Intellectual Property (IP) is one of the most emerging areas in law because of its economic exploitation. Some entities or persons may reap the benefits out of an IP on their own while some assign it to other entities or persons in consideration of royalty. The Intellectual Property Assignment Agreement facilitates the whole process by assigning the concerned IP to other through a contractual agreement. These are also known as Rights Agreements/IP Transfer Agreements.
The term “assignment” refers to the transfer of rights vested in the owner of an IP to other entity or person. It is basically a sale and purchase of IP rights. The IP may include copyrights, patents, trademarks, industrial designs or geographical indications. The person who assigns the IP is known as the Assignor and the person to whom such IP is assigned is known as the Assignee. Assignment is different from licensing as the former facilitates the transfer of ownership of such IP for indefinite or limited time period while the latter allows the transfer of limited rights for a particular amount of time and ownership is not actually transferred.
Standard Terms & Conditions of an IPAA
- It should be in writing,
- Requirements of a valid contract to be fulfilled under the Indian Contract Act, 1872,
- Identification of the assignor and assignee,
- Definitions containing general and technical terms used throughout the contract,
- Duly mention the IP to be assigned,
- It must specify all the rights (economic and moral) and obligations assigned to the assignee,
- Mention the liability and warranty in regards to the ownership of such IP,
- Indemnification in case the IP is infringed on a third party’s rights,
- The time duration of such assignment,
- Territorial extent of the assignment,
- Governing law over such agreement and dispute resolution,
- Payment of Stamp Duty on such assignment,
- A lump-sum amount or royalty payable to the assignor,
- Attachment of the list and description of IPs to be assigned.
Important Points to Remember
- Registration of IPAA for copyright is not compulsory.
- IPAA for geographical indication is expressly prohibited by law.
- Non-Payment of Stamp Duty does not invalidate the agreement.
Statutory Law References
- Sec. 2(h) of the Indian Contract Act, 1872
- Sec. 2(4) and 23 of the Indian Stamp Act, 1899
- Sec. 18, 19 & 19A of the Copyright Act, 1957
- Sec. 69 & 70 of the Patents Act, 1970
- Sec. 37 - 43 of the Trademarks Act, 1999
- Sec. 24 of the Geographical Indications of Goods (Registration and Protection) Act, 1999
- Sec. 30 of the Designs Act, 2000
- Sec. 21-24 of the Semiconductor Integrated Circuits Layouts Design Act, 2000
- Sec. 16 & 18 Plant Varieties and Farmers Rights Act, 2001
Important Do(s) and Don't(s)
- Before IPAA, it is better to conclude a Non-Disclosure Agreement in regards to the concerned IP,
- Register the IPAA with the concerned IP office with respect to the type of IP,
- For assignee, it is feasible to analyze the risks and due diligence involved in the assignment of IP so as to verify its ownership,
- Perform a valuation of the IP to be assigned in order to obtain a fair market price.
- Above all, lawyer consultation is necessary to draft the agreement so as to review the legalities.