Intellectual Property Assignment

What is Intellectual Property Assignment?

Intellectual property assignment is a process in which the ownership of a work product created for an entity by an employee or consultant is transferred to the entity.

Typically, an employee or consultant will sign an agreement that explicitly assigns any intellectual property created during service with the company. For the employee, this is called either a Confidentiality and Inventions Assignment Agreement (CIIAA) or Proprietary Information and Inventions Assignment Agreement (PIIAA).

4 Types of Intellectual Property

You should consider 4 of the main kinds of valuable assets under an intellectual property assignment:

• A patent
• A trademark
• A copyright
• Trade secrets

These are all considered valuable assets of a company, and knowing how they work and how they’re created can help protect them.

Here is an article to learn more about intellectual property.

Patents

A patent is granted by the government and gives the owner of the patent unlimited ability to build, sell or use their invention while at the same time preventing others from doing so.

Typically, patents issued have a 20-year life span, but some expire in 14. After this period, anyone else can copy, build, or sell the invention. Any attempt to circumvent this time allowance would result in a patent infringement.

To receive exclusive rights to build, sell or use your invention, you have to provide details about your invention that would allow someone who is “practiced in the arts” to recreate it. Also, there are four requirements for a patent to be issued:

• The subject matter must be “patentable” (as defined by Congress and the courts).
• Your idea must be “new.”
• The idea must be “useful.”
• Your idea must be “non-obvious.”

Additionally, you can file for three different types of patents:

• Utility Patent : Utility patents are granted for inventions or discoveries of useful processes, machines, articles manufactured, the composition of matter, or any new and useful improvements to the above.
• Design Patent : Design patents are granted for any new, original, or ornamental design. This type is valid for 14 years after it is issued.
• Plant Patent : Plant patents are granted to persons who invent, discover, and reproduce any distinct or new variety of plant, asexually. This type is valid for 20 years after it is issued.

Here is an article to learn more about patents.

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Trademarks

A trademark is any word, phrase, symbol, design, or combination that identifies goods or services. The term “trademark” is used for both trademarks and service marks. Still, a service mark is reserved for those services related to the company.

Owning a trademark doesn’t automatically mean you own the words or the phrasing, but rather that you own the rights to how to use that word or phrase concerning specific goods or services. A great example is an online store that tries to use the Nike swoosh mark for their own t-shirts or shoes. This is trademark infringement.

To obtain trademark protection, you must first choose the specific category of goods or services the trademark will cover. This also means the company looking to obtain the trademark must already produce the category of goods/services to be trademarked or have a demonstrative or good faith intent to provide them.

Here is an article to learn more about trademarks.

Copyrights

Copyright infringement is probably one of the most well-known areas of IP protection. Copyrights are obtained to protect original authored works such as:

• Paintings
• Photographs
• Music
• Audio recordings
• Computer programs
• Books
• Blogs
• Movies
• Architectural works
• Plays

Things like titles, names, short phrases, slogans, familiar symbols or designs, lettering, coloring, or a list of ingredients or contents, are not considered creative. Still, they are also included as items that can be copyrighted. In general, copyrights can protect the way you convey a message or expression, but not ideas, procedures, systems, concepts, processes, and discoveries.

Companies can have a record of ownership over copyrights, as the law allows for ownership through “ works made for hire ” or works created by an employee within the scope of their employment.

Here is an article to learn more about copyrights.

Trade Secrets

Businesses have a wide range of confidential information, but not everything is considered a trade secret. Typically, a trade secret refers to information that is not publicly known and involves a reasonable effort to keep it confidential.

It also has to offer some form of economic value to the information holder that would only be beneficial if the information was not known by anyone else. States and even countries have varying laws regarding trade secrets. An excellent way to consider what constitutes trade secrets is to consider what information you wouldn’t want your competitors to get ahold of.

Think about pricing information, marketing strategy, or specific processes used to manufacture your goods.

Here is an article to learn more about trade secrets.

Image via Pexels by Andrea Piacquadio

Does IP Assignment Need Consideration?

An enforceable and valid intellectual property assignment needs to have a valid contract. A contract requires:

• An offer
• Acceptance of the offer
• Proper consideration

Now, what is considered valid consideration could vary. Still, generally consideration “must be ‘bargained for’ and not "illusory’” (Restatement (Second) of Contracts, § 77).

In some cases, small monetary considerations, as well as non-monetary considerations, are enough to create a binding contract, as long as there is an exchange of value between parties.

What is an Intellectual Property Assignment Agreement?

The intellectual property assignment agreement is the document that binds everything together. Companies traditionally use IP agreements to protect their inventions. However, in this arrangement, they are still free to transfer ownership of IP on a case-by-case basis.

It is sometimes called an IP transfer agreement. It ensures that if an employee helps to develop an intangible creation while employed with the company, the company still owns the rights and responsibilities to the creation.

An IP Property Assignment Agreement usually includes the following sections:

• Definition of Intellectual Property
• Intellectual Property Assignment
• Future Intellectual Property Assignment
• Covenants
• Representations and Warranties
• Indemnification
• Assumption of Liabilities
• Severability
• Confidentiality
• Termination; Survival of Certain Provisions
• Successors
• Governing Law and Venue
• Amendment
• Entire Agreement; Counterparts
• Headings
• Waiver

Who Uses an Intellectual Property Assignment Agreement?

Any entity or person can use an intellectual property assignment to protect their original inventions. Still, they can safely transfer ownership of IP when needed.

Example of an Intellectual Property Assignment

Some examples of intellectual property assignments include:

• A New Software Company: A software company working on brand-new proprietary software may assign a technology assignment agreement. This type of assignment protects startup companies before they create the company. The developers may keep certain IP rights in some cases.
• An Existing Manufacturing Company: An existing company involved in manufacturing technology could institute an Invention Assignment agreement for their employees to sign. This gives the company ownership over any relevant intellectual property created by the signing employees.
• New Sub-Contracted Employees: Newly contracted employees could be hired by a company to conduct research or work on new product development. In these roles, a company may ask that they sign an IP Assignment Agreement that assigns back to the company any ideas, work, a product of work, or inventions related to the business created during employment.

Intellectual property assignments are not for the faint of heart. Oftentimes these are multi-layered and complex arrangements that require careful negotiation.

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