employee intellectual property assignment agreement in cts

• Running the Business

Employee proprietary information and inventions assignment agreements: what they do, and what could happen without them

The typical onboarding process for a new employee at nearly all companies in most industries includes a requirement for the employee to sign an agreement regarding confidentiality and ownership of inventions, copyrights and other intellectual property.  This article explains the purpose of such an agreement and consequences that result from a failure to have such agreements signed by each employee.

What is a PIIA?

The agreement goes by many names, but tech-savvy companies often refer to them as PIIAs (or ''Pee-as'' for short). PIIA is the acronym for the most common name for these agreements, ''proprietary information and invention assignment'' agreements.  The typical form of agreement addresses two main areas: confidentiality and ownership of intellectual property. 

The agreement requires that an employee maintain the employer's non-public and proprietary information confidential and contains language similar to what you would see in a non-disclosure agreement ( see more about non-disclosure agreements ). 

The agreement also requires that the employee agree that whatever the employee creates, discovers, develops or invents while employed with the company is owned by the company. Companies that are in the business of developing products or technology that are protectable by copyright (as is the case with most software companies) can rely on the work for hire doctrine under US copyright law, which automatically gives the employer ownership of copyrights in works of authorship ( eg , software, manuals and documentations) written or prepared by an employee within the scope of his/her employment. The work for hire doctrine, however, does not apply and ownership is not automatically vested in the employer in the case of other intellectual property rights, most notably in the case of patents (see our article providing an overview of  intellectual property rights and a more detailed discussion about  copyrights and  patents ). 

Therefore, the PIIA is the employee's agreement that everything created by the employee for the employer is owned by the employer, and if the employer needs the employee to do anything or sign any document to confirm that the employer owns all the rights in the intellectual property developments, the employee agrees in the PIIA to do so.

PIIAs will also often include non-solicitation clauses and, for those employees working in states where non-competition clauses are enforced, the agreement may also include a non-compete clause (see our article discussing  non-solicitation and non-competition clauses ).

Does the company really own everything the employee creates?

If an employee can show that he or she created intellectual property on their own time and without the use of any of the employer's facilities, equipment, supplies or trade secret information and if the intellectual property did not relate at the time of development to the employer's business or actual or anticipated research or development, then the employee would continue to own such intellectual property. 

In some states, such as California, Washington, Texas and Illinois, this exception is expressed in a statute that requires that the PIIA include a notice of the exception.  Such statutes favor the employer in that the burden of showing the exception applies is typically on the employee.

What happens if I don't have my employees sign PIIAs or if the PIIAs don't include all the bells and whistles?

Whenever a company goes through a financing, whether it is a seed round or an institutional VC round, or if the company is going to be acquired, the investors or acquirer will conduct due diligence. One of the issues that they will review is whether or not all the employees have signed PIIAs and whether or not those PIIAs require employees to assign to the company ownership of all intellectual property rights to developments created by the employee. Investors and acquirers want to make sure that the company owns its intellectual property, products and technology. 

Depending on where the company is in its lifecycle, the due diligence may focus on all employees, former and current, or it may just focus on the former and current employees that have been involved in research and development or engineering activities. (The failure of the company to obtain a PIIA from an employee strictly in an administrative capacity will generally not create a material issue). If due diligence identifies a problem with the PIIAs, or reveals that PIIAs were not signed, investors and acquirers may require that the company obtain signed PIIAs (or the equivalent) after the fact, which may necessitate the company having to pay the employees something in exchange for signing the agreement so that it is binding or, worse yet, give a former employee leverage to ask for something more. Giving someone leverage on the cusp of a financing or an acquisition may not end well for the company.

While PIIAs may seem like a routine document that is available from numerous online sources, it is essential that an employer have a form of PIIA that includes provisions that is enforceable and current and will withstand scrutiny from investor and acquirer's counsel. If you have questions about your form of PIIA, or if you want to make sure that you have forms of PIIA that will be enforceable for your employees wherever they may be located, within or outside the United States, please contact a member of our Technology, Data and Commercial practice .

Drafting Employee Work Made For Hire and IP Assignment Clauses | Practical Law

Drafting Employee Work Made For Hire and IP Assignment Clauses

Practical law legal update 6-523-4246  (approx. 4 pages).

Work Made for Hire and Assignment

• Secure an actual conveyance of the employee's rights.
• Minimize the risk of a successful challenge to the employer's rights at a later date.
• A further assurances clause in the event the employer finds it necessary or desirable for the employee to execute additional documents or assist the employer in its efforts to enforce the IP rights against third parties.
• A grant of power of attorney to the employer for the purpose of executing any documents and undertaking appropriate actions, if, for example, the employee is unavailable or uncooperative.

State Law Limitations

• Relate to the employer's business.
• Result from any work performed by the employee for the employer.

• Discover Thomson Reuters
• Product Logins

• Global directory
• Financial & Risk
• Reuters News Agency
• Tax & Accounting

Corporate Counsel Connect collection

Employer and employee ownership of intellectual property: not as easy as you think.

Tina A. Syring and Felicia J. Boyd, Barnes & Thornburg, LLP

Employers should not rely on assumptions of ownership

Intellectual property created during the course of an employee's employment does not equate to the employer's automatic and exclusive ownership of any and all intellectual property. In fact, employers who mistakenly believe that they own such property automatically can pay an expensive price – monetarily and through the loss of inventions or improvements – for failing to protect such intellectual property or effectively securing the rights from employees.

Critical to an employer's ownership of intellectual property is a written agreement with the employee, one which specifically assigns to the company any and all intellectual property created by the employee during the course of his or her employment with the company. Such an agreement is often called an "assignment of inventions" or "ownership of discoveries" agreement. Absent such an agreement, the employee may have ownership rights in the intellectual property he or she created while working for the company, even if the individual was specifically hired to invent a particular product or process.

To avoid disputes over whether sufficient consideration exists to support the validity of the agreement, employers should require that the agreement is executed prior to the commencement of the employment relationship, and the agreement should reflect that but for the employee's execution of the agreement, the company would not employ the individual. In the event the agreement was not entered into contemporaneous with the start of employment, the employer will need to provide additional, sufficient consideration to support the agreement. Such consideration can include, for example, a promotion, a one-time bonus, or, for example, a grant of restricted stock options. If entered into after the employment relationship has been established, the consideration must be more than a nominal amount in order to support the agreement. A dollar is not likely to constitute sufficient consideration.

Also important to the agreement is the inclusion of an addendum, wherein the individual identifies all intellectual property in which he or she has an ownership interest prior to the commencement of his or her employment with the company. If the agreement is executed after the commencement of employment (and sufficient consideration has been provided as noted above), the employer still should have the employee identify all intellectual property he or she believes to own. In the event the employee identifies and claims ownership of intellectual property that has been created during the course of employment and with company resources, and claims ownership to such property, the company should immediately work to determine if the employee truly owns it or if it is owned by the company. By doing this at the outset of the relationship and/or execution of the agreement, employers are proactively mitigating possible arguments later down the road about who owns what.

Employers also should make sure the written agreement complies with applicable state laws. For example, certain states require that the agreement include clear language carving out intellectual property created by the employee (i) entirely on his or her own time, (ii) without the use of any company property (e.g., equipment, supplies, facilities or confidential, trade secret information), (iii) that does not relate directly to the company's business or anticipated research or development, and (iv) does not result from the individual's work performed for the company. Some employers require employees to continually disclose intellectual property created outside the realm of his or her employment relationship. Again, this is done to avoid future arguments as to whether the company actually owns such intellectual property.

Next, employers should include language detailing what happens if the employee misappropriates and/or infringes upon the company's ownership of intellectual property. The agreement should contain a remedies and relief provision, which includes the right to seek injunctive relief and the recovery of attorney's fees and costs upon demonstration of the employee's breach. Often times, employers forget to include such language and, as a result, there is no meaningful "teeth" to the agreement, causing some employees to be bold in their self-interested actions.

Finally, employers should remember to use similar "assignment of inventions" or "ownership of discoveries" provisions or agreements when working with independent contractors. The independent contractor agreement should clearly state that the independent contractor's work of authorship, finished product, invention, or other intellectual property will be owned exclusively by the company, free of any royalty fee or license. The agreement also should state the independent contractor "hereby assigns" all rights in the intellectual property so to eliminate any issues if and when the company pursues a patent or copyright.

Tips for the employer:

• Determine if you have a written agreement with your employees and independent contractors. If so, does it include an "assignment of inventions" or "ownership of discoveries" provision? Does that provision clearly state the employee "hereby assigns" all rights and ownership in the intellectual property, trademarks and/or copyrights?
• Make sure the written agreement is supported by sufficient consideration. Was the agreement executed prior to commencement of employment or later? If later, what additional consideration did the company provide to the employee in exchange for his or her execution of the agreement?
• Have prospective employees and/or independent contractors clearly identify, in writing, any intellectual property they may own prior to commencing the employment or contractual relationship.
• Periodically have employees update and identify, in writing, any intellectual property in which they believe they own and make sure such intellectual property was created independent of the company's resources and the employees' duties.
• Conduct exit interviews with employees and independent contractors, reminding them of their contractual obligations.

Opportunities exist for employees to own their ideas

Where there is no employment agreement, policies or written agreements to assign rights to the employer, employers may still successfully assert ownership rights in employee inventions created during the course of the employee's employment. The lynchpin to an ownership analysis is often whether the idea was created "in the course of the employment." It is not sufficient for an employer to point to a paycheck and lay claim to all of an employee's ideas. Rather, the idea at issue must have been created during the course of the employment relationship . Thus, close examination of the relationship may reveal that the employee owns the ideas because they were developed outside of the employment relationship.

A primary focus of this analysis will be the reason for the hire of a particular employee. If the employee was hired to create intellectual property as part of their job, the employer will be the owner of the intellectual property. Thus, examination of the written employment contract and the duties described therein can be determinative of the ownership inquiry. Absent a written agreement, the courts will look to the nature of the position and whether the employer gave directives or set goals for the employee to achieve. Ideas which stem from these directives will generally belong to the employer. Consideration needs to be given to all the circumstances.

For example, care must be taken when asserting ownership simply because the idea was conceived or developed at home, during non-working hours or using personal equipment. The fact that an employee used the employer's equipment is not enough by itself to show that the employer should own the intellectual property created with the use of that equipment. Similarly, it is not enough for the employee to claim ownership simply because he or she used their personal equipment or conceived the idea at home. The analysis will delve deeply into the role the employee played at the company and whether the idea stemmed from that role. Thus, the employee in the shower at home who suddenly conceives of the long sought after solution he has been working on at his job cannot claim ownership of the idea simply because the idea arose in the shower. Likewise, an employer cannot claim rights to an employee's creation of a computer software game built at home where the employee's work role bears no relationship to game creation, even where the employee took notes during work hours related to his game ideas or tested those ideas on employer-owned computers.

One must also consider whether there is, in fact, an employee-employer relationship. In many cases, the hire is one of an independent contractor. This too is a multi-factor analysis, but one with significant consequences. Independent contractors generally own what they conceive in the absence of written agreements specifically transferring ownership of the same to the contractor. For example, under federal copyright laws, ownership of copyrightable works is generally held by the author (the individual who creates it), with the express of exception of works made by employees during the course of their employment. This exception does not apply to works made by independent contractors. Independent contractors will own the copyright unless: (1) the work falls within one of nine statutorily specified types of works and there is a written "work-for-hire agreement" between the creator of the work and the company who commissioned its creation; or (2) the copyrights are assigned in writing by the contractor. The nine types of works that qualify as works for hire are narrow: a contribution to a collective work, part of a motion picture or other audiovisual work, a translation, a supplementary work, a compilation, an instructional test, a test, answer material for a test, and an atlas. Fall outside these categories and the copyright belongs to the independent contractor.

Patent ownership, like copyright, is presumptively owned by the inventor, i.e. the employee inventor. Employment agreements will usually require assignment of ideas, including patentable ones, to the employer. Even if such an agreement is not in place, employee ownership may not result in exclusivity of use or exploitation of that idea. The employer may still hold "shop rights" in the process or invention whose development it supported. The idea of shop rights simply gives an employer who provided funding, materials, tools, or work time for the project nonexclusive royalty-free rights to use an invention. The employer may not assign or transfer any shop rights to another unless expressly allowed, with the exception of a transfer of the employer's business as part of a business sale.

Contracts will play a role in the ownership of trade secrets as well. Absent a contract, state law will govern ownership. This is a patchwork of laws and decisions which may assist the employee to assert ownership over a trade secret or attack the notion that the idea is a trade secret, where a contract does not exist or is not sufficiently specific with respect to the idea at issue. If the idea is not protected by copyright, patent or trade secret law, the idea is free for any and all to take, regardless of one's current or former employment relationship.

Finally, trademarks and slogans are not typically the subject of ownership disputes. Trademarks belong to those who use them, not those who create them. Thus, the company which uses a mark to promote a service or good will own the mark and the goodwill associated with that mark. Disputes over trademark ownership in an employee-employer relationship would be atypical.

Tips for the employee:

• Examine your employment agreement. What did you agree to do? Understand what you sign before you sign it and seek legal advice if you are unsure of what rights you have retained.
• Look at any other agreements executed and determine whether consideration was paid for the execution of those agreements. Agreements signed after you are employed will be open to challenge if additional, or insufficient, consideration was not provided for these new obligations.
• Keep records documenting the creation of your ideas on your own time, with your funds and your own equipment. Do not rely on memory and do not assume that ideas worked on at home or on your own time belong to you.
• Review non-compete agreements to assess their enforceability and reasonableness. Certain states will not enforce any non-compete agreements even those agreements which have the effect of hindering the freedom of employee job changes and which are not labeled as "non-compete" agreements.
• Were you an employee or an independent contractor? The difference matters in determining ownership and should be reviewed by a legal professional.

This Barnes & Thornburg LLP article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

About the authors

Tina A. Syring is a partner in Barnes & Thornburg LLP's Minneapolis office and a member of the firm's Labor and Employment Law Department. Ms. Syring counsels clients on a variety of labor and employment issues, drafts and negotiates executive compensation agreements, and works with employers on the impact of social media. Ms. Syring was selected for inclusion in the 2011, 2012, 2013 and 2014 editions of Minnesota Super Lawyers®, and was named a Minnesota Rising Star by Minnesota Law & Politics. In 2013 and 2014, Chambers USA recognized Ms. Syring as an up and coming lawyer in the area of Labor & Employment: Minnesota.

Felicia J. Boyd is a partner at Barnes & Thornburg LLP's Minneapolis office and is co-chair of the firm's Intellectual Property Department. Ms. Boyd focuses her practice on complex intellectual property litigation and has led plaintiff and defense litigation on a large variety of claims related to patents, copyrights, trademarks, and trade dress. Ms. Boyd was recognized by Chambers USA for her IP Litigation practice and has been included in The Best Lawyers in America for the years of 2010-2015 in the field of intellectual property law. In 2013, Minnesota Lawyer named Ms. Boyd as one of its "Attorneys of the Year" and Minnesota Monthly recognized her as one of "Minnesota's Best Lawyers."

Discover How Thomson Reuters Practical Law Connect Helps You Quickly Find Relevant Resources

Experience firsthand how this new integrated offering can save you valuable time by bringing together the legal resources you need to advise, negotiate and structure your business dealings; all from a single solution.

Follow us on Twitter

• LEGAL PRODUCTS
• Billing, returns and refunds
• Reference attorneys
• Support by product
• Product logins

Can we help

• Law of torts – Complete Reading Material
• Weekly Competition – Week 4 – September 2019
• Weekly Competition – Week 1 October 2019
• Weekly Competition – Week 2 – October 2019
• Weekly Competition – Week 3 – October 2019
• Weekly Competition – Week 4 – October 2019
• Weekly Competition – Week 5 October 2019
• Weekly Competition – Week 1 – November 2019
• Weekly Competition – Week 2 – November 2019
• Weekly Competition – Week 3 – November 2019
• Weekly Competition – Week 4 – November 2019
• Weekly Competition – Week 1 – December 2019
• Sign in / Join

• Featured Student Assignments (LawSikho)
• Intellectual Property Law

What is an employee intellectual property agreement

This article is written by Hannah Boban pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho .

