Intellectual Property Lawyers for Sioux Falls, South Dakota

Hi, Yes, intellectual property created by you as an employee, within the scope of your employment, under a work-for-hire agreement, probably belongs to your employer. To learn more about your rights under the agreement and any exceptions, you should consult with a qualified attorney.

When you're selling your business in Texas and that sale includes registered trademarks, getting the Trademark Transfer Agreement right isn’t just paperwork. It’s what protects you and the buyer from serious legal headaches. Here’s what you need to understand about how it all works and what to include. FIRST, THE LEGAL BASICS Let’s get clear on where the law comes into play. If your trademarks are registered with the USPTO, federal law applies, specifically 15 U.S.C. § 1060. If you’ve registered marks at the state level in Texas, those fall under Section 16.061 of the Texas Business & Commerce Code. A lot of businesses have federal trademarks, but some have both, and each needs to be handled the right way. Here’s a critical point: you can’t transfer a trademark by itself. Legally, it has to go with the goodwill tied to it. That means the reputation, customer trust, and market recognition associated with your brand. Courts take this seriously. If you try to assign a trademark without transferring the goodwill behind it, that assignment can be ruled invalid. The trademark has to stay connected to its original source, or the legal protection starts to fall apart. KEY PARTS OF THE AGREEMENT Identifying the Parties and Background Info Start simple. Spell out who’s selling and who’s buying, using full legal names and business addresses. Include a quick explanation in the recitals that you own the trademarks and plan to transfer them as part of the business sale. Detailed Trademark Descriptions List every trademark included in the transfer. For federal marks, include things like registration numbers, any pending application serial numbers, filing dates, and the international classes they fall under. For Texas marks, include the state registration numbers and any other relevant details. Don’t forget common law marks either. If you’ve been using a brand name or logo in business without registering it, it still has value and legal protection. The Assignment Clause Itself This is where the actual transfer happens. The language needs to make it crystal clear that you’re transferring all rights, title, and interest in the trademarks, and just as important, the goodwill that goes with them. That’s not optional. For federal trademarks, this clause has to meet the standard set by 15 U.S.C. § 1060. For Texas marks, the law requires that the transfer include “the goodwill of the business in which the mark is used.” Be sure to include language that talks about transferring the reputation, customer recognition, and market value of the marks. That’s what keeps the assignment legally valid. Purchase Price and Who Pays for What Spell out what the trademarks are worth as part of the overall deal. If the value is rolled into the full business sale price, say that clearly. Also note who’s responsible for any filing fees with the USPTO or Texas Secretary of State, legal costs, and whether there’s any money going into escrow. Warranties and Representations You’ll need to confirm that you’re the sole owner of the trademarks, that they’re valid and enforceable, and that there are no liens, disputes, or infringement claims you know of. You can qualify some of these with “to the best of your knowledge,” especially if you're not sure about everything. The buyer will also need to make some promises, like having the ability to maintain and protect the trademarks going forward. Indemnification Terms This is how you divide up risk. You should agree to cover any trademark issues that started before the sale, such as pending legal disputes or past infringement claims. The buyer takes on anything that happens after the transfer. Be sure to include who will handle any legal defense and how costs are covered. What Happens After the Sale You’ll probably need to sign additional paperwork later to finalize the transfer, especially for filing purposes. You also need to agree to stop using the trademarks after closing. If you’re going to help the buyer with trademark maintenance or recordation, lay that out clearly. Cooperation after closing is often what makes the legal side go smoothly. WHAT IF THERE'S A TRANSITION PERIOD? If you’ll still be involved in operations temporarily or helping during a handoff, add quality control provisions. This matters because if the buyer is using the trademark on the same goods or services you used to provide, the quality needs to stay consistent. Without oversight during that period, trademark rights can actually be lost. That’s called naked licensing, and it’s something you want to avoid at all costs. RECORDING THE ASSIGNMENT Federal Marks To make the transfer legally solid, you’ll need to record it through the USPTO Assignment Center. Right now, it costs $40 for the first trademark and $25 for each additional one in the same document. You have three months from the assignment date to record it to protect against third-party claims. Texas Marks For state trademarks, the process goes through the Texas Secretary of State. The fee is $25, and Texas gives you 90 days to record the assignment. That’s different from the federal timeline, so don’t mix them up. Common Law Marks Since these aren’t registered anywhere, there’s no official filing to do. Just make sure your agreement clearly spells out the transfer and ties it to goodwill. That’s your legal foundation for common law marks. A FEW EXTRA LEGAL PROTECTIONS Include standard contract language too, such as Texas law as the governing law, a venue for disputes, integration clauses, and a method for resolving disagreements. You might want to get the agreement notarized. It’s not legally required in Texas, but it adds a layer of security. If you're staying involved during the transition and helping the buyer keep up with trademark deadlines, make sure that’s written into the deal. COMMON PITFALLS TO AVOID Don’t treat all your trademarks the same. Some may be federal, some state, and some common law. They each need different handling. And never forget the goodwill piece. Without it, your trademark transfer isn’t valid. Also, make sure you stay on top of deadlines. You have three months to record federal assignments and 90 days for Texas. Missing either one could leave the buyer exposed to claims from someone else down the road. THE FINAL ANALYSIS Getting this agreement right helps avoid future disputes and protects the trademark value you’ve built over time. Trademarks are often one of the most valuable pieces of a business, so it’s worth taking the time to spell out exactly what’s being transferred, what the responsibilities are, and what happens next. Because trademark law is detailed and the consequences of mistakes can be serious, it’s smart to work with an experienced IP attorney. They’ll help you match the agreement to your specific situation and avoid costly errors. Mistakes in this area can lead to total loss of rights. If you've built a brand worth selling, make sure it's protected when you pass it on.

