Exploring Intellectual Property Assignments

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If you create or invent something with commercial potential, someone may eventually want to buy the rights from you. That's usually done with an assignment (or as its sometimes called, an assignment agreement). An assignment is a permanent transfer of your ownership rights to a copyright, patent, trademark, or trade secret. Why would you give up all rights? Usually it's because someone makes you an offer that's hard to refuse — typically a lump sum payment, or periodic royalty payments based on a percentage of sales or units. When you assign your creation, you are the assignor and whoever purchases the rights is the assignee.

What’s the Difference Between an Assignment and License?

Another way people make money off innovations is by licensing the rights. A license is analogous to renting a house – the owner gets periodic payments and can reclaim possession when the agreement is over. An assignment is more like the sale of a house, after which the seller no longer has any rights over the property.

A license is an agreement in which you let someone else commercially use or develop your trademark, copyright or patent for a period of time. In return, you receive money — either a one-time payment or continuing payments called royalties. Keep in mind that an assignment is a permanent transfer. You say goodbye to ownership and unless you were clearly defrauded, you will never re-acquire your rights, unless you can afford to buy them back.

Even though they have different legal meanings, the terms assignment and license are sometimes mistakenly used interchangeably. Indeed, these two types of agreements sometimes seem to have the exact same effect. This is true in the case of an unlimited exclusive license, in which a licensee obtains the sole right to market a copyright or invention for an unlimited period of time. Because the two agreements may overlap, it’s important to examine the specific conditions and obligations of each agreement rather than simply to rely on terms such as assignment and license

Bottom Line: Assignments are unconditional transfers of the rights in question, without limitations on how long the transfer lasts or the conditions under which the rights may be used. By contrast, licenses give permission for a party to use a copyright, patent, or trademark under certain specified conditions for a defined period of time. 

Employers and Assignments

Employers typically own the rights to inventions or other creative work that are created by an employee in the course of employment. There are exceptions to this rule and some of them are discussed in Who Owns the Patent Rights? Employer or Inventor? To add another level of security, employers sometimes also require that employees sign assignment agreements prior to beginning employment. These pre-invention assignments, anticipate that the employee will create something valuable and protectible during employment. These rules are not the same for independent contractors and for that reason ownership disputes often center on whether the creator was an employee or independent contractor.

Types of Assignments

There are three common types of assignments in intellectual property: trademark assignments, patent assignments, and copyright assignments.

Trademark Assignments

Trademarks are the names or logos that are used to identify goods and services. If you were buying the Coca-Cola Company, you would want to make sure that the sale included an assignment of the company’s trademarks and their associated goodwill (the intangible value that the trademark possesses because consumers know it). Trademark assignments typically occur when a company is sold. A trademark assignment may also occur as part of a bankruptcy or may be used as a security interest when a business seeks to obtain a loan.

Once the assignment is made, the business buying the mark, the assignee, becomes the owner, and assignor (the seller) has no further ownership interest. On some occasions, an assignment may be transferred back to the original owner if certain conditions are met. Federal trademark law requires the assignment of a mark to be in writing. Assignments should be recorded with the U.S. Patent and Trademark Office (USPTO), and the new owners can obtain new certificates of registration in their names. Using the USPTO’s ETA system (Electronic Trademark Assignment), a trademark owner can file a trademark assignment electronically.

Learn Why You Need to Conduct a Trademark Search.

Patent Assignments

Patents protect inventions, industrial designs, and plants. Assignments of patent rights must be in writing. Many inventors assign their invention, either to the company they work for under an employment agreement or, in the case of independent inventors, to outside development or manufacturing companies. These assignments typically transfer ownership of any patent that issues on the invention and may (although usually not in the case of employed inventors) provide for compensation for the inventor, although employed inventors often receive little or no additional compensation, because they are getting paid to invent. Like trademark assignments, patent assignments must be recorded with the USPTO. Trade secrets – confidential information that provides a business advantage – and patent applications or unpatented inventions can also be assigned.

Find out more about Who Owns a Patent?

Copyright Assignments

Copyrights protect music, art, writing, software, and other forms of creative expression such as websites, blogs, and video. Copyright assignments must be in writing. Usually, a copyright assignment involves the transfer of the entire copyright, as when a freelance writer assigns all copyright interests in a particular article to a magazine. But an assignment may also transfer less than the whole copyright. For example, an author might assign the right to promote, display, and distribute a novel to a publisher while reserving the right to create derivative works (such as a screenplay) from that novel. Copyright assignments may be recorded at the U.S. Copyright Office. Copyright assignments, unlike patent and trademark assignments, can be terminated under certain conditions. For works published after January 1, 1978, any copyright assignment by the author may be terminated by the author, the author’s surviving spouse, or the author’s children or grandchildren 35 years after publication or 40 years after the assignment, whichever comes first.

Portions of this article are derived from Patent, Copyright & Trademark: An Intellectual Property Desk Reference by Richard Stim

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