Table of Contents

Introduction

Innovative minds often come up with innovative ideas and intellectual property is a creation of such ideas in the mind. As per law, the owner of such an idea is the person which brings it into existence unless there is a contract to the contrary. Many of us think that the employer owns the intellectual property that an employee creates in the course of his employment. However, an employer assuming that all rights of the employee over such intellectual property are extinguished might be careless in his approach. The employee still owns the claim rights of an author, moral rights and rights to object to alterations to work. So, it becomes crucial to include the conditions determining the ownership of intellectual property in the contracts of employment, agreements of independent contractors or in agreements of a designer or consultant.

Hence, it becomes critical to include terms determining the ownership of intellectual property in employment contracts, independent contractor agreements or agreements with a consultant or designer. In this article, we will understand the concept of an employee’s intellectual property and what are the important clauses that should be drafted in an employee’s intellectual property agreement. 

What is the meaning of “in the course of employment?”

If an employee brings any innovative ideas in the course of business or employment, the employer can claim the same if it was already mentioned in the contract and the employee also agreed to the same. But in case the intellectual property is created outside the course of the employment, an employer cannot claim the rights over it. For example, if an employee is hired in the accounting team of a designing company and if that employee designs a new pattern for a product of the company, he can be entitled to the intellectual property right in that design as he has done something outside the course of his employment, i.e. he has done something outside the terms of the employment of an accountant post. So it is necessary to have clarity on the duties of the employees to differentiate the scope of and what will constitute “in the course of employment” in the agreement agreed upon by both the parties. 

Now let’s see what all should be stated in the terms of an agreement between the employer and the employee. 

It should be always remembered that an agreement with an employee should not be an oral agreement, it should always be a written agreement. It will be always best if the employer gets the agreement signed by the employee before the date of commencement of the employment. Most of the companies have their own standard template of employment agreements for various kinds of jobs in the company. For example, the agreement for a designer will be different from that of a developer or a tester.

In a case where the employment agreement is not signed before the commencement of the employment due to any valid reasons, all the rights and liabilities will be affected from the date of commencement of the employment.

Terms that must be included employee intellectual property agreement

Now let’s look into the broad terms that must be included in any agreements that define intellectual property right:

• The intellectual property created by an employee or by an independent contractor or a consultant during the course of employment  will be owned by the employer;
• Terms to the effect that the employee/independent contractor/consultant will sign any documents reasonably required (such as a deed of assignment) to record the employer’s ownership of the intellectual property created during his employment. This obligation should continue during and after employment. An employer should ensure that any assignment or license deals with existing rights and future rights;
• The confidentiality clause requires the employee or the consultant or the independent contractor to keep any information of the employer to be confidential and neither disclose the same nor use it in any matter outside the course of the employment;
• A clause should also be drafted for the employee or the consultant about whether they should disclose the new inventions and should a record be maintained to prove the originality of the work and the date of its creation;
• A clause where all the scope and definition of confidential information must be mentioned in the agreement. It must include the intellectual property created by the employee in the course of their employment, all the business information and any other intellectual property of the employer itself. The business information includes business plans, marketing strategies and plans, the company’s financial information, customer lists and any other details of the company necessary to be stated in the agreement. 
• It must also include a term which states whether there is any waiver of moral rights by the employee during the employment over the intellectual property.
• It must be made sure that a term for restraining the former employee on the competition for a specified period of time and in a specific geographical area. It should be made sure that such restraints are reasonable.

Key points for drafting the agreement

For the best legal document it should be kept in mind to draft the agreement with the following key points:

• Any ideas, discoveries or inventions must be properly disclosed to the company by the employee if such ideas, discoveries or inventions are related to the business of the company and is during the course or period of employment.
• The company will be considered as the owner of such ideas, discoveries or inventions.
• If an employee is hired particularly for any invention, or for developing a work product, then the right on such invention or work products are the employers since it was created out of the employer’s expense and request.

Let’s look into an example: If an app developer is strictly appointed by an employer for the development of a particular app, then once the app is developed and the course of employment of the employee has come to an end, the intellectual property right belongs to the employer.

It should be also kept in mind by the employer to get the signature of the employee appointed in an intellectual property assignment agreement to avoid any future problem of the same. 

• In the case of a startup company, in order to protect the important assets and to inform the investors of a startup company, which has an intellectual property which will be used as the pillar of the company for its success, the start-up must draft an intellectual property clause in its agreement which will be signed by everyone involved in the start-up which will also include the promoters, developers and the employees. 

Now let’s see some of the provisions that must be included in the employee intellectual property agreement:

Provisions to be included in the employee intellectual property agreement

First of all, we should understand that there is no standard form for employee intellectual property agreement. So it must be carefully drafted and signed by the employee for its legal binding. No matter what the situation is, or where the agreement is made it should be made legally binding

Mostly the employee intellectual property agreement has at least the following three clauses in common:

1. Assignment clause

Generally speaking, an assignment clause is where the rights, duties, or contractual obligations are transferred from one party/person to another person/party. The assignment may be wholly or partly. The clause must also mention the conditions under which a party/person can assign these rights, duties or obligations. 

In an employee, intellectual property agreement the assignment provision, the employee assigns to the employer his/her inventions/discoveries/ideas and also transfer the true and total ownership of the intellectual property. In this provision, it can either narrow down or broaden any inventions/ discoveries/ ideas or nearly anything the employee creates.

Example of an assignment clause in employee intellectual property agreement:

“I agree that all inventions that are (a) developed using equipment, supplies, facilities, or trade secrets of the company; or (b) result from work performed by me for the company; or (c) related to the Company’s current or anticipated research and development will be the Company’s sole and exclusive property and are hereby assigned by me to the Company.”

2. Disclosure clause

A disclosure clause in an employee intellectual property agreement is drafted in such a way that the employee informs the employer of the intellectual property that was developed as per the assignment clause. It should be noted that everything must be clearly and properly disclosed in this clause.

Example of a disclosure clause in employee intellectual property agreement:

“While I am employed by the Company, I will promptly inform the Company of the full details of all inventions, discoveries, improvements, and innovations, whether or not patentable, copyrightable, or otherwise protectable, that I conceive, complete, or reduce to practice (whether jointly or with others) and which: (a) relate to the Company’s present or prospective business, or actual or demonstrably anticipated research and development or (b) result from any work I do use any equipment, facilities, materials, trade secrets, or personnel of the Company or (c) result from or are suggested by any work that I may do for the Company.”

3. Power of attorney clause

Finally, there’s a clause where the employee appointed in the company appoints the company as an employee’s power of attorney to execute documents or take actions on behalf of them. The benefit of this clause is that the company will then have the power to sign documents or execute any other agreements on behalf of the employee to assign the intellectual property right to the business.

Usually, every company have this clause as a fairly standard one. The power of attorney provision guarantees the employer can register and administer the ownership rights without the employee, regardless of whether the employee is willing and able to assist.

Example of the power of attorney clause in employee intellectual property agreement:

“If the Company is unable to secure my signature on any document necessary to obtain or maintain any patent, copyright, trademark, or other proprietary rights, whether due to my mental or physical capacity or any other cause, I hereby irrevocably designate and appoint the Company and its duly authorized offers and agents as my agents and attorneys-in-fact to execute and file such documents and do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, and other proprietary rights with the same force and effect as if executed by me.”

Sample of an employee intellectual property agreement

Employee confidentiality and intellectual property assignment agreement

This EMPLOYEE CONFIDENTIALITY AND INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT (the “Agreement”) is made and entered into by and between [Company name] and [NAME] (“Employee”), as of [DATE] (the “Effective Date”). 

Each of Company and Employee hereinafter may be referred to individually as a “Party” or, collectively, as the “Parties.” 

In consideration of Employee’s employment with Company, the compensation Employee will earn in connection with such employment, Company providing Employee with access to Confidential Information (as defined below), and other good and valuable consideration, the sufficiency and receipt of which Employee acknowledges, Employee agrees as follows:

• Confidential Information:

i. Confidential information and trade secrets defined . Employee hereby acknowledges and understands the term “Confidential Information” means any data, information, or material of Company or its owners or its affiliates relating directly or indirectly to Company or its owners or Affiliates: clients and customers or potential clients and customers (collectively “Customer(s)”); competitors; vendors; advertisers; employees; contractors; suppliers; or business partners, that is discovered or developed by, or disclosed to, Employee through Employee’s relationship with Company, that is not generally ascertainable from public information, whether it is expressly identified as “confidential” or “trade secret,” that includes, but is not limited to: financial information; invoices; business plans; business and contract applications; contracts; forms; research; price lists; marketing materials; advertising materials and developments; sales materials and reports; copyrighted materials; Trade Secrets; the particular needs and requirements of Customers; identities of potential Customers; and all accompanying Customer data. Employee hereby acknowledges and understands the term “Trade Secret(s)” includes, but is not limited to, a confidential, proprietary, and/or sensitive: formula; software; methodology; model; architecture; pattern; compilation; program; device; method; technique; or process, that is discovered, developed in whole or part by Employee, or disclosed to Employee, through Employee’s relationship with Company, including any information, data, or material concerning the business of the Company, and all other information related to Company and its owner and Affiliates businesses, that is not generally known and readily ascertainable by proper means by any other person and/or Employee. This includes, but is not limited to, all inventions or discoveries made by Employee and/or Company (or its owners or Affiliates) resulting in whole or part from Employee’s relationship with Company. The term “Trade Secret(s)” also includes, but is not limited to, Customer lists, invoices and reports containing specifically developed information, such as the name, address, phone number, buying history and other traits of Customers, along with any other information that Company derives a competitive advantage from and that Company makes reasonable efforts to maintain a secret. For purposes of this Agreement, “Affiliates” means an individual, a partnership, a corporation, a limited liability company, an association, a joint-stock company, a trust, a joint venture, or an unincorporated organization, that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, Company.

ii. Use and restriction . Employee acknowledges that Employee will have access to and be provided with Confidential Information in connection with performing services for Company. Employee expressly recognizes that the efficacy and profitability of Company and its owners and Affiliates is dependent in part upon Employee’s protection of the Confidential Information. Employees may use the Confidential Information solely in connection with performing services for Company and its owners and Affiliates. To ensure the continued confidentiality of the Confidential Information, the Employee agrees to hold the Confidential Information in strict confidence. Employee shall not, either during Employee’s relationship with Company or for such period as such information remains Confidential Information after termination, disclose or use for Employee’s own benefit or for the benefit of any other individual or third party, directly or indirectly, any of the Confidential Information, except as such disclosure or use is expressly authorized by Company in writing. Employee hereby agrees to adhere to the method and form of protection of Confidential Information required by Company, subject to change at Company’s sole discretion. Employee shall not communicate any Confidential Information, even in furtherance of Company’s business, to any individual or third party not privy to the Confidential Information, without express consent by Company and the individual or third party’s agreement to be bound by confidentiality terms that adequately protect Company’s Confidential Information.

iii. Exceptions . The confidentiality and restriction on the use of Confidential Information under this Agreement shall not apply to Confidential Information to the extent that such Confidential Information: is now, or hereafter becomes, through no breach of this Agreement by Employee, generally known or available to the public; was known to Employee without an obligation to hold it in confidence prior to the time such Confidential Information was disclosed to Employee by Company; is disclosed or used, as applicable, with the prior written consent of Company and in accordance with any limitations or conditions on such disclosure or use that may be imposed in such written consent; or was or is independently developed by Employee without any use of or reference to the Confidential Information. In addition, notwithstanding any other language in this Agreement to the contrary, Employee understands that Employee may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney if such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law or for pursuing an anti-retaliation lawsuit; or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and Employee does not disclose the trade secret except pursuant to a court order.

iv. Required disclosure . The confidentiality obligations under this Agreement shall not apply to Confidential Information to the extent that such Confidential Information is required to be disclosed pursuant to the order or requirement of a court, administrative agency, or other authority, or otherwise by operation of applicable law. In the event of such order or requirement, Employee, if and to the extent permitted by law, shall give Company written notice thereof and of the Confidential Information to be disclosed as soon as practicable prior to the disclosure of such Confidential Information and shall provide such reasonable assistance as Company may reasonably request, at Company’s sole expense, in seeking a protective order or other appropriate relief in order to protect the confidentiality of the Confidential Information.

v. Other Nondisclosure Agreements . In the event that Company is subject to the terms of any confidentiality or nondisclosure agreement relating to some or all of the Confidential Information that imposes greater restrictions on the disclosure and/or use of such Confidential Information, then Employee shall comply with such greater restrictions to the extent that Employee is made aware of them in advance and in writing.

vi. Property of Company . Employee specifically acknowledges and understands that all Confidential Information and all of Company’s and its owners and its Affiliates strategies and files, including, but not limited to, computer data, reports, materials, records, documents, notes, memoranda, and other items, and any originals or copies thereof, related to the business of Company or its owners or its Affiliates, which Employee either is provided, prepares, uses, or simply acquires during the term of this Agreement, are and shall remain the sole and exclusive property of Company and, to the extent applicable, shall not be removed from Company’s premises without the prior consent of Company.

vii. Return or Destroy Confidential Information. Employee agrees, immediately upon the termination of the relationship between Employee and Company for any reason or upon earlier request by Company to make a diligent search for any and all documents, computer discs, electronic files, software, tapes, computer printouts, or any other material constituting Confidential Information described in this Section 1, and shall: cease using the Confidential Information; promptly return to Company or destroy all Confidential Information and any copies thereof; certify in writing (if requested in writing by the Company) that Employee has complied with the obligations of this Subsection vii.

viii. Return of Company Property . Employee agrees, immediately upon the termination of the relationship between Employee and Company for any reason or upon earlier request by Company to promptly deliver to Company all Company property not covered by Subsection vii.

2. Intellectual Property

i. Prior Inventions . Any intellectual property, including, but not limited to, any ideas, inventions, patents, trademarks, service marks, copyrights, creations, know-how, work product, and other developments or improvements, if any, patented or unpatented, that Employee, alone or with others, conceived, created, invented, developed, reduced to practice, or caused to be conceived and or caused to be reduced to practice prior to the earlier of (a) commencement of Employee’s employment with Company or (b) when Employee first provided services to Company, is listed on  Schedule I  attached hereto (“Prior Inventions”).

ii. Pre-Existing Work . If, in the course of Employee’s relationship with Company, Employee uses, relies upon, provides, or incorporates any Prior Invention or any other intellectual property Employee owns, or in which Employee has an interest, into any idea, invention, patent, trademark, service mark, copyright, creation, know-how, work product, and other development or improvement conceived, created, invented, written, developed, furnished, produced, or disclosed in whole or in part, alone or with others, whether or not during working hours, by Employee during the term of Employee’s employment with Company, Employee hereby grants Company, under all of Employee’s intellectual property and proprietary rights, the following worldwide non-exclusive, perpetual, irrevocable, royalty free, fully paid up rights: (a) to make, use, copy, modify, create derivative works of such intellectual property; (b) to publicly perform or display, import, broadcast, transmit, distribute, license, offer to sell, and sell, rent, lease or lend copies of the intellectual property, and derivative works of the intellectual property; and (c) to sublicense the rights in this Subsection 2(iii) to third parties.

iii. Work made for hire. Any work of Employee for which copyright could be claimed developed in the course of Employee’s employment with Company will be deemed “work made for hire” under federal copyright law and all ownership rights to such work belongs exclusively to Company. To the extent any invention does not qualify as a work for hire under applicable law, and to the extent, any invention is subject to copyright, patent, trade secret, or other proprietary right protection, Employee hereby assigns, and agrees to assign, all rights therein to Company.

iv. Required undertakings . Employee agrees, both while an employee of Company and thereafter, to assist Company and its owners and Affiliates, at Company’s sole expense, in any and all attempts to obtain patents, copyrights, and/or trademarks or other intellectual property protection on any work Employee participated in developing and agrees to execute all documents necessary to obtain such rights in the name of or to transfer such rights to Company. If, because of Employee’s mental or physical incapacity or for any other reason whatsoever, after the Company’s reasonable effort to secure Employee’s signature, Company is unable to secure Employee’s signature to apply for or pursue any patents, copyrights, or other protection for any invention assigned to Company under this Agreement or otherwise, Employee irrevocably designates and appoints Company and its duly authorized officers as Employee’s agent and attorney-in-fact to act for Employee and on Employee’s behalf and stead to file any applications and to do all other lawfully permitted acts to further the prosecution and issuance of any patents, copyrights, or other protections with the same legal force and effect as if executed by Employee.

v. Limited Exclusion . This Section 2 does not apply to any inventions or intellectual property for which no equipment, supplies, facility or Confidential Information of Company was used, and which was developed entirely on Employee’s own time, and (a) which does not relate (i) directly or indirectly to the business of Company or (ii) to Company’s actual or demonstrably anticipated research or development, or (b) which does not result from any work performed by Employee for Company.

