Reading time: 5 minutes

Intellectual property (IP) is a vital part of every business’ assets. IP can include trade marks, trade secrets, copyright or patents. Like any asset, you can commercialise, license or sell your IP for profit. It is important to consolidate these assets and ensure that you assign or license your IP appropriately. This article will outline the three major differences between licensing your IP through an IP licence and assignment agreement.

The Interest Vested in the IP

One of the major differences between an IP licence and assignment is the interest in (or right to use) the IP.

Licensing IP

When licensing IP to another (the licensee), you are granting permission for them to use your IP under certain conditions. You retain the interest in the IP you are licensing. These sorts of arrangements are outlined in a licence agreement which articulate both parties’ rights in the licence agreement.

The IP licence agreement will address:

  • territory restrictions;
  • the period that the agreement will last;
  • whether the licence is exclusive or non-exclusive;
  • the right of inspections;
  • the nature of the IP (i.e trade mark or patent);
  • confidentiality; and
  • termination and dispute resolution for a breach.

Assigning IP

Assignment is different from licensing because it is a permanent transfer of ownership from one owner to another. Therefore, as the original owner of the IP, your interest in the IP will cease once you have assigned it.

For some IP, like trade marks, you can transfer the right to use partially or in full. 

For example, a trade mark is registered for a certain number of classes for specific goods or services. Partial transfer of ownership may not include all of these goods and services. When assigning IP, it is important to ensure that you have appropriately covered all rights for exploitation.

Licensing IP Assigning IP
Interest is granted under certain conditions, but the original owner retains ownership. Ownership is transferred wholly or partially to another party.

Assignment of IP Must Be in Writing

Licensing IP

An IP licence agreement does not necessarily need to be formalised in a written document. A licence agreement may exist if all parties involved behave such that a licence could be implied. The law has certain provisions that facilitate the existence of these relationships without the existence of a written agreement.
Even though a licence agreement can exist without written documentation, we would recommend formalising licence agreements in writing to avoid confusion or disputes further down the track. 

Assigning IP

In contrast, an assignment of IP is permanent and irrevocable. On this basis, a transfer of ownership must be in writing. If it is not, the transfer will not be recognised. Furthermore, for certain IP that requires registration (e.g. trade marks and patents), you must also file the transfer through IP Australia.

Licensing IP Assigning IP
Does not need to be documented in writing and can be implied by law to exist based on each party’s actions. Must be in writing and may need to be submitted to IP Australia, depending on the type of IP.

Notification of IP Licence Vs. Assignment IP

Licensing IP

When you licence your IP, you do not need to notify IP Australia of the licence. It is a private agreement between you and the licensee. Because of this, the onus is on you to keep track of: 

  • every licence that you are a party to; and 
  • the rights conferred by each agreement.

Assignment IP

When you assign IP to another owner, the assignee will need to file an application for transfer of ownership through IP Australia. Next, the Registrar at IP Australia will review the application and update the register accordingly. Once the Registrar at IP Australia receives the form with the records of assignment, the assignee is officially the owner of the IP. Once the assignment is published by IP Australia, the Registrar is obliged to notify any other relevant person.

However, not all IP appears on the Register. As such, not all IP assigned in an agreement needs to be reported to IP Australia. You must report the assignment of the following types of IP to IP Australia:

  • trade marks;
  • patents;
  • designs; and
  • plant breeders’ rights.
Licensing IP Assigning IP
Does not need to be filed to IP Australia. Must be filed to IP Australia if it includes registered IP, such as trade marks, patents, designs or plant breeders’ rights.

Key Takeaways

As indicated above, there are a number of differences between an IP licence and an assignment. These differences are important to remember if you want to make the most out of your hard-earned goodwill and brand recognition. The major difference between a licence and an assignment is that you will generally not have any interest in your IP if it is assigned to another party. A licence will ensure that you retain some interest in your IP and that it is used according to the terms you have set. If you have questions about licensing or assigning your IP, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page. 

Webinars

Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

Online
If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Online
Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Online
Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Online
Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Online
Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Online
Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Online
Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

Online
As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards