Does your business have valuable intellectual property (IP)? IP is a vital business asset for a modern business, particularly for innovative or creative businesses. When you own copyright and register your trade mark, you have valuable rights that you can use to make money and grow your business.
This article is part 4 of a 5-part series on how to protect and monetise your IP. Part 1 looks at copyright. Part 2 discusses trademarks. Part 3 explains how to license your IP and Part 5 will focus on protecting your IP from ex-staff.
What is the difference between assignment and licensing?
When you license IP, you retain ownership of the IP rights. You give permission to another business to use your IP and you set the terms. For example, you can license another business to develop the idea, to manufacture the product, and to market and sell the product or service.
When you assign your IP rights (including your copyright), you sell the rights to your work. You transfer ownership and you cannot use your work again. You cannot impose terms and conditions on use of the work.
This is common when you are employed (or contracted) to create a specific work for another business. Another example is that writers often assign the copyright in their screen play to a production company. This gives the production company full rights to use and adapt the screen play, being the creative work.
How do I assign my IP?
An assignment must be in writing. It is wise to obtain professional help on writing the IP assignment agreement, to ensure that you clearly and correctly describe the IP that you are assigning, so you do not inadvertently assign more IP than you meant to.
What are the key issues to consider?
If you assign your IP, you cannot use it again. You need to sell it for a price that takes into account your skills, your depth of experience, your costs to develop the IP, your profit, and the potential market value of the IP.
The buyer may want to pay royalties over time, rather than a lump sum. The risk is that you do not know if the idea will be taken to market, how long it will take, or if it will sell successfully. If it does not launch, you may receive no royalties. However, if it is very successful, you may receive far more royalties for the assignment than if you had been paid a lump sum payment.
If you develop and assign IP, you can attract large corporate clients who want to own and develop your IP. You can build a lucrative business based on your creative expertise.
An IP professional will assist you with the IP assignment licenses, and will give you a market perspective for your industry on the size of fees, and how the fees are structured, including as a lump sum payment or royalties.
If you need assistance assigning your IP, get in touch with LegalVision today and speak with one of our IP specialists. At LegalVision, we work solely on fixed-fees, so get a quote today!