3. Non-disparagement

Subject to Section 5, Employee agrees that during and after Employee’s period of employment with Company Employee will not, publicly or privately, disparage or defame Company or its Affiliates, or any of Company’s or its Affiliates’ employees, officers, governors, members or agents.

4.  Injunctive Relief

In the event of a breach or threatened breach of any covenant in Sections 1, 2, or 3, Employee agrees that Company will be irreparably harmed, that money damages alone cannot adequately compensate Company, and that Company shall be entitled to temporary and injunctive relief as well as all applicable remedies at law or in equity available to Company against Employee including if the Company is the prevailing party in an action to enforce the terms of this Agreement, reasonable attorneys’ fees and costs incurred in bringing any action against Employee or otherwise enforcing the terms of this Agreement. Employee further agrees that in any such action, Company shall be entitled to relief without posting any bond or security.

  5.  No Unlawful Restriction  

Employee understands and agrees that nothing in this Agreement or otherwise is intended to or will prevent or interfere with Employee’s ability or right to (a) provide truthful testimony if under subpoena to do so, (b) file any charge with or participate in any investigation or proceeding before the U.S. Equal Employment Opportunity Commission or any other federal, state or local governmental agency, (c) engage in any conduct protected under the National Labor Relations Act, or (d) respond to a subpoena, court order or as otherwise provided by law.

  6.  Miscellaneous

i. At-will employment . Employee’s employment with Company is “at will,” which means it may be terminated at any time and for any or no reason, at the option of either Employee or Company.

ii. Assignment . All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the Parties, except that the duties and responsibilities of Employee under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Employee.

iii. Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

iv. Entire agreement . This Agreement together with the Employment Agreement effective as of [DATE] sets forth the entire agreement of the Parties and supersedes any and all prior agreements and understandings concerning Employee’s employment by Company. This Agreement may be changed only by a written document signed by Employee and an authorized representative of Company.

v. Governing law . This Agreement shall be governed by, and construed and enforced in accordance with, the substantive and procedural laws of the State of Minnesota without regard to rules governing conflicts of law.

vi. Jurisdiction . Employee irrevocably and unconditionally (a) agrees that any legal proceeding arising out of this Agreement shall be brought in a court of general jurisdiction in the State of [JURISDICTION], (b) consents to the non-exclusive jurisdiction of such court in any such proceeding, and (c) waives any objection to the laying of the venue of any such proceeding in any such court. The employee also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers.

vii. Attorneys’ Fees . In the event of any litigation or other proceeding concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this Agreement, the breach thereof or the interpretation hereof, the prevailing party will be entitled to recover from the other party reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment or award rendered therein. The “prevailing party” means the party determined by the court to have most nearly prevailed, even if such party did not prevail in all matters, not necessarily the party in whose favour a judgment is rendered. Further, in the event of any breach by Employee under this Agreement, Employee shall pay all the expenses and reasonable attorneys’ fees incurred by Company in connection with such breach if the Company is the prevailing party.

viii. Counterparts . This Agreement may be executed in any number of counterparts (including facsimile counterparts or counterparts delivered by electronic transmission (e.g., PDF attachment)), each of which shall be an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date first above written.

Employee Name

Company Name

So, now we understand the importance of an employee intellectual property agreement and how it can affect the company if such an agreement is not drafted. This agreement acts as a layer of protection to the company especially a new company in avoiding any future problems. Much care must be given to the intellectual property of an employee. It can either help in the growth or destruction of the company.

• https://www.startupindia.gov.in
• https://www.legawise.com
• https://info.vethanlaw.com
• https://www.businessnewsdaily.com
• https://www.sec.gov

Students of  Lawsikho courses  regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

Follow us on  Instagram  and subscribe to our  YouTube  channel for more amazing legal content.

RELATED ARTICLES MORE FROM AUTHOR

Sakuma exports vs. louis dreyfus commodities suisse s.a., doping in sports : an indian perspective, leveraging ai for legal document parsing and extraction, leave a reply cancel reply.

Save my name, email, and website in this browser for the next time I comment.

How to become a SEBI Law Officer

Crack Grade A officers exam and prepare for Limited Insolvency exam side by side for back-up

Register now

Thank you for registering with us, you made the right choice.

Congratulations! You have successfully registered for the webinar. See you there.

Content Hub

Commercial Templates

Intellectual Property Assignment Agreement

Nov 2, 2022

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another.

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another. The agreement may also be referred to as an intellectual property transfer agreement, an IP assignment agreement or an IP transfer agreement.

When should you use an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement should be used whenever transferring the rights in intellectual property ( IP ). There are a number of situations where you may need to do this. The most common for SMEs is where an individual has done work for a company as a consultant without using a consultancy agreement with the result that the consultant and not the company, owns the IP in the work. It is also necessary to transfer IP where founders create IP before incorporating or being employed by a company and, as a result, title to the IP vests in the founder.  

Why is an Intellectual Property Assignment Agreement important and why should you use it?

Investors in early stage companies will often require the company and key employees to give warranties confirming that the company owns all material IP used by the company. Any IP not owned by the company will need to be transferred to the company before the investment is completed. Failing to transfer the IP can materially impact the valuation of the company or, in extreme cases, lead investors to pull out of the transaction.

It is necessary to use a written agreement for an assignment of certain types of IP (such as copyright) to be effective. Further, it is important to ensure that the agreement is an enforceable contract. For the contract to be enforceable there must be some form of consideration paid in exchange for the IP. The amount of consideration payable will depend on the situation in which the IP is being transferred. If a consultant or founder is transferring IP that should have been owned by the company, the consideration should be a nominal amount, e.g. £1, which is deemed to have been received by the assignor (note that some form of consideration is required for the agreement to be an enforceable contract). The IP can, however, be transferred for valuable consideration or as part of an asset sale.

An IP assignment will also include warranties to confirm that the assignor is the owner of the intellectual property being transferred and that the assignor has the right to transfer the intellectual property. Transferring intellectual property without these assurances means that your company will have limited or no recourse should it transpire that the assignor did not own or have the right to transfer the intellectual property.

What are the common pitfalls of an Intellectual Property Assignment Agreement?

Where possible, it is important to clearly describe the IP being transferred. IP by its nature is not physical so failing to accurately describe the IP can result in disputes about what has been transferred. 

Further, there are several different types of IP (copyright, patents, trade marks and designs). Certain IP rights can also be registered. Depending on what is being transferred it may be necessary to take additional steps to perfect the transfer (for example notifying the appropriate register of the transfer). The agreement should include a requirement that the assignor takes the necessary steps to perfect the transfer and specify which party is required to pay any associated costs (such as registration fees).

In addition where copyright is being transferred, the assignor should also ensure that the assignor waives their moral rights (such as the right to attribution) in respect of the copyrighted work.

Disclaimer: Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

ISO 27001 certified and GDPR compliant. Data encrypted at rest with AES 256 and in transit with TLS 1.2+.

For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, check out our Privacy Policy .

Sep 15, 2022

Oct 3, 2022

• ACC Communities

The Association of Corporate Counsel (ACC) is the world's largest organization serving the professional and business interests of attorneys who practice in the legal departments of corporations, associations, nonprofits and other private-sector organizations around the globe.

Employee Intellectual Property Assignment and Confidential Agreement

You may also be interested in.

This is a sample employee intellectual property assignment and confidentiality agreement, under which an employee, among other covenants, assigns to the company intellectual property such as designs, inventions, improvements, technical information, know-how, technology and suggestions relating in any way to the products or services of the company, which the employee conceives, develops, or contributes to or acquire during the employment period.

Members-only access

Not an acc member.

Table of Contents

Looking for related documents?

Use a template , a traditional raw document with empty fields

Proprietary Information and Inventions Agreement Template

A PIIA agreement is a specific type of IP assignment agreement often used between an employer and employee. This particular template is a raw output of Ontra's PIIA generator built on Gavel.

Or use a legal app to generate custom documents with your information

Proprietary Information and Inventions Agreement

This PIIA agreement generator generates an IP assignment agreement for the terms of an employee's employment with an employer.

Intellectual Property Assignment Agreement: Templates & More

IP assignment agreement in which the ownership rights of intangible creations of the mind (e.g. art, designs, software, trade secrets) are transferred.

Also known as: IP Assignment

Free To Use

Lawyer Backed

Use an Intellectual Property Assignment Agreement legal app

Want us to automatically fill out this template for you? Use this legal app to get guidance and final document you can use in a few minutes. No downloads required.

What is an Intellectual Property Assignment Agreement

Dorna Moini, JD

Founder, Gavel

Dorna Moini is the CEO and founder of Gavel, a no-code platform for building document automation and client-facing web applications for the law. Prior to starting Documate, Dorna was a litigator at Sidley Austin. There, in her pro bono practice, she worked with legal aid organizations to build a web application for domestic violence survivors to complete and file their paperwork, which led to the idea for Documate. Dorna is on the Legal Services Corporation Emerging Leaders Council and a member of LAFLA’s Advisory Board. She was named an ABA Legal Rebel and a Fastcase 50 honoree. She also teaches the Legal Innovations Lab at USC Law School.

Download an Intellectual Property Assignment Agreement template

Intellectual property assignment agreement word document, intellectual property assignment agreement pdf, intellectual property assignment agreement to copy/paste.

Commercial Lease Agreement

A Commercial Lease Agreement is a legally binding contract between a landlord and a tenant for the rental of business property, specifying terms like rent, lease duration, and responsibilities of each party.

Promissory Note

This promissory note template is a legally binding document that outlines the details of a loan, including the repayment schedule, interest rate, and the obligations of the borrower to the lender.

Breach Notification Policy

Dictates how a company will handle and report data breaches

Pro Rata Agreement

Allows an investor to purchase more shares in the company in the future if the company raises further capital

Cookies are small pieces of text sent to your web browser by a website you visit. A cookie file is stored in your web browser and allows us to store things like your user preferences to make your next visit easier and the service more useful to you.

Like many websites, we use first (made by us) and third-party (made by tools we use) cookies for functional purposes, like accessing secure areas of our site, and analytical purposes, like statistical information about how people are using the site so that we can improve it. Users can control the use of cookies at the individual browser level.

Intellectual Property Assignment Agreement Template

Used 5,944 times

An Intellectual Property Assignment Agreement transfers ownership of any IP created by an employee to the employer. Make sure you have your employees sign this document prior to their start.

e-Sign with PandaDoc

Intellectual Property Agreement Template

Prepared by:

​ [Sender.FirstName] [Sender.LastName] [Sender.Company] ​

Prepared for:

​ [Employee.FirstName] [Employee.LastName] ​

​ [Employee.Company] ​

This Intellectual property agreement is entered into on (date) and will be effective from the same date, between [Sender.FirstName] [Sender.LastName] and [Employee.FirstName] [Employee.LastName] (Receiver).

­­As a condition of my employment with the Company, its subsidiaries, affiliates, successors or assigns (hereinafter, the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

This Property Assignment Agreement will have the effect of transferring ownership in anything created by the employee during the period of his/her employment with the company. Intellectual Property Assignment Agreements are also entered into between business entities and even individuals, where one party is looking to sell the rights to its intellectual property in exchange for something of value — usually money.

​In an employer/employee Intellectual Property Assignment Agreement (which is what this agreement is), the employee may want to limit the intellectual property that would otherwise transfer to the employer. For example, the employee may not want to transfer anything conceived or created by him/her on his/her own time, especially if it does not relate to the employer’s business.

1. INVENTIONS RETAINED & LICENSED.

I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which belong to me, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions.

If in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

At the time of joining the company, I was the owner of or held proprietary rights in relation to the intellectual property identified herein and related to the company’s business of (description of business), which Intellectual Property was developed in contemplation of being used, either directly or indirectly, by the Company in connection with carrying on the business of the Company.

2. ASSIGNMENT OF INVENTIONS.

I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my rights, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”), except as provided in “Exception to Assignments” below.

I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.

I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company's sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such invention.

3. REMAINDER OF INTELLECTUAL PROPERTY.

I hereby declare that I have assets, rights or interests that go beyond the scope of this agreement, and are not included as a part of this agreement, either in sum or whole. The benefit of such assets may not be used by [Employee.Company] , unless with my expressly stated written permission.

4. MAINTENANCE OF INVENTIONS RECORDS.

I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.

The records will be available to and remain the sole property of the Company at all times.

5. COSTS AND EXPENSES.

If either party incurs any costs, fees, expenses, etc., both parties will be liable to pay for costs and expenses, in full, unless if otherwise mentioned explicitly in this Agreement, any of the other Ancillary Agreements or any other agreement between parties. If any cost was borne by any person on the instance of completing a task for another person, the person who completed the task shall be reimbursed for the amount spent, as long as they can provide receipts.

6. PATENT & COPYRIGHT REGISTRATIONS.

I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto, in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.

I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Intellectual Property Assignment Agreement.

If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

7. COOPERATION.

I agree to perform all commercially reasonable acts deemed necessary or desirable by the Company to assist the Company, at the Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and titles that come as a part of the Assigned IP. Such acts may include, but are not limited to, execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, trademark, mask work, or other applications for my invention, (ii) in the enforcement of any applicable patents, copyrights, trademark, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Assigned IP.

In the event that the Company is unable, for any reason, to secure my signature(s) to any document required to file, prosecute, register, or memorialize the assignment of any patent, copyright, trademark, mask work or other applications or to enforce any patent, copyright, mask work, moral right, trade secret or other proprietary right under any Assigned IP, I hereby irrevocably designate and appoint the Company and the Company’s duly authorized officers and agents as my agents and attorneys-in-fact to act for and on my behalf and instead of me, (i) to execute, file, prosecute, register and memorialize the assignment of any such application, (ii) to execute and file any documentation required for such enforcement, and (iii) to do all other lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of patents, copyrights, mask works, moral rights, trade secrets or other rights under the Assigned IP, all with the same legal force and effect as if executed by me.

8. RETURNING COMPANY DOCUMENTS.

I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns.

9. REPRESENTATIONS.

I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

10. EQUITABLE REMEDIES.

I AGREE THAT IT WOULD BE IMPOSSIBLE OR INADEQUATE TO MEASURE AND CALCULATE THE COMPANY’S DAMAGES FROM ANY BREACH OF THE COVENANTS SET FORTH HEREIN.

ACCORDINGLY, I AGREE THAT IF I BREACH ANY OF SUCH PROVISIONS, THE COMPANY WILL HAVE AVAILABLE, IN ADDITION TO ANY OTHER RIGHT OR REMEDY AVAILABLE, THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT OF COMPETENT JURISDICTION RESTRAINING SUCH BREACH OR THREATENED BREACH AND TO SPECIFIC PERFORMANCE OF ANY SUCH PROVISION OF THIS AGREEMENT.

I FURTHER AGREE THAT NO BOND OR OTHER SECURITY SHALL BE REQUIRED IN OBTAINING SUCH EQUITABLE RELIEF AND I HEREBY CONSENT TO THE ISSUANCE OF SUCH INJUNCTION AND TO THE ORDERING OF SPECIFIC PERFORMANCE.

11. GOVERNING LAW.

This Agreement will be governed by the laws of the State of [Employee.State] . I hereby expressly consent to the personal jurisdiction of the state and federal courts with jurisdiction in [Employee.Country] [Employee.State] for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

12. ENTIRE AGREEMENT.

This Intellectual Property Assignment Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us.

No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged.

Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

13. SEVERABILITY.

If one or more of the provisions in this Intellectual Property Assignment Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

14. SUCCESSORS & ASSIGNS.

This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

15. DISPUTES AND RESOLUTIONS.

Both parties agree that they will try to amicably settle any disputes amongst themselves, or with the help of a third party such as an agent. In case that they are unable to reach a settlement or do not wish to discuss the terms of the settlement with one another, they may approach a court of law situated in [Sender.Country] , [Sender.State] where applicable laws will come into motion.

AGREED AND ACCEPTED.

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT, I AM SATISFIED THAT I UNDERSTAND IT COMPLETELY, AND I AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.

​ [Sender.Company]

​ [Sender.FirstName] [Sender.LastName] ​

LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP­­­­­­

Care to rate this template?

Your rating will help others.

Thanks for your rate!

Useful resources

• Featured templates
• Sales proposals

Intellectual Property Assignment Agreement: Definition & Sample

Jump to section.

ContractsCounsel has assisted 35 clients with intellectual property assignment agreements and maintains a network of 61 intellectual property lawyers available daily.

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is a contract that transfers the intellectual property rights (For example, patents, trademarks, industrial designs, or copyrights) from the creator to another entity. The intellectual property rights holder may transfer all or part of their rights. The transfer of intellectual property rights is made upon a payment of a lump sum or royalties.

Employees hired for research and development roles or other technical areas sign intellectual property assignment agreements to assign to the company any ideas, work products, or inventions related to the company business that they may create during their employment.

Common Sections in Intellectual Property Assignment Agreements

Below is a list of common sections included in Intellectual Property Assignment Agreements. These sections are linked to the below sample agreement for you to explore.

Intellectual Property Assignment Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.12 3 dex1012.htm FORM OF INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT , Viewed October 24, 2021, View Source on SEC .

Who Helps With Intellectual Property Assignment Agreements?

Lawyers with backgrounds working on intellectual property assignment agreements work with clients to help. Do you need help with an intellectual property assignment agreement?

Post a project  in ContractsCounsel's marketplace to get free bids from lawyers to draft, review, or negotiate intellectual property assignment agreements. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Need help with an Intellectual Property Assignment Agreement?

Meet some of our intellectual property assignment agreement lawyers.

Hi, my name is O.T. and I own The Walker Collective, a law firm that caters to the contractual, intellectual property, and business formation needs of creative entrepreneurs and small business owners. I am licensed to practice in Maryland and New York.

With over ten years of intellectual property experience, I’m happy to work on your contractual matter. I am very diligent and enjoy meeting tight deadlines. Drafting memoranda, business transactional documents, termination notices, demand letters, licenses and letter agreements are all in my wheelhouse! Working in a variety of fields, from construction to pharmaceutical, I enjoy resolving any disputes that come across my desk.

Nicholas M.

Nicholas Matlach is a cybersecurity expert (CISSP) and an attorney who is dedicated to helping small businesses succeed. He is a client-focused professional who has a deep understanding of the challenges that small businesses face in the digital age. He also provides legal counsel to small businesses on a variety of issues, including formation, intellectual property, contracts, and employment law.

At Barker Law, we provide clients with expertise in contract drafting and review, outside general counsel services, negotiation, commercial litigation, and regulatory navigation. We confidently handle transactional and regulatory matters for businesses and individuals. As our feedback shows, we excel at meeting and exceeding our clients needs.

Michelle T.

I am an experienced, well-rounded attorney with a background specializing in trusts and estates, contracts and business law. I have extensive experience working with simple contracts all the way up to multi-million dollar deals.

Having more than ten (10) years of experience in commercial law, I have garnered both relevant in-house and law firm experience. With more than a combined seven (7) years in-house experience, I have gained valuable insight in balancing the business needs with the legal risks and applying the legal skills I have acquired to various fields. I have specific experience with SaaS, vendor contracts, customer contracts, and general marketing agreements. Moreover, my law firm background has taught me to be detail-oriented and to be an effective negotiator in all types of commercial dealings.

I have been practicing law since 2005 and am licensed in the state of Pennsylvania. I started in Pittsburgh, PA and then moved to Williamsport in 2007 where I have practiced family law almost exclusively since. I am the managing partner /owner of Protasio & Jasper, P.C. I have had multiple Pennsylvania Supreme Court family law cases that have changed the law in Pennsylvania. I pride myself on being able to arm clients with information so that they can make informed decisions about their case.

Find the best lawyer for your project

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

Intellectual Property lawyers by top cities

• Austin Intellectual Property Lawyers
• Boston Intellectual Property Lawyers
• Chicago Intellectual Property Lawyers
• Dallas Intellectual Property Lawyers
• Denver Intellectual Property Lawyers
• Houston Intellectual Property Lawyers
• Los Angeles Intellectual Property Lawyers
• New York Intellectual Property Lawyers
• Phoenix Intellectual Property Lawyers
• San Diego Intellectual Property Lawyers
• Tampa Intellectual Property Lawyers

Intellectual Property Assignment Agreement lawyers by city

• Austin Intellectual Property Assignment Agreement Lawyers
• Boston Intellectual Property Assignment Agreement Lawyers
• Chicago Intellectual Property Assignment Agreement Lawyers
• Dallas Intellectual Property Assignment Agreement Lawyers
• Denver Intellectual Property Assignment Agreement Lawyers
• Houston Intellectual Property Assignment Agreement Lawyers
• Los Angeles Intellectual Property Assignment Agreement Lawyers
• New York Intellectual Property Assignment Agreement Lawyers
• Phoenix Intellectual Property Assignment Agreement Lawyers
• San Diego Intellectual Property Assignment Agreement Lawyers
• Tampa Intellectual Property Assignment Agreement Lawyers

ContractsCounsel User

Licensing Agreement for Physical Therapy Code

Location: montana, turnaround: less than a week, service: drafting, doc type: ip assignment agreement, number of bids: 2, bid range: $350 - $500, image licensing agreement, location: michigan, turnaround: a week, service: contract review, page count: 8, number of bids: 4, bid range: $250 - $700, want to speak to someone.

Get in touch below and we will schedule a time to connect!

Find lawyers and attorneys by city

• 617.395.7000
• Artificial Intelligence
• Chemical & Material Sciences
• Computer Technology & Software
• Consumer Products
• Electronics
• Life Sciences
• Mechanical & Industrial
• Medical Devices

Practice Areas

• Strategic Counseling
• Licensing & Transactions
• Trade Secret
• News & Events
• Knowledge Center
• Entrepreneurship Center
• Diversity, Equity, and Inclusion
• Client Portal

T: 617.395.7000

E:  [email protected]

D. Mass. IP Litigation Blog

• Knowledge Center :
•   IP Insights

Patent Assignments in Employment Agreements – a Sometimes Overlooked, but Always Important Component

• November 16, 2021

By: Peter C. Lando and Thomas P. McNulty

With assistance from summer intern Tyler Gruttadauria

Businesses, of course, have a strong interest in owning intellectual property created by their employees. Intellectual property—patents, copyrights, and other confidential and proprietary information including trade secrets—is often the most valuable asset a business can own, so it is important to ensure that employee developments and inventions belong to the employer. In the United States, inventions presumptively belong to the inventor, and any transfer of ownership (“assignment”) must be in writing to be effective. Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in intellectual property created by an employee. Employers often provide employment agreements with assignment clauses that are intended to give the employer rights in inventions made by the employee during the period of employment. These assignment clauses are often treated as mere boilerplate, yet the precise wording of these clauses can have major impacts on the effectiveness and limitations of any assignment.

Ensure that you have an Assignment and not a mere promise to assign

When drafting an agreement to have an employee assign future inventions, it is vital that the language used in an assignment clause states a present-tense, actual assignment. Phrases such as “hereby assign,” “agrees to grant and does hereby grant,” or that inventions “shall belong” to the employer and employee “hereby conveys, transfers and assigns” have been deemed by the courts to be effective to transfer ownership of a future invention without the need for any subsequent agreement. Ownership effectively transfers immediately, once the invention has been made. Assignment clauses that use future tense language, on the other hand, generally will require an additional agreement to result in a transfer of ownership of the invention, and any intellectual property (“IP”) covering the invention. Terms such as “will assign,” “agree to assign,” “will be assigned,” and the like, have been found by numerous courts to constitute nothing more than a promise or contract to assign an invention in the future, but not to serve as an actual assignment.

In addition to the wording used in the assignment clause, the language of any carve-outs should also be scrutinized. Agreements may contain a carve-out clause to exclude a new employee’s prior inventions from being assigned, or to prevent assignment of inventions unrelated to the employee’s work from being swept into the assignment provision. A broad, non-specific carve-out clause may prevent an employee agreement from automatically assigning inventions of that employee, even where the assignment clause includes the proper “hereby assign” type of language, because this leaves open the possibility that an invention is not subject to the assignment clause. This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are governed by Federal Circuit law, resolution of contractual ambiguities is governed by state law, which varies considerably regarding the admissibility of such extrinsic evidence.

Failure to obtain an automatic assignment can have negative consequences

An assignment clause that is deemed ineffective to automatically transfer ownership of an invention can create significant problems for an employer. In such circumstances, a business would not have standing to bring a patent infringement suit until it has taken the necessary steps to obtain a valid assignment. This may require the filing of a breach of contract claim against the employee to require fulfillment of the contractual obligations, including execution of assignment documents. In the interim, infringers could continue practicing the invention; and if the infringing activity has gone on long enough, the six-year statute of limitations may prohibit full recovery of damages. Further, if an inventor/employee has made only a promise to assign, and instead transfers ownership to a third party who lacks knowledge of the assignment obligation, that second transfer of ownership may well prevail, leaving the original employer with no exclusionary rights at all.

Ineffective assignment provisions can affect more than just litigation. Businesses and investors typically conduct IP due diligence when entering into transactions involving the investment in or sale of IP assets, company divisions or entire entities, and any weaknesses in assignment provisions may affect the perceived value of the IP assets and/or business being considered.

Do not count on the “Hired-to-Invent” doctrine to result in ownership of employee inventions

Some employers do not require employees to sign an agreement containing an assignment of inventions because they believe that they automatically own inventions that they paid someone to create. Under the “hired-to-invent” doctrine, this will only occasionally be correct. Employees or contractors hired (and paid) specifically to create a particular invention or to solve a particular problem may be deemed to have implicitly assigned their rights in the invention to the employer. This is a highly fact-based determination, however, and applies only to inventions created in response to the specific thing the employee was hired to do. A mere title of “researcher” or even “inventor” will not, standing alone, suffice to ensure ownership of inventions by the employer. Further, until a court has ruled one way or the other, an employer relying on this doctrine will not have any certainty in its rights to the invention. Should the court rule against the employer, it would lose the exclusionary rights it believed it possessed and may face an infringement lawsuit from the employee or anyone to whom the employee may have assigned the invention/patent rights.

Absent an effective assignment, an employer may obtain limited “shop rights” in inventions made using the employer’s time, materials, facilities or equipment. Shop rights take the form of an implied license to practice the invention, precluding the employee from obtaining damages or injunctive relief on a patented invention. Shop rights are limited, however, and do not allow the employer to prevent others from competing by practicing the invention. Further, shop rights cannot be transferred via license or assignment, effectively devaluing the IP assets and, perhaps, the company.

Other Considerations

In addition to having the proper “hereby assign” language, employment contracts should ensure that inventions , rather than just patents or patent applications, are subject to the assignment clause. Language stating that all inventions, improvements, discoveries, and the like, whether or not patentable or copyrightable, are subject to the assignment, ensures that information that could be protected through other regimes, such as trade secrets, automatically become the property of the employer.

Intellectual property has taken on an ever-increasing role in determining the value of a business. A company’s ability to develop and protect its intellectual property is a key factor in its future success. Given this, it is important that businesses recognize that assignment provisions of employment agreements are not mere boilerplate, but instead may be one of the most important legal provisions that ultimately can impact not only an employment arrangement, but the value of the business itself.

• Peter C. Lando
• Thomas P. McNulty

Professionals

SHARE THIS POST

How can we help you?

• Legal GPS for Business
• All Contracts
• Member-Managed Operating Agreement
• Manager-Managed Operating Agreement
• S Corp LLC Operating Agreement
• Multi-Member LLC Operating Agreement
• Multi-Member LLC Operating Agreement (S Corp)

Intellectual Property Assignment Agreement: A Comprehensive Guide for Your Business

LegalGPS : July 25, 2024 at 10:30 AM

Hello there, entrepreneur friend! Today let’s have that coffee chat about Intellectual Property Assignment Agreements. If you're thinking "what's that?" or "why do I need it?" then this is the perfect starting point for you. In today's competitive business world, protecting your intellectual property (IP) is more crucial than ever.

Intellectual Property Assignment Agreement Template

Legal GPS templates are drafted by top startup attorneys and fully customizable.

Table of Contents

Defining the purpose.

• Clarity of Transfer
• Definition of Transferred Intellectual Property
• Compensation and Payment Terms
• Warranties and Representations
• Confidentiality Agreements
• Governing Law and Dispute Resolution

Step 1 - Identify the Parties Involved

Step 2 - specify the assigned intellectual property, step 3 - describe the transfer of rights, step 4 - detail compensation and payment terms, step 5 - include confidentiality clauses, step 6 - determine governing law and dispute resolution process, tips for avoiding common mistakes and pitfalls.

What is An Intellectual Property Assignment Agreement?

An Intellectual Property Assignment Agreement is a legal document that ensures the transfer of an inventor or creator's rights to another person or company. Essentially, it’s a legal way of saying "what’s mine is now yours". These agreements are often used in situations involving startups, company buyouts, or employees creating new works or inventions during their jobs - situations a lot of entrepreneurs find themselves in.

Let's break that down a touch more:

The IP assignment agreement's primary purpose is to help your business prevent future disputes regarding IP ownership. When all parties are clear on who owns the intellectual property, it prevents a whole host of potential issues.

Believe me, the last thing you need or want as an entrepreneur is a legal dispute over who owns an idea, an invention, or any creative output.

And that's where this agreement steps in: it provides legal proof that the ownership has been transferred. So, if ever challenged, you can show the agreement and say "See, it’s mine!" .

Legal GPS Subscription

Protect your business with our complete legal subscription service, designed by top startup attorneys.

• ✅ Complete Legal Toolkit
• ✅ 100+ Editable Contracts
• ✅ Affordable Legal Guidance
• ✅ Custom Legal Status Report

Key Elements to Consider for a Properly Drafted Agreement

When it comes to IP assignment agreements, not just any generic contract will do. It's crucial to understand and include some key elements to ensure you're fully protected.

1. Clarity of Transfer

The agreement must clearly define the scope and extent of the transferred rights. To do this, use precise language that leaves no room for confusion. For example, specify whether the IP rights being transferred are exclusive or non-exclusive and if there are any limitations on how the Assignee can use or sublicense the IP. Here's a suggested format:

"The Assignor hereby assigns to the Assignee, its successors and assigns, [exclusive/non-exclusive] rights, title, and interest in and to the Intellectual Property, subject to the following limitations [if any]:"

2. Definition of Transferred Intellectual Property

This section is where you identify the specific Intellectual Property being assigned. Start by describing the IP type (e.g., copyright, patent, trademark), then provide the necessary details:

For a copyright, include the work title and a brief description.

For a patent, mention the patent number and summarize the invention.

For a trademark, provide the trademark name, registration number, and design details.

Remember, the key is to be as detailed and transparent as possible.

3. Compensation and Payment Terms

Just as with any deal, it's important to be crystal clear about the compensation for transferring IP rights. Make sure you consider the following in your agreement:

The total amount payable

The currency

The payment method (e.g., check, wire transfer)

The payment schedule (e.g., lump-sum, installments)

For example: "In consideration for the assignment of rights, the Assignee shall pay the Assignor a total sum of [Amount] in [Currency], through [Payment Method], payable as follows:"

4. Warranties and Representations

Including warranties and representations in the agreement helps provide confidence to both parties. The Assignor should explicitly declare that they:

Are the sole and true owner of the IP

Have the complete right to assign the IP to the Assignee

The IP does not infringe on any third-party rights

A sample clause might look like this:

"The Assignor warrants and represents that they are the true and lawful owner of the Intellectual Property, have full right and authority to enter into this Agreement, and that the Intellectual Property does not infringe upon any third-party rights."

5. Confidentiality Agreements

A crucial aspect of a well-drafted IP Assignment Agreement is protecting sensitive information about the business and the IP itself. Incorporate confidentiality clauses to maintain a secure environment.

Try a clause similar to this one: "The parties agree to treat all confidential information related to this Agreement as strictly confidential, and to take all necessary precautions to prevent unauthorized disclosure or use of such information."

6. Governing Law and Dispute Resolution

Last but not least, outline which jurisdiction's laws will govern the agreement. Furthermore, state how any disputes will be resolved, such as through arbitration, mediation, or litigation.

A model clause could be: "This Agreement shall be governed by the laws of the State of [State]. Any dispute arising out of or in connection with this Agreement shall be resolved by [method of dispute resolution]."

Drafting Your IP Assignment Agreement

Let's move on to the most crucial part of our discussion: Creating your Intellectual Property Assignment Agreement. This section intends to make it much clearer and more action-oriented. Your aim? To walk away with enough information to begin drafting your agreement. Let's dive in.

Start by clearly naming the parties involved in the agreement.

Who is the 'Assignor' (the party transferring the rights)?

Who is the 'Assignee' (the individual or business entity receiving the rights)? Clearly outline their legal names and any other relevant identifying information, like addresses or official business names. It would typically look like this: "[Full Legal Name], referred to as the "Assignor," and [Full Legal Name], referred to as the "Assignee."

Here, you need to provide a full and exhaustive description of the intellectual property being transferred. Please don't leave room for vagueness or ambiguity - the more specific, the better. For instance, if it's a patent, include the patent number and a detailed summary of what the patent covers. If it's a copyrighted work, offer the title, the form of the work (e.g., a book, software, music), and a short description of it.

Your entry here might read: "The "Intellectual Property" includes, but is not limited to, [detailed description]."

Get Your Intellectual Property Assignment Agreement Template with a Legal GPS Subscription

This section is all about clearly laying out what you're giving up and what you're gaining. Highlight all rights, titles, and interests being assigned from the Assignor to the Assignee. You could list them out just to ensure nothing falls between the cracks.

It’s vital to be as clear and detailed as possible here. You're specifying the extent of the rights transferred. It could be exclusive, non-exclusive, permanent, temporary, how it can be used, if it can be sold, and more.

Here's an example:

"The Assignor hereby assigns to the Assignee, its successors and assigns, all rights, title, and interest in and to the Intellectual Property, including, without limitation, the right to sue and recover for past, present, and future violations."

Now, let's talk about money. In this step, you need to fully detail the financial exchanges. Include the amount of payment, payment format, and schedule (upfront, lump sum, installments). It wouldn't hurt to clearly lay out what conditions, if any, would lead to a return of the compensation.

This clause might look something like:

"For the assignment of rights under this Agreement, the Assignee shall provide compensation to the Assignor in the amount of [Amount], payable [insert payment method and schedule]".

Especially with IP, you'll want to build in some safety nets. You can include a confidentiality clause that prevents the involved parties from disclosing sensitive information about the IP.

A basic confidentiality clause may read: "The Assignor agrees to keep confidential all non-public information that the Assignee designates as being confidential, not to disclose it to any other people, and not to use it for any purpose other than the discharge of the Assignor's obligations under this Agreement."

Finally, specify which state or country's laws will govern the agreement. This is crucial in the case of any future legal disputes. Additionally, include how disputes over the agreement will be resolved - arbitration, mediation, litigation, etc.

Here is an example:

"This Agreement will be governed by and construed in accordance with the laws of the State of [State]. Any disputes under this Agreement shall be resolved by [method of dispute resolution]."

You're now equipped with all you need to draft an agreement. But before you get started, here are some quick tips to avoid any missteps:

Ensure the agreement is detailed and described correctly

Work with a knowledgeable attorney

Review the final agreement carefully before signing

With these, you're set to protect your business's most valuable assets!

In today's competitive business environment, it's imperative to protect your inventions, your creations - your Intellectual Property. If you're still unsure where to start, check out our professional template for Intellectual Property Assignments!

With an Intellectual Property Assignment Agreement in hand, you're ensuring that ownership of these is well established to prevent future disputes.

Get Legal GPS's Intellectual Property Assignment Agreement Template Now

Secure Your Company's IP with a Confidentiality and Intellectual Property Assignment Agreement: The Essential Guide

As an entrepreneur, one of your most valuable assets is your company's intellectual property (IP). From trade secrets and customer lists to patented...

Step-by-Step Guide to Create a Service Agreement Template

When running a business, there's a good chance you'll need to enter into contracts with service providers, contractors, or consultants. In these...

Mastering the Creative Services Agreement: A Comprehensive Guide

As an entrepreneur, collaborating with creative professionals is an inevitable part of growing your business. Whether you're working with graphic...

Imagine That IP Law Blog

Benjamin Franklin is credited with coining the axiom that "an ounce of prevention is worth a pound of cure." Allegedly, Franklin actually made the statement in connection with fire safety, which was an avocation for him. Today, the axiom applies perfectly to corporate efforts to manage intellectual property (IP) issues. Many companies rely on old proprietary rights forms or use generic forms collected by the human resource department (HR) with little thought given to downstream consequences.

This article advocates for having in-house or retained counsel make periodic reviews of corporate employment agreements and for having counsel involved in any new hire where there is strong likelihood that the position will lead to the creation of IP. Furthermore, interviewing a potential new hire with prior IP experience for a position that is expected to generate IP should receive special attention in order to avoid conflicts with a prior employer and any prior agreement concerning IP.

The IP provisions in employment agreements frequently include a holdover or surviving provision that obligates the departing employee to assign post-employment inventions that have a tangential relationship to the employer's business back to the employer. These provisions present several problems.

For the new employer, this information should be gathered before hiring the potential employee in order to evaluate the possibility of a conflict with a prior employer and determine if a prior agreement creates any limitation on the potential employer's ability to engage in the work of the proposed position. In requesting this information, it is important to have the potential employee identify all prior inventions, whether or not patented and/or assigned to another company or previous employer. If the individual is hired, this information should be documented in the new employment agreement.

For the prior employer, the issue turns on whether the provision surviving the prior employment is reasonable and enforceable. Many jurisdictions view a surviving assignment provision as a post-employment restriction and analyze them in a manner similar to the approach taken with non-compete agreements. Namely, courts consider whether the time and scope of the agreement provisions are reasonable and whether the provisions unduly hinder the employee's ability to work and use acquired skills.

The Supreme Court of New Jersey in Ingersoll-Rand v. Ciavatta, 542 A.2d 879 (N.J. 1988) provided  a helpful overview of the issues with assignment provisions from prior employment agreements that survive the previous employment. In  Ingersoll-Rand, the Supreme Court of New Jersey included the following instructive footnote:

"As an aid to employer's drafting future holdover agreements, we emphasize the following language of Paragraph 1(c) [Ingersoll-Rand agreement] that applies the agreement to 'inventions, copyrights and/or designs ... if conceived as a result of and is attributable to work done during such employment and  relates to a method, substance, machine, article of manufacture or improvements therein within the scope of the business of the company or any of its affiliates.'" Ingersoll-Rand has 30 divisions worldwide, so arguably the clause could apply to activities outside the scope of Ciavatta's employment but within the scope of any of those numerous divisions. We caution employers that such language appears to be overly broad, and, hence, would be unenforceable."

The above caution is something that a new employer should keep in mind when evaluating a potential employee's prior agreement. Note how the risk is allocated based on the reasonableness of the provision, and a new employer's possible defense in hiring the employee. If the provision appears to be reasonable on its face, could enforcement of the provision hinder the employee in the proposed position? If the provision does not seem reasonable, is the potential hire important enough that the new employer is willing to litigate the issue?

Having cleared the pre-employment hurdles, an employment agreement should consider and specifically address anticipated IP-related issues. In the words of Franklin, a solid agreement is the recommended "ounce of prevention."

Consider the case of  Aetna-Standard Engineering v. Rowland, 493 A.2d 1375 (Pa. Super. Ct. 1985) . In that case, a designer was hired and was subsequently tasked with improving a given machine and, along with his supervisor, was successful. The parties did not have any agreement regarding ownership or assignment of the invention in place. The employer attempted to force the employee to assign the patent, but was rejected by a lower court and affirmed on appeal.

In  Aetna-Standard, the inventor had training and engineering experience when he was hired, but he maintained that he had no contract or obligation, written or oral, requiring assignment of any invention to Aetna. He refused to assign his invention. When he was given a specific task that resulted in the invention for which a patent was filed, he received no additional compensation and was only instructed to develop equipment for an Aetna project contract with a third party. Ultimately, in the absence of an agreement, Rowland did not have to assign the patent to Aetna and retained his co-inventor rights. However, since Rowland's supervisor was a co-inventor who had assigned his interest to Aetna, Aetna was at least a co-owner of the patent with Rowland and each was free to use the patent without any obligation to the other. Aetna ultimately received an expensive "pound of cure."

In 2011, the Supreme Court, in  Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, 563 U.S. 776 (2011) , reiterated the long and well-established principles that the rights to an invention belong to the inventor and absent an express grant of those rights to the employer, the employer does not have rights in the invention. The principle relied upon dates back to a Supreme Court case,  United States v. Dubilier Condenser, 289 U.S. 178 (1933) .

When considering whether an employee has a duty to assign inventions to their employer, courts also consider the inventor-employee's refusal to sign employment agreement documents with IP assignment provisions. The failure to address the issue can be fatal to a later effort to force an assignment under another theory of ownership. See Banks v. Unisys, 228 F.3d 1357 (Fed. Cir. 2000) . Stated in different terms, "if the scope of an employee's work is generalized within a field, a court will not presume an employee's duty to assign his employer patents, absent a contract.  Peregrine Semiconductor v. RF Micro Devices, No. 3:12-CV-0911-H (S.D. Cal. Jan. 8, 2014). In that case, Peregrine was denied a preliminary injunction because it had no contract assigning employee inventions to the company, and could not show that the inventor was bound under the "hired-to-invent" doctrine. The "hired-to-invent" doctrine is an equitable one that generally states that if an employee is hired to design and develop new instrumentalities in order to solve a particular problem, the employer has an equitable right to practice the inventions devised by the employee in solving that problem; see also  Standard Parts  v. Peck, 264 U.S. 52, 59-60 (1924). The "hired-to-invent" doctrine does not, however, transfer legal title to a patent. An agreement transferring all rights in the invention to the employer is always preferred.

The language of an IP assignment provision included with an employment agreement is critical. Assignment provisions that have express, nonconditional language are likely to be enforced. Future, contingent provisions are problematic. Accordingly, there is a significant difference between " I will assign" and invention, and " I do hereby assign" the invention.

This was demonstrated in the case of  DDB Technologies v. MLB Advanced Media, 517 F.3d 1284 (Fed. Cir. 2008) . The  DDB case involved a surviving IP provision in an agreement that included the following language: "Employee shall promptly furnish to company a complete record of any and all technological ideas, inventions and improvements, whether patentable or not, which he, solely or jointly, may conceive, make or first disclose during the period of his employment with [Schlumberger]. Employee agrees to and  does hereby grant and assign to Company or its nominee his entire right, title and interest in and to ideas, inventions and improvements coming within the scope of Paragraph 3:" The court followed the general rule that when the employment agreement expressly grants rights in future inventions to the employer, no further act is required once an invention comes into being, and the transfer of title occurs by operation of law.

In contrast, as noted in  Stanford University v. Roche Molecular Systems,  583 F.3d 832, 842 (Fed. Cir. 2009) , an agreement to assign an invention in the future (" I will assign") has been interpreted by the U.S. Court of Appeals for the Federal Circuit as conveying mere equitable title. As a mere promise to assign rights in the future, such language requires a subsequent assignment to transfer legal title.

Thus, IP agreement language that creates a promise to assign future IP does not readily resolve the ownership issue. In  IpVenture v. Prostar Computer, 503 F.3d 1324 (Fed. Cir. 2007) , the Federal Circuit considered the following language: "Such Proprietary Developments are the sole property of HP, and I agree: a. to disclose them promptly to HP; b.  to assign them to HP; and c. to execute all documents and cooperate with HP in all necessary activities to obtain patent, copyright, mask work, and/or trade secret protection in all countries, HP to pay the expenses." The Federal Circuit concluded that it was only an agreement to assign at a later date, rather than a present assignment. Accordingly, the agreement language required a subsequent written instrument to vest title in the employer. In the recent case of  Advanced Video Technologies v. HTC,  879 F.3d 1314 (Fed. Cir. 2018) , the Federal Circuit again held that employment agreement assignment language using the terms " will assign" is a mere promise to assign, and it is not a present assignment transferring title by operation of law.

The primary takeaways for employers are as follows: when hiring someone that might generate IP, be sure to research all prior agreements and work experience that could impact the potential employee's duty and/or ability to assign inventions to either the prior employer or potential new employer; and make sure that company employment agreements include  language that presently assigns IP by operation of law; and, even if corporate documents have acceptable present assignment language, obtain separate signed assignment agreements, prepared for recordation, for each invention. Separate assignment documents are straight forward and can be recorded with the U.S. Patent and Trademark Office without concern for private company information that might be in an employment agreement.

As the cited cases clearly demonstrate, the attention paid to these issues ahead of time is more than " an ounce of prevention."

Reprinted with permission from the March 30, 2018 issue of The Legal Intelligencer ©2020 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

Tony draws on his years of in-house and private practice experience to analyze his client's business model and objectives and craft a strategy to achieve the client's goals.

With more than 40 years of experience in all aspects of IP ...

Michael’s natural and engaging approach in laying out alternatives and potential outcomes is genuinely appreciated by clients. He advances their causes with all-encompassing intellectual property portfolio management ...

Recent Posts

• The Risks and Rewards of Using Open Source Software
• Don't Let Your Trade Secrets Walk Out the Door With Your Employees: Patent Them!
• Federal Circuit’s New Test For Design Patent Obviousness Will Change Everything
• Why You Need An AI Policy Now To Protect Your Organization Against IP Infringement Claims
• Trademark Basics and How to Spot Potential Issues for In-House Counsel
• My Co-inventor Never Sleeps
• Strategies for Conditional Claiming in Method Claims: Finding the Patentable Weight
• You’re not my Pal, World
• A Court Cannot Balance That Which It Does Not Weigh
• What Online Sellers and Brand Owners Need to Know about “Schedule A” Litigation
• February 2024
• January 2024
• December 2023
• November 2023
• October 2023
• September 2023
• August 2023
• February 2023
• January 2023
• October 2022
• August 2022
• February 2022
• January 2022
• December 2021
• November 2021
• October 2021
• September 2021
• August 2021
• February 2021
• January 2021
• December 2020
• November 2020
• October 2020
• August 2020
• February 2020
• January 2020
• November 2019
• October 2019
• September 2019
• February 2019
• January 2019
• October 2018
• February 2018
• January 2018
• December 2017
• November 2017
• October 2017
• August 2017
• February 2017
• January 2017

By using this site, you agree to our updated Privacy Policy & Disclaimer .

What are IP Assignment Agreements?

For the high-growth startups we represent (and into which our venture capital clients invest), intellectual property (IP) is typically the core asset driving the company’s value. Ensuring that the company’s IP is properly owned and protected can therefore be the difference between success and failure. It is somewhat surprising then, how often founders fail to ensure that their companies do, in fact, own this critical property. Founders who eschew legal representation in favor of low-cost, automated options tend to fall into this trap most often. Most automated or semi-automated providers of startup legal documentation fail to provide even a basic IP assignment and confidentiality agreement—an essential document that all company personnel (founders included) must sign to ensure that IP is both validly assigned to the Company and protected from disclosure. When used with employees and consultants, IP assignment and confidentiality clauses are typically bundled into a single contract, often called a “Proprietary Information and Inventions Assignment Agreement” or a “Confidential Information and Inventions Assignment Agreement” (though there are many names that can be used here).

What are IP assignment agreements?

IP assignment agreements are contracts between a business and its personnel that transfer ownership of IP created by the personnel during their employment or engagement with the business. IP can include patents, trademarks, copyrights, and trade secrets. The agreement ensures that the business retains ownership of any IP created by the personnel, even after they leave the business. Even if your personnel are not involved in creating IP, it’s advisable to have these agreements in place—you never know where the next great idea might come from, and in any case, it’s easier to get this agreement signed than it is to explain to an investor or acquirer why you didn’t. Without an IP assignment agreement, personnel may be able to claim personal ownership of the IP they created, which can be deadly to a business that relies on IP for its value. If you are missing these agreements, investors and acquirers will notice and it can cause your financing or acquisition to fall through, particularly if the personnel who failed to sign have left or are otherwise unwilling to sign.

What are confidentiality agreements?

Confidentiality agreements, also known as non-disclosure agreements (NDAs), are contracts between a business and its personnel that prevent the personnel from disclosing confidential information about the business. Confidential information can include trade secrets, customer information, financial information, and any other information that is not publicly available. Most founders innately understand the importance of maintaining confidentiality, so rarely fail to have an NDA in place with individuals to whom they provide sensitive information. It should be noted, though, that having confidentiality agreements with your employees and consultants has become particularly important in recent years, as states and the federal government have sought to restrict the use of noncompetition agreements. Having a strong confidentiality agreement can be the key to ensuring that your ex-employees don’t take valuable information to your competitors.

While confidentiality obligations are self-explanatory and a “must-have”, you must also remember that an NDA does not necessarily include an IP assignment agreement. NDAs, particularly those provided by automated/semi-automated document providers, are often designed for use solely during preliminary conversations with potential commercial or collaboration partners. In that context, NDAs do not (and likely should not) have any clauses providing for the transfer of IP ownership. It is therefore critical that you do not simply ask your employees and contractors to sign a “standard” NDA—yes, that agreement will likely prevent those folks from sharing your sensitive information, but if you’re paying them to create IP for you, you’ll also want language that ensures that your company actually owns the work product they create.

Please remember, have your personnel (employees, contractors and even advisers) sign an IP assignment and confidentiality agreement, ideally on the day that individual first starts working for you. File that agreement away somewhere safe (ideally with your lawyer). These agreements ensure that the business retains ownership of its IP and that confidential information is kept secret. If you need help drafting IP assignment and confidentiality agreements, consult with a qualified attorney with experience in representing high-growth startups (believe it or not, there’s “magic language” needed to ensure these agreements work properly, and even a Supreme Court case about it).

This intellectual property agreement  is between , an individual a(n) (the " Assignor ") and  , an individual a(n) (the " Assignee ").

The Assignor has full interest in the intellectual property listed in Exhibit A and described in section 1 below.

The Assignor wishes to transfer to the Assignee, and the Assignee wishes to purchase and receive from the Assignor, all of its interest in the Intellectual Property.

The parties therefore agree as follows:

1. ASSIGNMENT OF INTELLECTUAL PROPERTY.

The Assignor assigns to the Assignee, and the Assignee accepts the assignment of, all of the Assignor's interest in the following in the United States and its territories and throughout the world:

• (a) the intellectual property rights related to the intellectual property listed in Exhibit A ;
• (b) all precursors, portions, and works in progress with respect to that intellectual property and all inventions, works of authorship, mask works, technology, information, know-how, materials, and tools relating to those or to the development, support, or maintenance of those;
• (c) all copyrights, patent rights, trade dress, trade names, business names, other indicia of origin, trade secret rights, trademark rights, mask works rights, and all other intellectual property rights and all business, contract rights, and goodwill in, incorporated, or embodied in, used to develop, or related to any of those; and
• (d) the registrations and applications for registrations of the foregoing (collectively, the" Intellectual Property ").

2. PURCHASE PRICE.

The Assignee shall pay the Assignor a flat fee of $ as full payment for all rights granted under this agreement. The Assignee shall complete this payment no later than .

3. RECORDATION.  

In order to record this assignment with all relevant government agencies, within hours of the effective date of this assignment, the parties shall sign the form of intellectual property assignment agreement attached as Exhibit B . The is solely responsible for filing the assignment and paying any associated fees of the transfer.

4. NO EARLY ASSIGNMENT.

The Assignee shall not assign or otherwise encumber its interest in the Intellectual Property or any associated registrations until it has paid to the Assignor the full consideration provided for in this assignment. Any assignment or encumbrance contrary to this provision shall be void.

5. ASSIGNOR'S REPRESENTATIONS.

The Assignor hereby represents and warrants to the Assignee that it:

• (a) is the sole owner of all interest in the Intellectual Property;
• (b) has not transferred, exclusively licensed, or encumbered any Intellectual Property or agreed to do so;
• (c) is not aware of any violation, infringement, or misappropriation of any third party's rights (or any claim of those) by the Intellectual Property;
• (d) is not aware of any third-party consents, assignments, or licenses that are necessary to perform under this assignment;
• (e) was not acting within the scope of employment of any third party when conceiving, creating, or otherwise performing any activity with respect to any item of Intellectual Property.

The Assignor shall immediately notify the Assignee in writing if any facts or circumstances arise that would make any of the representations in this assignment inaccurate.

6. INDEMNIFICATION. The Assignor shall indemnify the Assignee against:

• (a) any claim by a third party that the Intellectual Property or its use, manufacture, sale, distribution, or reproduction infringes on or misappropriates any copyrights, trade secrets, patents, or other intellectual property;
• (b) any claim by a third party that this assignment conflicts with, violates, or breaches any contract, assignment, license, sublicense, security interest, encumbrance, or other obligation to which the Assignor is a party or of which it has knowledge;
• (c) any claim relating to any past, present, or future use, licensing, sublicensing, distribution, marketing, disclosure, or commercialization of any of the Intellectual Property by the Assignor; and
• (i) the Assignee promptly notifies the Assignor of that claim;
• (ii) the Assignor controls the defense and settlement of that claim;
• (iii) the Assignee fully cooperates with the Assignor in connection with its defense and settlement of that claim; and
• (iv) the Assignee stops all sales, distribution, and public use of the infringing Intellectual Property, if requested by the Assignor.
• (i) obtain the right for the Assignee to continue to use the infringing Intellectual Property;
• (ii) modify the infringing Intellectual Property to eliminate the infringement;
• (iii) provide substitute noninfringing intellectual property to the Assignee pursuant to this assignment; or
• (iv) refund to the Assignee the amount paid under this assignment for the infringing Intellectual Property.
• (c) No Other Obligations. The Assignor shall have no other obligations or liability if infringement occurs, and shall have no other obligation of indemnification or to defend relating to infringement. The Assignor shall not be liable for any costs or expenses incurred without its prior written authorization and shall have no obligation of indemnification or any liability if the infringement is based on (i) any modified form of the Intellectual Property not made by the Assignor, (ii) any finding or ruling after the effective date of this assignment, or (iii) the laws of any country other than the United States of America or its states.

7. GOVERNING LAW.

• (a) Choice of Law. The laws of the state of  govern this agreement (without giving effect to its conflicts of law principles).
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .

8. AMENDMENTS.

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

9. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. Neither party may assign any of its rights under this assignment, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. Neither party may delegate any performance under this assignment, except with the prior written consent of the other party.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.

10. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this assignment in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This assignment, agreements ancillary to this assignment, and related documents entered into in connection with this assignment are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

11. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

12. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Assignor: 

• If to the Assignee: 
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

13. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

14. ENTIRE AGREEMENT.

This assignment constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this assignment. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this assignment are expressly merged into and superseded by this assignment. The provisions of this assignment may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this assignment by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this assignment. Except as set forth expressly in this assignment, there are no conditions precedent to this assignment's effectiveness.

15. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this assignment's construction or interpretation.

16. EFFECTIVENESS.

This assignment will become effective when all parties have signed it. The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

17. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to betaken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature. 

[PAGE BREAK HERE] EXHIBIT A LIST OF INTELLECTUAL PROPERTY

[PAGE BREAK HERE] EXHIBIT B FORM OF RECORDABLE INTELLECTUAL PROPERTY ASSIGNMENT For good and valuable consideration, the receipt of which is hereby acknowledged, an individual a(n) (the " Assignor ") hereby assigns to an individual a(n) (the " Assignee ") all of the Assignor's interest in the Intellectual Property identified in Attachment A to this assignment, and the Assignee accepts this assignment.

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

ATTACHMENT A INTELLECTUAL PROPERTY

Free Intellectual Property Assignment Agreement Template

How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Intellectual property assignment agreement: How-to guide

In the dynamic realm of commerce and innovation, the notion of property extends far beyond physical boundaries. Just as one might transfer ownership of a house or a car, the exchange of intellectual property (IP) rights is a critical component of modern business transactions. For instance, if you're launching a startup, acquiring product rights, or even purchasing an entire company, in each scenario, the seamless transfer of intellectual property ownership is essential for ensuring a smooth transition and protecting your interests.

So what constitutes intellectual property? Intellectual property encompasses creations of the mind, such as inventions, software, and hardware programs, literary and artistic works, designs, symbols, names, and images. As businesses grow and evolve, the need to manage and protect these valuable assets becomes increasingly important. One crucial aspect of managing intellectual property is through intellectual property assignment agreement, otherwise known as IP assignment agreement. These agreements facilitate the transfer of IP rights from one part to another.

In this article, we’ll explore the nuances of intellectual property assignment agreements, including their definitions, benefits, types, and considerations.

What is an intellectual property assignment agreement?

An intellectual property assignment agreement, also known as an IP assignment agreement, is a written contract that transfers intellectual property rights from one party (the assignor) to another (the assignee). Intellectual property covers a broad spectrum of intangible assets, including patents, copyrights, trademarks, trade secrets, and more.

For instance, a software developer might have created a groundbreaking algorithm while employed at the company. Through an IP assignment agreement, the developer transfers the rights to this algorithm to the employer, ensuring that the company has exclusive ownership and control over its use and commercialization.

Benefits of IP assignment agreement

IP assignment agreements are crucial in a company’s business and provide multiple benefits for the assignor and assignee.

Clear ownership

By executing an IP assignment agreement, the assignor unequivocally transfers all rights and interests in the intellectual property to the assignee. This clarity of ownership and proprietary rights helps to avoid disputes and potential litigation over the ownership of the IP in the future.

Legal protection

By formally transferring the IP rights through a written agreement, both parties are legally protected. This protection can be essential in case of any infringement or misuse of intellectual property.

Assured compensation or price guarantee

When transferring IP ownership rights for patents, trademarks, copyrights, etc., the original owner gets compensated by the party buying the ownership. The buyer will also pay the IP owner an agreed-upon price for the IP, which will be paid on the date as decided by the involved parties.

No future obligations

The party selling the IP won’t be responsible for meeting any future obligations. For instance, if there is an existing trademark that requires constant monitoring to know whether the trademark is used by any other competitors, the seller won't bear the charges incurred for  trademark monitoring . The buyer has to bear these and any future trademark maintenance costs.

Commercialization opportunities

Assigning intellectual property rights can enable businesses to commercialize the intellectual property more effectively. This could involve licensing the IP to third parties, selling it outright, or using it as collateral for financing.

Facilitates collaboration

In cases where multiple parties are involved in creating intellectual property, an assignment agreement can facilitate collaboration by clearly defining each party's rights and responsibilities.

Risk mitigation

For businesses acquiring ownership rights to intellectual property, an assignment agreement mitigates the risk of third parties claiming rights to the IP. It provides a legal basis for defending against infringement claims and protects the assignee's investment in the IP.

Enhanced value

Clear ownership of intellectual property assets can enhance the value of a business, especially during mergers, acquisitions, or fundraising activities. Investors and stakeholders are more likely to perceive a business positively when it has secure ownership of valuable IP assets. For example, let’s say your start-up company holds sole intellectual property rights to an automatic house-locking system. When your company gets acquired by another company, the new company will also evaluate the value of the IP owned.

Understanding IP assignment agreements: Considerations for sellers

While intellectual property assignment agreements offer various benefits, as a seller of the IP you need to keep in mind what it entails for you when you sell your IP.

Choosing between an IP assignment and a licensing agreement

In an IP assignment agreement, the seller transfers all ownership rights to the intellectual property for a predetermined fee. Here the seller gets a fair market value for their IP as a one-time payment. However, if they had opted for an  IP licensing arrangement , they could have retained the ownership of their IP while giving certain usage rights to the interested party. For instance, let’s say you have written and composed a song. A music company wants your song under their label. Here you have two options. You can sell your song completely to the music label, where they’ll have the right to use or alter your song as they deem fit. Or you can license your creation for an agreed-upon fee or price and set the terms and conditions for using your song. Here you’re getting paid for your creation while retaining ownership of your creation. Whichever option works best for you can be opted and respective agreements can be drawn. 

Value uncertainty

The value of intellectual property can fluctuate over time due to changes in market demand, technological advancements, or legal developments. Sometimes an intellectual property’s future value can increase tremendously, impacting the fairness of the negotiated price. Hence, while deciding the price of such assets, the seller should calculate the future valuation and decide the price of IP.

Limited future opportunities

Once intellectual property rights are assigned, the assignor may be restricted from using or further developing the intellectual property in the future. This limitation could hinder the assignor's ability to explore new business ventures or pivot their existing strategies.

In conclusion, while an intellectual property assignment agreement offers significant benefits in terms of clarity, protection, and commercialization of intellectual property assets, parties must carefully weigh these advantages against the limitations. Consulting with legal professionals experienced in intellectual property law is essential to navigate these considerations effectively.

What are the types of IP assignment agreements?

Intellectual property assignment agreements are comprehensive in nature, outlining the terms and conditions under which the transfer of IP ownership occurs. Here's an overview of the types of IP assignment agreements:

Patent assignment agreement or assignment of patents

A  patent assignment agreement  is a written agreement whereby the owner of a patent transfers or assigns their ownership rights to the other party. This agreement ensures that the assignee gains full legal rights to the patent, including the right to exclude others from making, using, or selling the patented invention, innovations, and processes. Patent assignment agreements typically include details about the patented invention, including patent numbers, descriptions, and any related rights or obligations.

Copyright assignment agreement or assignment of copyrights

Copyright assignment agreements  transfer ownership of creative works, such as literary works, music, art, and other creative expressions. By signing a copyright assignment agreement, the creator relinquishes their rights to reproduce, distribute, and display the copyrighted work to the assignee.

