Exploring Intellectual Property Legal Agreements

Intellectual Property Agreements serve to outline the rights and obligations of two or more parties when valuable IP rights are involved.  These agreements can address the license and assignment or sale and transfer of IP ownership from one party to another, issues of IP ownership in joint ventures, shared ownership concerns, non-disclosure requirements for employees, contracts and agents, and a host of other legal issues.  This article will explore common provisions in two popular agreements that involve IP issues – IP Assignment Agreements and Non-Disclosure Agreements.

IP Assignment Agreements

An IP Assignment Agreement is a legally binding contract executed by a seller of Intellectual Property rights, known as the assignor, and the purchaser, known as the assignee.  The agreement should address the parameters of the assignment, the compensation, and the actual rights being assigned.

1. Parameter of Assignment.  IP Assignments generally involve a full and irrevocable transfer, assign, conveying, and delivering of all proprietary ownership and all other right, title, and interest in and to the Intellectual Property asset, be it the copyright, trademark, or patent.  In addition to ensuring proper execution of this agreement, the assignee should also require written assurance that the assignor will execute all other documents and complete all other tasks that the parties agree is necessary to perfect, establish, protect, prosecute, defend, and enforce assignee’s right to the property, such as registering the mark, in the case of trademarks, or updating the mark’s registration with the USPTO.
   
2. Compensation.  This section must address what the assignee is giving up in exchange for the intellectual property rights.  It could be a cash payment, a stock payment, a mixture of both, or some other form of payment altogether.  If it is an agreement with a subsidiary company, there may not be any consideration at all.  Generally though, the purchase price is substantial for valuable intellectual property rights, as it is not unusual to see hundreds of thousands, if not millions, shares of stock in play.
   
3. Scope of Rights.  In a license situation, the actual rights being assigned by licensor to licensee must be described as well.  Often the right usually comes with certain conditions or limitations as to the allowable use.

Non-Disclosure Agreements

            Companies who own valuable IP rights that must be made available to employees, agents, or other third parties in the course of business usually insist on executing non-disclosure agreements.  A well-drafted Non-Discosure Agreement (NDA) must define the term “confidentiality” and the obligations of the parties not to disclose it.

1. Confidentiality.  In a Non-Disclosure Agreement (NDA) involving IP rights, there is a “Disclosing Party” who is anticipating that it will be disclosing confidential information about one’s IP as part of the arrangement, and a “Receiving Party” who will be learning about the information.  The Disclosing Party wants to use the agreement to give legal force to the Receiving Party’s promise not to disclose the information.  In order to do so, the agreement must be carefully drafted to explain the obligations of the Receiving Party.
   
2. Information Only for Benefit of IP Holder.  Generally, the receiving party should be required to “hold and maintain the Confidential Information in strictest confidence for the sole and exclusive benefit of the Disclosing Party.”  To make sure confidential information remains in confidence, the Receiving Party shall also agree to “carefully restrict access to Confidential Information to other employees, contractors and third parties as is reasonably required.”  If, for instance, confidential information must be revealed to third parties, such as outside contractors, towards the end of successfully completing the project, the Agreement should recite that “the Receiving Party shall require those persons to sign nondisclosure restrictions at least as protective as those in the underlying Non-disclosure Agreement.”
   
3. Define the term Disclosure.  Finally, it is wise to emphasize in the Agreement that the Receiving Party “shall not, without prior written approval of Disclosing Party, use for Receiving Party’s own benefit, publish, copy, or otherwise disclose to others, or permit the use by others for their benefit or to the detriment of Disclosing Party, any Confidential Information.”

Should you hire an Intellectual Property Lawyer?

Intellectual Property Agreements are complex legal documents that should be drafted, quite frankly, by an attorney.  If you are an owner of a copyright, trademark, or patent and must draft these agreements by yourself, be sure to research the law and find examples of actual agreements that you can use as templates. These laws are quite complex and change frequently so the assistance of a certified IP Lawyer would be highly recommended.