party software developer to develop a software or product under a contract of service. For instance, A may have a concept or idea but may not have the expertise to engineer the product. A can engage the services of B, third-party developer, to develop the product. B will be remunerated for his services. But A, whose resources (typically monetary resources as A would bear the operational costs) were expended on developing the product, will be the owner of the IP in the product.
Example: "The Service Provider agrees that all original works that are made by the Service Provider (solely or jointly with others) using the Company's resources, or any other assistance that may be provided by the Company, pursuant to this Agreement, are protectable by copyright as "works made under a contract of service" under the Copyright Act, 1957.
The Service Provider hereby agrees to transfer and assign all intellectual property rights that may be developed or created by it pursuant to this Agreement without any claim over any such work, and waives any other right that the Service Provider may have in law."
1.5.4. Application programming interface ("API") integration agreement: APIs are tools that permit interaction between various software intermediaries. In API integration agreements, (i) a party licenses its API (either on an exclusive basis or on a non-exclusive basis) to another party for integration of its API into the software (in the form of an app or website), or (ii) two parties propose to integrate their software to create a new product.
i. In these agreements, there must be a two-way obligation to keep the licensee's tool/programme and the licensor's API fully functional and usable at all times.
ii. These agreements would also contain clauses on data security, data protection and covenants on the basis that security breaches will be controlled and monitored.
iii. It must be specified that the integration agreement will not result in any transfer of IP and each party will continue to hold their IP rights. However, a limited right to use the tool and the API will be licensed to the other party for the duration of the agreement. In case a new product is created both parties hold rights in the IP jointly.
2. Trademark:
Trademarks can be assigned or licensed irrespective of whether they are registered or unregistered trademarks. Generally, all assignments and licenses of trademarks must be in conformity with the principles and rules under the Trademarks Act, 1999.
Apart from what is covered in Part I of this article, the following must be noted while drafting clauses on assignments and licenses of trademarks.
Assignment:
i. The grant clause in an assignment agreement must clearly specify whether the mark is being assigned together with the goodwill of the business or not.
ii. Assignment agreements must contain a clause/schedule describing all the trademarks that are being assigned, and details pertaining to their registration.
iii. The assignor must agree to execute all necessary documents in order to record the assignment with the Registrar of trademarks under Section 45 of the Trademarks Act.
i. Prevention of naked licensing: While licensing a trademark, the terms of use need to be specific and clear. If a license permits the unbridled use of a trademark without any quality assurance measures in place, such a license amounts to 'naked licensing'. The clause must also state that the mark can only be used in relation to the goods and services specified in the agreement. Quality control is essential to protect the interests of both the licensor and the end-user of the product.
ii. There must be a separate clause defining the uses of the mark by the licensee that are permitted and uses that are strictly disallowed and not within the ambit of the license.
iii. The agreement must also include a clause stating that no rights in and to the trademarks are being transferred or assigned by virtue of the license.
iv. The more control the licensor would like to exercise over the use of the mark, the stronger must be the quality, use and termination clauses of the agreement.
v. It must be specified that the licensee shall not have the right to further assign or license the mark to any third-party.
Apart from these issues, transfer of trademarks through assignment and license might involve larger commercial arrangements that impact the creation, use and transfer of trademarks. Some of these are discussed below:
2.1. Transfer of trademark under a franchise agreement: Franchisors typically have proprietary methods of doing business and own trademarks which consumers come to solely associate with the business of the franchisor. Internationally renowned brands such as McDonalds or Krispy Kreme follow this business model where their businesses have proprietary elements which they license to local businesses all over the world. The businesses which acquire a license of this kind under a franchise agreement will have the right to set up a local unit of the franchisors business and run it as per the terms of the franchise agreement.
2.1.1. Use of the franchisor's trademark: The main condition as to the use of the franchisor's trademark is that the franchisee will be permitted to use the franchisor's trademark in accordance with the terms specified in the franchise agreement. Please note that the agreement must clarify that this is a limited use license granted to the licensee and does not result in transfer of ownership. Further, in relation to the franchisor's business, the franchisee shall not have the right to any mark other than the ones that it is authorized to use under the franchise agreement.
Example: "The Franchisee agrees that the Franchisor is the sole and exclusive owner of the TRADEMARKS and has the absolute right to control the Franchisee's use of the TRADEMARKS. For removal of doubts, the Franchisee agrees and affirms that it has not acquired any right, title or interest in the TRADEMARKS and that its limited right to use the TRADEMARKS is governed by the terms of this agreement. Further, the Franchisee agrees that it shall not register, in its name or in the name of any associated entity or person, any trademark, logo or domain name that is identical or similar to the TRADEMARKS."
i. The franchisee must not be permitted to take any action against any infringer without the prior consent of the franchisor. It is best for the franchisor to initiate any legal action as the sole and absolute owner of the mark.
ii. If the agreement is terminated, any action taken by the franchisee in respect of the trademarks must revert to the benefit of the franchisor and the franchisee must stop associating itself with the trademarks of the franchisor.
iii. There must be a clause allowing the franchisor to terminate the agreement if the trademark is used in a manner that would bring disrepute to the business of the franchisor.
iv. There must be clauses controlling the use of the trademark by the franchisee in advertising and marketing literature.
1.2. Marketing Agreement: A marketing agreement allows a third-party a limited right to display the trademarks of the licensor while marketing, advertising and selling products that belong to the licensor.
i. This agreement has to specify that the licensor continues to own the trademark and this agreement does not result in any transfer of ownership.
ii. Such a license must specify the manner in which the trademark is permitted to be used. Any contravention of such use restriction would amount to a material breach of the agreement.
Patents can be assigned or licensed for specific purposes meaning that patent rights can be granted to make, sell or import the subject matter of a patent.
Some specific agreements pertaining to patentable subject matter are discussed below:
3.1. Technology transfer agreement: Technology transfer agreements (" TTA ") involve the licensor transferring its IP and know-how to the transferee for a specific period of time and for a specific purpose. A large part of arrangements of this nature would depend on the specific facts and circumstances of each case. Not everything that is transferable under a TTA will be IP. One part of the transfer may relate to the licensing of IP such as patents or software for specific purposes, while the other would include information and know-how. Clauses in relation to the sharing of information and other know-how are strictly contractual and are secured by having strong confidentiality clauses in the agreement.
i. The agreement must define the IP or the technical know-how to be transferred clearly. The definition must be tightly worded so as to cover only what is necessary, failing which, the licensee will secure access to more than what was intended by the parties.
ii. The territory within which these rights can be exercised must be specific, and the term must also be specified. The term must be agreed upon based on prevailing norms of the Reserve Bank of India and other regulations in this regard. The termination clause must specify the consequences of early termination, reversion of the IP to the licensor, and, to the extent possible, destruction of any confidential material or information within the possession of the licensor.
iii. Consideration including royalty payments must be structured properly.
iv. As far as the know-how is concerned, the confidentiality clause matters the most. The confidential information must be clearly identified as such. If the information is highly technical, this clause must be drafted in an industry specific manner. The consequences for any breach must be clearly identified.
v. The tax liability under TTAs varies based on whether the parties are Indian or would include foreign collaborators. The tax liability clause must identify the manner in which all taxes must be paid.
vi. TTAs involve heavy obligations on both parties. The licensor must ensure that the technology is used properly and for that ensure that the licensee, at all times, has the technical capabilities that are required to achieve it. This may include training, testing, quality control and other measures. The licensee will have the responsibility to use the technology to the fullest, make all payments on time and to maintain confidentiality throughout the duration of the agreement.
vii. Use of other IP, i.e., brand names or other literature, must be carved out through separate clauses defining all permissible uses.
4. Employment agreement:
Employment agreements must typically contain a blanket clause allowing the use and transfer of all IP created by the employee, during the course of employment, by and to the employer, especially where the employee is a senior member of the team. The clause also grants exclusive rights in all such IP to the employer.
Example: "The Employee agrees that all and any work executed and performed in the course of employment, whether or not conducted on the premises of the Company but related to the business of the Company, is being done on behalf of the Company. In this regard any discoveries, inventions, work created, data produced, concepts, ideas, creations and discoveries belong to the Company. The Employee hereby agrees to transfer and assign all intellectual property rights that may be developed or created by her without any claim over any such work, and waives any other right that she may have in law.
The Employee further agrees to execute, upon the request of the Company all necessary papers and otherwise provide proper assistance to enable the Company to obtain for itself (and to vest legal title in the Company), patents, copyrights, or other legal protection for such inventions, discoveries, innovations, improvements, original works of authorship, trade secrets and technical or business information in any and all countries."
In this article, which is the second of the two-part series on transfer of IP, we have discussed the manner in which various clauses in an IP transfer agreement must be drafted. There are several ways in which these agreements can be structured, but it is important to keep in mind the intention of the parties and the extent of rights that are to be granted. Similarly, rights must be granted in such a manner that would allow the full and proper use of the IP. Note that the example clauses given in this article are only indicative, and in any agreement, these clauses must be drafted to suit the relevant purpose and context.
This paper has been written by Suchita Ambadipudi (Partner) and Sheetal Srikanth (Associate).
1. In Waterman v. MacKenzie et.al , 138 US 252, the Supreme Court of the United States held that to determine whether an agreement is an assignment or a license, the legal effect of the clauses and the grant must be considered and not the mere nomenclature of the agreement or the headings for various clauses.
2. Section 2(d) and 2(uu), Copyright Act, 1957.
3. Section 17, Copyright Act, 1957.
4. 2018 (73) PTC 365 (Mad).
5. For similar issues arising out of making a sequel of a film, see, Ian Eagles "Copyright and the Sequel: What Happens Next?" in F MacMillan (ed), New Directions in Copyright Law, Vol 6, (Edward Elgar Publishing, UK, 2007) pp. 35-65. See also, Zee Entertainment Enterprises Limited v. Ameya Vinod Khopkar Entertainment and Ors. , MANU/MH/0512/2020.
6. For an overview of issues arising out of character- related rights, see, Arbaaz Khan Production Private Limited v. Northstar Entertainment Private Limited and Ors. , 2016 (67) PTC 525 (Bom).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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Sustainable innovation: Intellectual property, technology transfer, and global public goods
The role of intellectual property rights in technology transfer to developing countries and least developed countries to achieve the UN Sustainable Development Goals (SDGs) is a major theme of a new international collection of writing on intellectual property rights and the SDGs.
Professor Matthew Rimmer is one of three editors of The Elgar companion to Intellectual Property and the Sustainable Development Goals . The book is written by 33 authors from around the world (including QUT researchers Muhammad Zaheer Abbas , Felicity Deane and Saiful Karim ), and comprehensively covers the complexities of every aspect of intellectual property (IP) in achieving the SDGs.
“The book contains a variety of proposals to re-align and reform intellectual property law, policy, and practices to better promote the SDGs,” Professor Rimmer said.
The Elgar companion to Intellectual Property and the Sustainable Development Goals is available now in Hardback and eBook formats from Edward Elgar Publishing .
To find out more, visit QUT news .
Full List Of Trademarks The Rock Acquired When He Joined TKO Group
D wayne "The Rock" Johnson now officially owns the rights to his iconic wrestling persona, according to the WWE 2023 Earnings release. The announcement showed the transfer of intellectual property from WWE to Johnson’s affiliates.
Per an IP Assignment Agreement (via PWInsider ), WWE assigned 'The Rock' trademark along with associated trademarks, service marks, ring names, taglines, and other related intellectual property assets to Johnson's affiliates.
A search of the US Patent & Trademark Office database shows marks such as 'The Rock' are now owned by a Florida-based entity called DJIP, LLC.
According to a new SEC filing , Johnson’s new IP includes the following nicknames and catchphrases:
- Rocky Maivia
- Team Corporate
- Rock Nation
- The Samoan Sensation
- The Blue Chipper
- The Brahma Bull
- The People’s Champion
- The Great One
- The Most Electrifying Man in Sports and Entertainment
Catchphrases:
- If you smell what The Rock is cooking
- Know Your Role and Shut Your Mouth
- Team Bring It
- Just Bring It
- The People’s Elbow
- Rock Bottom
- Finally, The Rock has come back to ...
- It doesn’t matter what…
- The millions… (and millions)
- Rockpocalypse
- Project Rock
- The most electrifying man in sports and entertainment
Additionally, WWE entered into an Independent Services Contractor and Merchandising Agreement with Johnson and his affiliates, wherein Johnson agreed to provide promotional services to WWE.
Under the terms of the agreement, Johnson will license the assigned IP and his name and likeness to WWE for use in certain licensed products related to professional wrestling for up to 10 years. In exchange for his services and the IP licenses, Johnson received restricted stock units worth $30,000,007 in Class A common stock.
The Johnson Equity Award will vest in stages: 25% immediately, 25% upon completion of specified services, 25% by December 31, 2024, and the remainder in equal monthly installments from January 31, 2025, to December 31, 2025.
Cashing in on his brands
Prior to this agreement, Johnson received annual royalties from WWE for his appearances in WWE-produced content, merchandise, and services, totaling approximately $491,000 for the year ended December 31, 2023.
Following the agreement, Johnson will continue to receive annual royalties from WWE and will also earn royalties from licensed products utilizing the assigned IP and his intellectual property rights, as outlined in the Johnson Services Agreement.
This comes after Johnson was appointed to TKO Group Holdings Board of Directors in January. He said at the time:
“My grandfather, High Chief Peter Maivia, and my dad, Rocky ‘Soulman’ Johnson, would’ve never thought this day would come. Which is why I’m very humbled to have a seat at the table that has decades of history and family legacy for me. A table that my family helped to build. Being on the TKO Board of Directors, and taking full ownership of my name, ‘The Rock’, is not only unprecedented, but incredibly inspiring as my crazy life is coming full circle."
Related: 'This Kid Ain't Gonna Make It': The Undertaker Recalls Reaction To The Rock's WWE Debut
COMMENTS
7 min. 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 ...
An intellectual property transfer agreement is a document that outlines the terms of any contract between two parties, typically in the context of an employment situation. The agreement details which pieces of intellectual property are being transferred to whom and what will happen if one party breaches the contract.
The intellectual property transfer agreement needs to highlight the scope of activities the assignee can perform in precise details of what encapsulates the IP in the transaction. ... for the sake of obtaining the copyrights and patents that are needed for the security of the Employer's ownership rights in the Intellectual Property. This ...
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 ...
Key Terms. Conclusion. 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 ...
Technology transfer (TT) is a collaborative process that allows scientific findings, knowledge and intellectual property to flow from creators, such as universities and research institutions, to public and private users. Its goal is to transform inventions and scientific outcomes into new products and services that benefit society.
Generally, in agreements concerning the use and/or transfer of IP, the following clauses are important: 1. Assignment: In any IP assignment, there is a clause specifically assigning/transferring the title in the IP from the assignor to the assignee. This clause must clearly state the extent of the rights that are being granted to the assignee.
Except for name changes, we first need an agreement between the parties describing the terms of the sale or transfer. Then, we need to record the assignment of the intellectual property rights in the appropriate office. (Note: Licensing intellectual property is not the same as transferring ownership. Licensing deals with a temporary right to ...
This Intellectual property agreement is entered into on (date) and will be effective from the same date, between [Sender.FirstName] ... There are two ways through which you can transfer intellectual property rights to another party. The first one is licensing, which means the licensee pays a fee to use the creator's product/innovation. ...