Trademark assignment agreement or assignment of trademarks

Trademark assignment agreement s  transfer ownership of trademarks, which are used to identify and distinguish goods or services in the marketplace. Through this agreement, the assignor relinquishes their exclusive rights to use the trademark in commerce, allowing the assignee to use and enforce the mark for their business or products.

Trade secret assignment agreement or assignment of trade secrets

Trade secret assignment agreements are used to transfer ownership of confidential information or trade secrets from one party to another. These agreements outline the specific trade secrets being transferred and impose obligations of confidentiality on the assignee to protect the secrecy of the information.

By signing such an agreement, the assignee gains the rights to use and protect the trade secrets for their own benefit. It can be any proprietary information like formulas, processes, customer lists, and business strategies. These agreements typically include provisions to maintain confidentiality and prevent unauthorized disclosure or use of trade secrets.

Design assignment agreement or assignment of design

An assignment of design agreement involves the transfer of ownership rights related to industrial designs or product designs. It ensures that the assignee gains exclusive rights to reproduce, distribute, and modify the design according to their business needs. This agreement is crucial for companies involved in product development and manufacturing.

Employee or contractor IP assignment agreement

These agreements transfer ownership of intellectual property created by employees or contractors during their employment or engagement. They are essential for employers to secure ownership of IP developed by their personnel. They often include provisions related to confidentiality, non-competition, and non-disclosure, which are mostly included in an employment agreement. Sometimes, employers even ask employees to sign separate non-disclosure agreements whenever an employee comes up with an invention. 

Assignment of IP in a joint venture 

In cases where multiple parties jointly create intellectual property, a joint ownership agreement may establish each party's rights and responsibilities. These agreements detail the terms of joint ownership, including each party's share of the IP, decision-making authority, and rights to exploit the IP.

It's essential to choose the appropriate type of IP assignment agreement based on the specific intellectual property rights being transferred and the circumstances of the transaction. Consulting with legal professionals knowledgeable in intellectual property law can help ensure that the agreement adequately protects the interests of all parties involved.

Who uses intellectual property assignment agreements?

IP assignment agreements are utilized across a spectrum of industries and scenarios. These agreements are crucial tools for businesses and individuals seeking to define and transfer intellectual property rights.

Corporations and businesses

Employment agreement : Companies frequently incorporate IP assignment clauses into their employment contracts. This ensures that any intellectual property created by employees during the course of their employment is automatically assigned to the company.

Consulting agreement : Similar to employment agreements, consulting contracts may include provisions requiring consultants to transfer any intellectual property they develop while working for the company.

Transactions contemplated : In mergers, acquisitions, or other business transactions, IP assignment agreements are employed to transfer ownership of intellectual property assets between parties.

Joint ventures : Partners in joint ventures often use these agreements to clarify ownership rights and facilitate the sharing or licensing of intellectual property developed during the collaboration.

Individuals and inventors

Prior inventions : An individual with a prior invention may use IP assignment agreements to transfer ownership rights to a new employer or business partner.

Consultants and contractors : Freelancers, consultants, and independent contractors may be required to sign an IP or invention assignment agreement as part of their contractual arrangement with clients.

Startups : Startup founders commonly use these agreements to consolidate ownership of intellectual property created before or during the company's establishment.

In essence, assignment agreements are utilized by parties across various sectors and contexts to facilitate the transfer of valuable intellectual property rights, ensuring legal protection and compliance while fostering innovation and business growth.

Key provisions of an intellectual property assignment agreement

Introduction.

Begin the agreement by formally introducing the parties involved to the agreement. In an intellectual property assignment agreement, the party selling the IP is called the “assignor,” and the other party who buys it is called the “assignee.” Here, along with providing the details of the intellectual property, the assignor explicitly agrees to transfer intellectual property rights to the assignee according to the agreed-upon terms of the agreement.

Assignment of IP

This section specifies the intellectual property being transferred. It identifies the specific patents, trademarks, copyrights, trade secrets, or other intellectual property referenced in the agreement. Additionally, it outlines the scope of the transfer and any limitations on the assigned IP rights.

Purchase price

The agreement details any monetary compensation involved in the transfer of intellectual property rights. In this section, clearly outline the payment terms of the agreement. Detail whether the parties hereto agree to pay the assignor as a lump sum or in installments. If the payment is made in installments, you must also provide the schedule for such payment.

Recordation

To formalize the transfer of intellectual property rights, recordation with relevant authorities may be necessary. This provision addresses the requirement and process for recording the assignment with the appropriate governmental authority, ensuring compliance with legal formalities.

No early assignment

This clause states that the assignment of IP rights cannot occur before certain conditions are met, such as before the completion of a project or the fulfillment of payment obligations. This section prevents premature transfers of IP.

Assignor’s representations

In this part, the assignor provides assurance that they have the sole right to the IP created and it hasn’t been licensed to any third-parties. They also affirm that they have the legal authority to transfer ownership of the IP and there are no undisclosed encumbrances or infringements.

Indemnification

This provision outlines the parties' obligations to indemnify each other against any losses, damages, or liabilities arising from a breach of the agreement or the assertion of third-party claims related to the transferred IP.

Governing law

This section specifies the jurisdiction whose laws will govern and interpret the agreement. It provides clarity in the event of legal disputes.

This clause outlines the procedures for making changes or modifications to the intellectual property assignment agreement. To make any changes pertaining to the terms of the agreement requires written consent from both parties.

Assignment and delegation

This provision addresses the transferability of rights and obligations under the IP assignment agreement. They stipulate whether parties can assign their rights or delegate their duties to third parties.

Counterparts; electronic signatures

This section permits the IP assignment agreement to be executed in multiple counterparts, facilitating convenience in signing. It also recognizes the legal validity of electronic signatures, ensuring compliance with modern technological practices.

Severability

The severability clause states that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect. This ensures that the invalidity of one provision does not invalidate the entire agreement.

This provision details the methods and addresses for official communication between the parties regarding the intellectual property assignment agreement. They ensure that important correspondence is properly delivered and acknowledged.

Waiver provision addresses instances where a party chooses not to enforce its rights under the agreement. For instance, if certain provisions are waived off on a one-time basis regarding the agreement, this doesn’t mean that the provision is waived for the entire term of the agreement. Take the case where the assignee is paying for the IP in installments. If the assignee is not able to pay the installment for a month, then the assignor can waive that default and continue the agreement upon prior written consent.

Entire agreement

This part of an intellectual property assignment agreement explains that the parties agree to the specific terms and conditions mentioned in the agreement. Any verbal negotiations or other terms that are even stated via email or otherwise are not part of this agreement.

This section states that the headings used in the agreement are for convenience only and do not affect the interpretation of the provisions.

Effectiveness

The effectiveness provision specifies the date on which the agreement becomes effective. This ensures clarity regarding when the rights and obligations outlined in the agreement take effect.

Necessary acts; further assurances

Requires the parties to take any additional actions necessary to carry out the terms of the agreement fully. This may include signing additional documents or cooperating with each other as needed.

How does an online template facilitate drafting intellectual property assignment agreements?

There are various advantages of using an online template for IP such as.

Simplified drafting process

Online templates streamline the drafting process of IP assignment agreements. By providing a structured framework, these templates guide users through the essential elements required for such agreements. Users can efficiently input pertinent details specific to their arrangement, ensuring comprehensive coverage of the subject matter assigned.

Ease of customization

Some  online template providers, like LegalZoom , allow you to easily customize the templates to suit specific circumstances. With editing options available, users can modify clauses and provisions to reflect their agreed-upon terms and conditions of the arrangement

Clarity and consistency

These templates offer clear and standardized language, enhancing understanding and minimizing ambiguity. Consistent formatting and terminology throughout the agreement contribute to its readability and effectiveness.

Time and cost efficiency

Utilizing an online template can minimize the need for extensive document research and costly legal consultations. It allows parties to draft a comprehensive IP assignment agreement efficiently and affordably, saving valuable time and resources.

Accessibility and convenience

Online templates are readily accessible from anywhere with an internet connection, enabling parties to initiate and complete the drafting process conveniently. This accessibility promotes collaboration and facilitates the timely execution of agreements.

As you can see, using online templates provides numerous benefits. Since there are a multitude of templates available online, choosing the right template is key. To streamline this process, LegalZoom offers a comprehensive intellectual property assignment agreement template that is simple and easy to use. Just answer the guided questions, complete the form, and download the document for free.

Frequently asked questions

What's an intellectual property assignment agreement.

When your business needs to sell or buy intangible assets, use an intellectual property assignment agreement to protect both parties. It enables the transfer of ownership of intangible items legally. Intellectual property includes everything from patents to trademarks to software and more.

What key details are required to complete your assignment agreement?

Here's the information you'll need to complete your intellectual property assignment agreement:

• Who owns the intellectual property : Keep the information of the assignor ready while drafting your agreements
• Who's buying the intellectual property : Have the name and contact details of the assignee ready
• How much it costs : Know what the buyer pays for the intellectual property

Related categories

Related templates.

Assignment of Agreement

Transfer work responsibilities efficiently with an assignment of agreement. Facilitate a smooth transition from one party to another.

Copyright Assignment

Protect your intellectual property with a copyright assignment form. Securely transfer your copyright to another party, clearly defining ownership terms while preserving your rights effectively.

Patent Application Assignment

Transfer the ownership rights or interests in a patent application. A patent application agreement defines the terms of transfer, promotes collaboration, and mitigates risks.

Patent Assignment

Simplify the process of transferring patent rights for both buyers and sellers with a patent assignment agreement. Document the ownership transfer clearly and efficiently.

Trademark Assignment

Simplify the buying and selling of trademarks with a trademark assignment agreement. Transfer intellectual property rights and ensure a fair and smooth transaction.

Trademark License Agreement

Ensure fair use of intellectual property with a trademark license agreement. Outline the terms of usage and compensation.

IP Clauses In Employment Contracts And Assignments

Written by Saad Khan | March 30, 2022

IP Contracts

If you have a contract of employment, there’s a good chance it includes a section that deals with intellectual property (IP) rights. The IP clause will likely state that all IP created by the employee in the course of their employment is owned by the employer. As IP encompasses a broad range of rights, such as trade marks, designs, copyright, database rights and patents, it’s important to read this clause carefully before signing your employment contract.

This blog will focus only on the IP clause in the context of copyright. Copyright protects works such as books, music, software code and film (amongst other things), and arises automatically – so there is no requirement to register the right. The owner of copyright has many exclusive rights in relation to the work in question. For example, an author of a book has exclusivity to copy the book, issue copies to the public, and make adaptations. As such, the owner of copyright work holds the cards when exploiting the IP’s potential. Whether you’re an employer or employee, pre or post-contract, it’s extremely useful to know your rights in relation to IP clauses.

The general rule of copyright

The general rule is that the author (defined as the person who creates the copyright work) is the first owner. However, if a literary, dramatic, musical or artistic work is made by an employee in the course of their employment the employer is the first owner, subject to any agreement to the contrary. As mentioned earlier, employers will reinforce this by including an IP clause in the employment contract, along with the other rights.

Firstly, you need to know whether you are in an employee-employer relationship, as opposed to a worker or self-employed. The contract document isn’t determinative, so it’s necessary to look at the practical reality and nature of the relationship between both parties.

Secondly, the work needs to be made during the course of an employee’s employment. Below are some factors that will help determine this:

• a) The terms of the contract of employment
• b) Where the work was created
• c) Whether the work was created during normal office hours
• d) Who provided the materials for the work to be created
• e) The level of direction provided to the author
• f) Whether the author can refuse to create the work/s
• g) Whether the work is ‘integral’ to the business

To illustrate, in a recent case, the High Court dealt with the interpretation of an employment contract. The employee (Mr P) created virtual forensic computing (VFC) software prior to his employment at a company called MD5. MD5 employed him on the premise that he would develop that VFC software for the company’s product, which would be sold to their customers. Mr P argued he worked on the VFC software at home on his own computer and during his time off. Similarly, Mr P worked at home on a user guide to assist the end-users of MD5’s product.

The Judge stated that it did not matter that Mr P developed the software using his own computer at home as he was paid to do this, and it was part of his employment duties. Similarly, the guide was also integral to the software and also formed part of his duties. Therefore, MD5, the employer, was held to be the first owner of the copyright to the VFC software and user guide.

As this case shows, doing work at home on a personal computer was deemed to be in the course of employment, but this was based on Mr P having been hired to develop the software for MD5. Had Mr P worked on a different software unrelated to his MD5 duties, he would have a stronger argument. It’s also important to note that the factors listed above are not a checklist exercise when determining ‘in the course of employment’. The court will look at those factors which are relevant to the facts of each case.

Assignment of copyright

Another key thing to consider is commissioning someone to create work for you. If you hire someone such as a freelancer/creative agency to produce a copyright protectable work, such as a logo, they will be the first owner of the copyright in the artistic work. These individuals or companies will not be your employees, meaning you do not automatically become the first owner of their copyright works. Such a situation can be overlooked and, before you know it, the copyright has been assigned to some other party.

Accordingly, you will want them to assign the IP rights in the work to you as soon as possible. An assignment means they transfer the ownership of the IP rights in question to you.

An assignment must be in writing, signed by or on behalf of the assignor. It is wise to have this document prepared before commissioning any work.

The IP clause in an employment contract will of course be relevant to some employees more than others. Certain roles may require employees to create pieces of work eligible for IP protection over the course of their employment. Equally, an employee may take some initiative outside of work to create something innovative and unique that is closely related to their employment.

From an employee’s perspective, check whether any work you create is protected by copyright. Then, make sure you are in fact an employee. And finally, consider whether you are creating the work in the course of your employment. Before creating work while employed, ask yourself if the copyright work is something you would create in the course of your employment. It’s also worth checking the clauses in the contract as some can be quite wide and potentially try and take ownership of all IP you create.

From the employer’s side, ensuring there is an employer-employee relationship in the first place would be wise to start with. Then, include an IP clause and ensure it covers all IP rights, regardless of whether it may or may not be relevant to you and your business. Sound recordings and broadcasts don’t fall under the general rule so if these are important, consider getting these assigned to you.

If you require assistance with IP clauses in contracts or drafting an assignment, no matter how small or complex, then please get in touch with one of our specialist lawyers.

Related articles

Best Practices – Wrap Terms and Conditions

Wrap terms and conditions, such as clickwrap and browsewrap agreements, play a pivotal role to digital based businesses. They allow businesses to streamline the process of obtaining user consent to…

Traditional Agreements vs Standard Terms

Contracts are essential for safeguarding your business and can be established through various means such as oral agreements, behaviours, and written documents. To minimise misunderstandings, it’s best to have contracts…

Book a free consultation with one of our specialist solicitors.

We’ll start with a no obligation chat where we’ll get to know you and understand your current challenges.

Book your free consultation now

Looking for more information?

• Our Attorneys
• Practice Areas

Intellectual Property in Employment Agreements

One of your employees has developed a new method that substantially improves the efficiency of a process your company uses to manufacture one of its product lines. You want to file a patent application to cover the new method, but the employee refuses to cooperate and says that the invention belongs to him, not the company. Or, worse yet, the employee leaves the company and moves to your competitor. Shortly after commencing employment there, the competitor implements the improved method as well. So, who actually owns the intellectual property developed by an employee and how can a company protect itself from costly lawsuits or settlements regarding this issue?

Employment Agreements

For a company with substantial intellectual property in hand and under development, it is important to have employment agreements for new employees that include clauses for dealing with intellectual property rights.

When hiring new employees, be certain to have IP disclosure and assignment clauses in employment agreements for all employees. These clauses should require the new employee to promptly disclose new inventions or other intellectual property to the employer upon conception and to assign such inventions to the employer at that time. Be certain that the agreement is clear that the employee has an obligation to assign new inventions to the new employer as a part of the employment and that the employee has a duty to assist with the patenting process for such inventions.