The terms of your specific agreement are the most important factors to consider. In general, an invention assignment agreement usually means that an employee gives the company any ideas or inventions they come up with while working. The rules can vary by agreement, but they often cover ideas made during work hours, using company resources, or related to the company’s business. In Texas, an agreement can apply to inventions made outside of work hours if they’re related to the company’s business or came from work the company assigned. In one case, the agreement said the employee had to give up all inventions made during or after regular work hours, whether on or off the job, if they were related to the company’s business or came from work the company assigned. Usually, an invention assignment agreement doesn’t apply to ideas that aren’t related to the employee’s job unless the agreement says otherwise. In Atlas Brick Co. v. North, 2 S.W.2d 980, the court said that the title to an invention wouldn’t belong to the employer unless the agreement said that ideas made and perfected under the employee’s contract of employment belong to the employer. Also, if a discovery is made outside the scope and purpose of employment, it belongs to the employee unless there’s an agreement to give up such inventions to the employer. So, it all depends on the terms of the invention assignment agreement. In the case of Halliburton Energy Servs. v. Axis Techs., LLC, the agreement required the employee to turn over all materials related to inventions created during employment, making them the company’s property. But, if the agreement doesn’t cover certain inventions or if the inventions are made outside the scope of employment without using company resources, the employee might still retain ownership.

Yes, you can achieve this through an IP license agreement versus a sale of your IP rights. In your license you would want to protect against gray market product manufacturing and also have provisions on how to handle defective products and components during the manufacturing process. I am available for a free consultation if you would like.

Whether you need a Work For Hire Agreement really depends on the project and what both sides are trying to get out of it. You’re not automatically required to sign one, but saying yes or no to that clause can completely change who owns the work and what rights you’ll have moving forward. Just because a client calls something “work for hire” in a contract doesn’t mean it actually qualifies under the law, especially when it comes to freelance design work. Here’s the thing. Under U.S. copyright law, “work made for hire” is a specific exception to the general rule that the creator owns the work. For a freelance project to qualify, two conditions have to be met. First, both parties need to sign a written agreement that says the work is considered “made for hire.” Second, the type of work has to fall into one of nine defined categories under 17 U.S.C. § 101. These include things like contributions to collective works, audiovisual pieces, instructional texts, or compilations. The list is pretty narrow. Standard marketing materials, logos, brochures, or campaign graphics usually don’t make the cut. Courts take a strict approach here, so just checking a box in a contract doesn’t magically make it enforceable. If your project doesn’t meet both requirements, labeling it “work for hire” doesn’t hold legal weight. In that case, the default is that you, the designer, own the copyright unless there’s a separate written agreement transferring it to the client. That leads us to ownership. If there’s no valid Work For Hire clause and no assignment of rights, you retain full copyright. That gives you control over how the work is used beyond whatever license you’ve granted. So if you created a logo and the contract only licenses it for digital use, the client can’t later slap it on T-shirts or license it to a partner without getting your permission first. But if there is a valid Work For Hire clause or an explicit copyright assignment, then the client becomes the legal owner. That means they can use it, change it, resell it, or do whatever they want with it, without needing to pay you again or ask for further approval. You’d have no say over how the work is used, and unless the agreement gives you permission, you wouldn’t even be able to include it in your portfolio. If you want more flexibility, there are alternatives. You can structure the deal with a copyright assignment that still reserves certain rights for you. For example, you could keep the right to show the work in your portfolio or limit resale to direct competitors. Or you could stick with licensing. An exclusive license gives the client broad rights but you still own the work. A non-exclusive license is more limited and usually makes sense for templates or assets used with multiple clients. Portfolio rights, by the way, are often negotiable. Even in exclusive arrangements, you can add a clause that lets you show the work on your website, social profiles, or print materials. Just make sure it’s clearly spelled out. Some corporate clients won’t allow it at all unless it’s written into the agreement. From a practical standpoint, your decision should take into account how much you’re getting paid, how the work will be used, and whether you want to reuse or showcase it later. If you’re giving up all rights, price accordingly. Clients pushing for Work For Hire terms often just want clean, uncomplicated ownership, especially for branding or long-term use. But that doesn’t mean you can’t negotiate. You might agree to transfer ownership only after full payment is received. You might keep the right to use rejected drafts. You might even allow Work For Hire treatment for the final deliverables but retain some creative rights behind the scenes. Also, keep an eye out for boilerplate clauses. Some clients include Work For Hire language by default, not realizing their project doesn’t meet the legal standard. Just because it’s in the contract doesn’t make it enforceable. If the work doesn’t meet the criteria, the clause won’t hold unless there’s a separate valid assignment of rights. When in doubt, it’s smart to run the agreement by an attorney who understands copyright law and freelance creative work. Contracts Counsel connects you with attorneys who handle exactly this kind of issue.