Brief Introduction About the Intellectual Property Agreement
Intellectual property is the inventions or mind creations of any form; it can be artistic, design, related to literature, symbols, or images used in business. Any intellectual property can be protected from being copied with the help of intellectual property policy, like creating copyrights, patents, etc. These intellectual property policies and laws permit the inventor of that intellectual creation special rights for utilizing and benefiting from their creation and are called intellectual property rights or IPRs (“IP Agreement – Doc | Laws.com,” 2019). There are four kinds of intellectual property rights; trade secrets, trademarks, copyrights, and patents.
There are two kinds of intellectual property agreements; intellectual property assignment and intellectual property licenses. An intellectual property assignment agreement is a formal contract that permits the ownership transfer of any intellectual property from one to the other. In an intellectual property license agreement allows a specific person or entity to act on it without violating the IP rights of the owner (“IPAgreement – Doc | Laws.com,” 2019). There is also an employee intellectual property agreement.
Who Takes the Intellectual Property Agreement?– People Involved
An IP agreement is between two parties; one party would be the provider of the defined intellectual property, and the other would-be receiver of this intellectual property. In the intellectual property assignment agreement, it is signed between the grantor and the grantee of the intellectual property.
Purpose of the Intellectual Property Agreement
The purpose of having an IP agreement be it for licensing or assignment is to encourage the creation of innovative IPs, the preservation of these IPs, and also the exploitation of them by the creators for maximum benefits. Such agreements assist the IP creators to either transfer the ownership or provide license of a specific intellectual property to the firm or an entity that is in the best form to extract the best out of it. Such written agreements are critical as they act as a protection of the rights of these fostered innovations (“What is an Intellectual Property Assignment Agreement?”, 2019). These agreements help focus more on research and development by providing the best protection to such ideas and to reap the best benefits out of them.
Contents of the Intellectual Property Agreement– Inclusions
The intellectual property agreement includes the following: –
- Name – This includes the name of the first and the second party involved. It can be any business and the intellectual property owner between whom the agreement is being signed.
- Address – This includes the address of the first and the second party involved. It can be any business and the intellectual property owner between whom the agreement is being signed.
- Witnesses – The name, address, and signature of the witnesses of the IP agreement need to be mentioned.
- Date – This is the date of the agreement on which the agreement is signed by both parties.
- Term Definition – It defines the period of the agreement between both parties.
- Intellectual Property Definition – Here, the intellectual property is defined in detail for which the licensing or the assigning needs to happen. It also includes any tangible invention, designs, discoveries, etc. that take place within the agreed duration.
- Intellectual Property Assignment or Licensing – In this the grantor assigns or licenses the other party the intellectual property as defined above, the intellectual property rights covering the IP and all the action clauses or intellectual property protection contract clause added to the signatories with respect to the intellectual property license of the intellectual property assignment (“Intellectual Property Assignment Agreement Template [FREE Sample]”, 2019).
- Intellectual Property Rights – All the patents, copyrights, trade secrets, trademarks, or any such right under the laws and regulations.
- The objective of the agreement – It gives the reason for which this agreement is being signed
- The actual license or assignment – The grantor here licenses or assigns the intellectual property stated above to the second party or company involved and also the rights and interests in the intellectual property.
- The license or assignment time – The grantor agrees to assign or license any innovation created during the agreement time.
- Moral rights – The grantor agrees to the interference by the second party of any moral rights that the grantor may have in his intellectual property.
- Warranty Clauses – There are various warranties included in the agreement which the assignor warrants and represents like; it is the sole owner of the property, the intellectual property has not been licensed to any third party, the assignor has no association with any third party for this intellectual property which might contradict this agreement, etc.
- Exclusions – This involves any exclusion if required from the necessary intellectual property clauses mentioned in the agreement.
- Confidentiality – It is also known as a non-disclosure clause; this clause in the IP agreement states that both parties are bound to not disclose any of the information in this agreement to any third party.
- Plan of Action– Here the grantee defines the business plan in detail to commercialize the obtained rights
- Warranty – In this part, the grantor provides warranty to the grantee for any losses incurred as the IT is experimental
- Signature – This acts as the acknowledgment of the terms of the agreement and prevents any forgery.
[ Also Read: Trademark Transfer Agreement ]
How to Draft the Intellectual Property Agreement?
Common points to be kept in mind while drafting an IP agreement are as follows:
- The intellectual property must be defined very specifically and clearly, that is, either being assigned or licensed (“How to draft an Intellectual Property License Agreement,” 2019).
- Duration of the assignment or licensing – The statutory life cycle of these intellectual property rights to be considered while defining the agreement duration. Which party would pay the renewal fees of the IP rights that should be thought of before?
- Compensations and warranties provided by the assignor or the licensor must be mentioned in the agreement concerning the intellectual property.
- Deal with termination- The scenarios must be explicitly stated in which the assigned rights might be reverted, or the license be canceled (“Intellectual Property Assignment Agreement Template [FREE Sample],” 2019).
- It is important to specify the treatment of associated moral rights
- After documenting the IP agreement, it is vital to proofread the document. This helps in validating the details in the contract.
It is very critical to negotiate the intellectual property clauses in intellectual property assigning or licensing agreements. It is essential for both parties to investigate and comprehend the part that intellectual property would play in the deliverable of the agreement.
The owner of the intellectual property holds the rights over its content; hence, these rights give them an upper hand while negotiating the IP agreement clauses. It is important to understand that the grantor here has higher leverage here; he is the one who understands the true core value of the intellectual property owned. The grantor must be very open-minded while negotiating the terms of this IP agreement.
Benefits & Drawbacks of the Intellectual Property Agreement
Benefits – One of the benefits of having the rights to intellectual property is that it gives you the ability to assign them or license them to someone capable for some period (“How to draft an Intellectual Property License Agreement,” 2019). Thus, such agreements help the IT rights owner to put its IP to practical use and thus benefit from it. Assigning or licensing intellectual property can be beneficial in the following ways:
- Helps the owner to put the IP into practical use
- Owner is saved from incurring the manufacturing cost
- No distribution cost for the owner
- A convenient way to put the intellectual property to use
- Faster launch of the intellectual property in the market
- Risk is shared between both the parties in case of any failure.
- Provides a competitive advantage by faster market penetration through already existing channels (“What is an Intellectual Property Assignment Agreement?”, 2019)
Drawback – The only drawback of having an IP agreement that can be thought of is if it is not drafted carefully before paying attention to all the mandatory clauses in the agreement. It is critical to draft and evaluates all the terms and conditions properly beforehand so that nothing is left out.
[ Also Read: Patent License Agreement]
What Happens in Case of Violation?
In an IP agreement, the licensing or the assignment must happen within the scope of the agreement. If there is any violation of the terms and conditions mentioned in the agreement, it may lead to a breach of the agreement, which results in intellectual property litigation(1). A breach happens when one party does not comply with the agreement clauses, action must be taken immediately without any unreasonable delay as it may be considered as acceptance of the breach. At the time of the violation of the IP agreement, one must claim damages or terminate the agreement basis the clauses mentioned (“What is an Intellectual Property Assignment Agreement?”, 2019).
To conclude, intellectual property assignment agreement or intellectual property licensing agreement is very advantageous for the owner of the intellectual property to make use of his innovation without incurring any expenses for the same. Such agreements also indirectly enhance the need for the creation of such intellectual properties, be it design, artistic, technology-related, etc. and protect them from getting exploited by others.