Employment Agreements Should be Signed at the Start of Employment

Have all new employees sign such agreements prior to employment or at least on the first day. Some states may require additional consideration once employment has already commenced for such clauses to be valid. In those states, in order for the later signed agreements to be valid, the employer must provide a raise, bonus, or something else of value to the employee. Many companies do provide bonuses as incentives to produce patentable inventions, but these are not requirements for the validity of the employment agreement.

Use Common Legal Language in Employment Agreements

When preparing employment agreements, keep in mind that certain words have specific definitions or understandings in patent law.  For example, ambiguity could arise as to whether the employee would “conceive” and “make” an invention.  Try to stick with the definitions that are common to patent law.  “Conception” refers to “formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is thereafter to be applied to practice.” This is more than just a vague idea of an invention, as it requires definite plans for how to implement the invention. “Make” or “reduction to practice” refers to the act of actually making the invention work for its intended purpose.

Inventions Made Prior to Employment

Next, to avoid a dispute as to whether the invention was developed prior to employment, when executing the agreement, give the new employee the opportunity to indicate that he developed the invention prior to commencing employment. Require that he prove this development by providing sufficient detail so that he can’t later argue that vague statements constitute conception. Unless the parties agree otherwise, the employee should retain all rights in inventions that he conceived or invented prior to commencing employment. This can also reduce the potential for a dispute with a prior employer that it owns an unpatented invention the former employee developed while working for the previous employer.

IP Assignment Provisions

Finally, use language that requires the employee to promptly disclose inventions to the company and to “hereby assign” all future inventions. This way, an assignment is not required later once the employment has ended and you need to find the former employee and potentially sue him to obtain his cooperation. Instead, make the assignment effectual as soon as inventions are conceived.

Former employees are not always cooperative in the patent process for their former employers. You should probably include language the grants the employer at least a partial power of attorney to execute documents on behalf of the former employee inventor in cases where that becomes necessary.

Planning ahead by including intellectual property provisions in employment agreements can save a substantial amount of time and money in the event you later try to secure rights in inventions that are important to your company.

This blog is made available by Goodman Allen Donnelly for general information, and does not constitute legal advice. By reading this blog, you understand that there is no attorney-client relationship between you and the firm. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

4050 Innslake Drive Suite 200 Glen Allen , VA 23060

150 Boush Street Suite 900 Norfolk, VA 23510-1626

Charlottesville

123 East Main Street Seventh Floor Charlottesville, VA 22902

Williamsburg

428 McLaws Circle Suite 200 Williamsburg, VA 23185

Information on this website is for general information purposes only. Nothing on this site should be taken as legal advice. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. By submitting your information in any form on this website, you consent to be contacted via phone call, text message, or email. Please be aware that, while we use commercially reasonable means to protect information that is submitted, such information can never be 100% secure.

Privacy Overview

• Practical Law

Drafting Employee Work Made For Hire and IP Assignment Clauses

Practical law legal update 6-523-4246  (approx. 4 pages), work made for hire and assignment.

• Secure an actual conveyance of the employee's rights.
• Minimize the risk of a successful challenge to the employer's rights at a later date.
• A further assurances clause in the event the employer finds it necessary or desirable for the employee to execute additional documents or assist the employer in its efforts to enforce the IP rights against third parties.
• A grant of power of attorney to the employer for the purpose of executing any documents and undertaking appropriate actions, if, for example, the employee is unavailable or uncooperative.

State Law Limitations

• Relate to the employer's business.
• Result from any work performed by the employee for the employer.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Intellectual property assignment agreement template

Create and automate intellectual property assignment agreements more efficiently with this free template.

Securing intellectual property rights is crucial for innovators and businesses. Use this free intellectual property assignment agreement template to safeguard your innovations.

Intellectual property (IP) is a valuable asset for businesses, and ensuring its proper transfer and assignment is vital for both the assignor and the assignee.

So, what is an intellectual property assignment agreement? Why is it important, when should you use one, what should it encompass, and how can you manage them efficiently? Let's dive in.

What is an intellectual property assignment agreement?

An intellectual property assignment agreement is a legal document that facilitates the transfer of IP rights from one party (the assignor) to another (the assignee). This could relate to various forms of IP, including patents, trademarks, copyrights, and trade secrets. 

The agreement delineates the terms and conditions under which the IP rights are transferred, ensuring clarity and protection for both parties involved.

How does an intellectual property assignment agreement work?

Once both parties sign the intellectual property assignment agreement, it becomes legally binding. This means that the assignor relinquishes their rights to the specified IP, and the assignee becomes the new owner. 

The agreement should clearly define the IP being transferred, any compensation involved, and the responsibilities of both parties post-transfer.

When do you need an Intellectual Property Assignment Agreement?

Such agreements are essential when:

• A business acquires another company and its assets, including IP.
• An employee or contractor develops an invention or work while under employment and transfers the rights to the employer.
• A business wants to secure rights to a specific IP before commercializing or licensing it.

What should an intellectual property assignment agreement template include?

Identification of parties. Clearly state the assignor and assignee, including their legal names and primary business locations.

Description of the IP. Detail the intellectual property being transferred, ensuring clarity on its scope and nature.

Compensation. Specify any payment or consideration for the IP transfer.

Warranties and representations: The assignor should confirm they own the IP and have the right to transfer it.

Confidentiality. If the IP contains confidential information, this section ensures both parties maintain secrecy.

Liability limitations. Define any limitations on liabilities for both parties.

Termination. Conditions under which the agreement can be terminated should be outlined.

Dispute resolution. Detail the mechanisms for resolving potential disagreements, such as arbitration or litigation.

Governing law. Specify the jurisdiction governing the agreement.

Miscellaneous provisions. Any other terms and conditions pertinent to the agreement.

Traditional intellectual property assignment agreement management process

Managing intellectual property assignment agreements can be cumbersome, especially when relying on traditional methods. Typically, teams:

• Draft the contract in Microsoft Word or Google Docs
• Send the contract for internal review via communication platforms
• Share updated versions with counterparties via email
• Negotiate with redlines in Word
• Convert it to a PDF
• Move it into an eSigning tool
• Upload a copy of the executed contract to a shared drive

This process is repetitive and can be streamlined with modern contract management platforms like Juro. With Juro, you can automate the entire process, from drafting to signing, ensuring efficiency and accuracy.

Automating Your Intellectual Property Assignment Agreement

With platforms like Juro, you can:

• Use automated contract templates .
• Implement conditional logic for specific clauses.
• Integrate with other platforms for seamless data transfer.
• Use bulk actions for mass contract generation.
• Negotiate directly on the platform.
• Utilize built-in eSignature features.
• Store and manage contracts securely in a centralized repository.

Intellectual property is a valuable asset, and its proper assignment is crucial for businesses. By understanding the intricacies of intellectual property assignment agreements and leveraging modern tools, you can ensure a smooth and efficient transfer process.

If you're interested in streamlining your contract management process, book a personalized demo with us today.

Ready to agree contracts faster?

Juro is the #1-rated contract platform globally for speed of implementation.

Ready to automate routine contracts?

Juro users typically win back 70% of time spent on contract admin.

Your privacy at a glance

Hello. We are Juro Online Limited (known by humans as Juro). Here's a summary of how we protect your data and respect your privacy.

Types of data we collect

• Contact details
• Financial information
• Data from your contracts
• Data that identifies you
• Data on how you use Juro

How we use your data

• To keep Juro running
• To Help us improve Juro
• To give personalized customer support
• To send you marketing messages (but only if you tell us to)

       Third parties who process your data

• Infrastructure: Algolia, AWS, MonggoDB
• Analytics: Google Analytics. Heap, Mixpanel, Metabase, Hotjar
• Integrations: (by your request) Salesforce, Slack, Google
• Comms: Hubspot, Intercom, Sendgrid, Sumo
• Payments: Stripe

We use cookies

• We use only necessary cookies to run and improve the service
• Our third-party service providers use cookies too (which they control)
• You can turn off cookies but this will mean that we can't recognize you in in-app messaging and we can't resolve issues as easily.

When and how we collect data

Know your rights

• Access information we hold on you
• Opt-out of marketing comms
• Port your data to another service
• Be forgotten by Juro
• Complain about us

Get the template

Join our next 30-min live demo of Juro

Modern businesses use Juro to automate contracts from drafting to signature and beyond, in one intuitive platform that every team can use. Want to see how?

New York Restricts Assignment of Employee Intellectual Property

On September 15, 2023, New York Governor Kathy Hochul signed SB 5640 into law, adding New York to the growing list of states that restrict the enforcement of employee intellectual property assignment agreements.

SB 5640 creates a new Section 203-f under New York’s Labor Law, which the New York State Department of Labor (NYSDOL) is responsible for enforcing. The new law took effect immediately upon Governor Hochul’s signature, so it is vital that New York employers act now to understand the new legal landscape.

What SB 5640 Says

The new law generally makes unenforceable any provision in an employment agreement that requires an employee to assign to the employer (or offer to assign) an invention that the employee develops on their own time and without the employer’s equipment, supplies, facilities, or trade secret information (a “Non-Assignable Invention”). However, SB 5640 exempts from this carveout those inventions created on the employee’s own time/equipment that:

• at the time of conception or reduction to practice, relate to the employer’s business, actual research or development, or anticipated research or development, or
• result from work that the employee performs for the employer.

In other words, even if the invention was created on the employee’s own time and without the employer’s tools, etc., if it either relates to the business when it was developed or results from work that the employee is performing for the employer (an “Exempt and Assignable Invention”), it is not covered by the pro-employee protections of SB 5640; thus, the employer can enforce any relevant assignment provision.

Importantly, while SB 5640 invalidates overly broad invention assignment provisions, it does not create an express private right of action. However, employers should remember that New York Labor Law Section 213 generally provides that any person who violates a labor law, as well as any officers and agents of any corporation who knowingly permit the corporation to violate the law, are guilty of a misdemeanor punishable by a series of fines.

While the text of SB 5640 refers only to the assignment of employee “inventions” (for which there is no definition), employers should be aware that the legislative commentary accompanying the law refers to the broader concept of “IP” as well as “inventions.” Although this commentary is not binding, it suggests that the legislature may intend for the law to apply to all forms of employee intellectual property. [1] It remains to be seen whether the NYDOL and courts will broadly interpret SB 5640 to align with this position.

How SB 5640 Relates to Other States’ Laws

With the addition of New York, more than 10 states now regulate employee assignment of intellectual property rights, including California, Illinois, Minnesota, and New Jersey. [2] Although these laws generally favor employee ownership and mobility, their specific scopes vary significantly.

One area of differentiation is the type of employee inventions that the laws exempt from the employee-favorable carveout. For example, both SB 5640 and Minnesota law exempt certain inventions that “relate” to an employer’s business. However, the laws are distinct in two important ways.

First, New York law includes a temporal qualifier that is absent from Minnesota law. Under SB 5640, an employee’s related invention only qualifies as an Exempt and Assignable Invention if it relates to the employer’s business or actual or anticipated research or development “at the time of conception or reduction to practice.” If the invention does not relate to the employer’s business at such time, it is not an Exempt and Assignable Invention, so the employer cannot require the employee to assign the invention. Under Minnesota law, all related inventions qualify as an Exempt and Assignable Invention regardless of timing. In this way, Minnesota allows employers to require employees to assign more inventions than under New York law.

In contrast, Minnesota law includes a relationship qualifier that is absent from SB 5640. Under Minnesota law, an employee’s related invention only qualifies as an Exempt and Assignable Invention if it “directly” relates to the employer’s business. Unless future NYSDOL guidance or court precedent requires otherwise, under New York law, inventions that are directly or indirectly related to an employer’s business qualify as Exempt and Assignable Inventions. In this way, New York law allows employers to require the assignment of a broader range of inventions than Minnesota law does.

Another way in which state laws differ is through the imposition of affirmative employer obligations. SB 5640 only limits the types of employee invention assignment agreements that are enforceable . It does not require an employer to take (or prohibit an employer from taking) any specific action. This is markedly different from California law, which, in addition to limiting enforcement, also requires employers to include specific notice in employee invention assignment agreements as to the inventions that employees may not assign. Other states, including Illinois, Kansas, Minnesota, and Washington, impose similar notice obligations on employers as well.

Given this trend in legislation, although not required under SB 5640, including provisions that specifically identify and carve out Exempt and Assignable Inventions from New York employee invention assignment agreements not only makes it clear and unambiguous to employees what inventions they are and are not assigning but also may help reduce the risk of a court invalidating an assignment provision in its entirety.

What New York Employers Should Do Now

To comply with SB 5640, employers should do the following:

• Identify relevant employment agreements and handbooks, compliance manuals, or other policies that contain an employee invention or other intellectual property assignment provision (“Assignment Provisions”).
• Revise Assignment Provisions to (i) include a clear description of what constitutes an Exempt and Assignable Invention and (ii) exclude Non-Assignable Inventions from their scope.
• Maintain accurate records regarding business plans as well as actual or anticipated research or development to counter any employee claims that an invention is not an Exempt and Assignable Invention.
• Monitor the NYSDOL’s website for guidance relating to SB 5640.

For more information about this  Insight , please contact:

[1] Employers should be aware that notwithstanding SB 5640 and similar state laws, federal law may conflict with these laws’ protections. For example, where work product is capable of both copyright and trade secret protection, if the work product is not a work made for hire, the employer cannot claim ownership of the work as a trade secret.

[2] Other states with such laws include Delaware, Kansas, Nevada, North Carolina, Utah, and Washington.

More Like This

• Corporate & Transactional
• Employment, Labor & Workforce Management
• Intellectual Property
• Financial Services
• Health Care Industry
• Hospitality
• Life Sciences Industry
• Go to the privacy settings
• Download PDF
• Download Word

By clicking “Accept All Cookies,” you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.

Complete Guide: Filling Employee IP Assignment Agreement – Cognizant

How to fill employee intellectual property assignment agreement cognizant.

Employee intellectual property assignment agreements are vital documents that protect a company`s interests when it comes to the inventions and works created by its employees. This agreement ensures that any intellectual property developed by an employee while working for the company is assigned to the company and not the individual employee. If you`re an employee at Cognizant, it`s essential to understand how to fill out this agreement correctly to protect your employer`s intellectual property rights. Below, we`ll provide a step-by-step guide on how to fill out the employee intellectual property assignment agreement cognizant.

Step 1: the Agreement

Before filling out the agreement, it`s crucial to understand its purpose and implications fully. Take the time to read through the document carefully and consult with an attorney if you have any questions or concerns. The will ensure that are aware of obligations regarding property during your at Cognizant.

Step 2: Provide Accurate Information

When filling out the agreement, it`s essential to provide accurate information about yourself and your role at Cognizant. That legal name, title, and are stated in the Providing information help avoid any disputes or regarding the of property in future.

Step 3: Disclose Prior Inventions

If you have any prior inventions or intellectual property that you have developed before joining Cognizant, it`s crucial to disclose these inventions in the agreement. To disclose prior property in the agreement.

Step 4: Legal Advice

Filling out employee intellectual property agreement be especially if have or about its terms. advisable to legal advice from an with in property law. An can review the and that your are while with Cognizant`s requirements.

Filling out an employee intellectual property assignment agreement with Cognizant requires careful attention to detail and a thorough understanding of its implications. By the steps above and legal if you can that the is and in with Cognizant`s Remember, agreement is to both you and by defining ownership of property during your employment. Take time to fill out agreement and to any disputes in future.

Employee Intellectual Property Assignment Agreement

This Employee Intellectual Property Assignment Agreement (the “Agreement”) is into between Cognizant (the “Company”) and the employee (the “Employee”) with effective date of _____________ (the “Effective Date”).

In of the Employee’s employment with the Company and the paid, the of which acknowledged, the agree as follows:

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

Top 10 Legal Questions About Filling Employee Intellectual Property Assignment Agreement with Cognizant

Privacy Overview