Technology transfer licensing agreements. Licensing agreements are legally binding contracts where the owner of intellectual property (IP) in a valuable technology (the licensor), gives someone else (the licensee) permission to use that IP in ways (terms) that are spelled out in the agreement.. These terms determine the rights of the licensee: a broad license for any purpose in any territory ...
I. Agreement. The term "Agreement" shall mean this instrument and all Schedules and Exhibits attached hereto. 1. Sale, Purchase and Transfer of Intellectual Property Rights. 1.1 Assets. Subject to the terms and conditions of this Agreement, at the Closing referred to herein, Seller agrees to sell, transfer and assign and Buyer agrees to
Key Components of the Agreement. Identification of Parties: This foundational section establishes the primary entities involved in the agreement, ensuring clarity from the outset.; Transfer of Intellectual Property: This is the heart of the agreement, detailing the transfer of rights and interests in intellectual property created during the employment or collaboration period.
An intellectual property rights transfer agreement is a contract that transfers the intellectual property rights of a licensor to a licensee. In other words, this type of agreement relinquishes a licensor's rights to their intellectual property to a third party. Sometimes, the agreement can be exclusive, which means only licensee is authorized ...
An assignment to intellectual property rights refers to the act of transferring ownership from the assignor to the assignee. The document that creates this transfer is often referred to as the "assignment." The two parties entering into the assignment can either be legal entities or individuals. The assignment will include language in which the ...
Updated on 11 November 2022. Intellectual property has to be transferred by a legal process - an assignment—if you want to dispose of it to someone else. And by law you need a written document, with the owner's signature on it, to do this. Often, assigning your rights won't be the best way to exploit your assets - a licence deal with ...
The Technology Transfer Agreement (TTA) helps in the development of a legal relationship between a licensor (the transferring company) and the licensee (the receiving company). The licensor assigns or licenses their registered industrial or intellectual property rights (including patents, trademarks, copyrights, utility models, technical ...
Transfer Rights. 2.1 Transferor agrees to transfer and assign to Transferee all right, title, and interest in and to the Intellectual Property, including any and all associated goodwill. 2.2 The transfer of rights shall include the right to modify, alter, or otherwise use the Intellectual Property for any legal purpose. 3.
Technology transfer is the process by which technology is transferred from federal labs, universities, or other research institutions to industry where it can be developed into a commercial product or service. The U.S. government funds over $100 billion in research and development activity annually, which leads to a continuous pipeline of new ...
Article 7 ("Objectives") of the TRIPS Agreement states that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of ...
Assignment Agreements has been properly allocated and assigned to each Group according to principles set forth in this Agreement. To the extent that any assignment, transfer and conveyance of Intellectual Property pursuant to Section 2.2 is not consummated as of the Effective Time, or any assignment, transfer or conveyance of Intellectual Property is improperly consummated, the Parties shall ...
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is the most comprehensive multilateral agreement on intellectual property (IP). It plays a central role in facilitating trade in knowledge and creativity, in resolving trade disputes over IP, and in assuring WTO members the latitude to achieve their domestic ...
The assignment of these rights is the most common way for their holders to make their rights economically profitable. A contract for the transfer of intellectual property rights consists on an agreement between a rights holder (licensor) and a third party (licensee). By means of this agreement, the holder of intellectual property rights assigns ...
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The role of intellectual property rights in technology transfer to developing countries and least developed countries to achieve the UN Sustainable Development Goals (SDGs) is a major theme of a new international collection of writing on intellectual property rights and the SDGs. Professor Matthew Rimmer is one of three editors of The...
The software developer has struck a transfer pricing agreement with the Tax Office and has agreed to retain intellectual property in Australia that it will pay future tax on.
Dwayne "The Rock" Johnson now officially owns the rights to his iconic wrestling persona, according to the WWE 2023 Earnings release. The announcement showed the transfer of intellectual property ...
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