Three Differences Between an IP Licence and Assignment

Intellectual property (IP) for a business can include a trade mark, trade secret, patent or copyright. IP can be worth a great deal of money at a time you choose to depart with it, commercialise it or share it. This article will outline three major differences with licensing your IP through an IP licence and assigning your IP – two options on how you can exploit your intellectual property.

One: The Interest Vested in the IP

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

Licensing IP

When you license IP to another (the licensee), you are granting them permission to use your IP in a particular way. You still retain an interest in the property being licensed. This will occur by way of a licence agreement, usually (however see below, under “Two: Assignment of IP Must be in Writing”). The licence agreement will clearly articulate both party’s rights in the licence agreement.

The IP licence agreement will address the following matters:

• Territory restrictions;
• The period the agreement will last;
• Whether the licence is exclusive or non-exclusive;
• Right of inspections;
• What the IP is (for example whether it is a trade mark, design registration, trade secret, promotion materials, customer list, market research, and so forth);
• Confidentiality;
• Termination and dispute resolution for a breach; and
• Other matters.

Assigning IP

When assigning IP to another, there is a transfer ownership from the assignor to the assignee. This is a permanent arrangement, and you cease to hold an interest in the IP once it is assigned.

However, it is of note that trade marks are registered under forty-five classes of goods or services. This is important because trade marks can be registered in a number of these classes. When assigning IP, there is an option to assign a trade mark in whole (thereby transferring all classes it is registered in) or in part (thereby transferring only some of the classes it is registered in).

Two: Assignment of IP Must Be in Writing

Licensing IP

In licensing IP, it does not necessary need to do done in writing. Sometimes implied licences can be invoked by operation of law. This can be appropriately illustrated by the below example.

Let’s say you are commissioned to create copyright material, and there is no written contract in place. In this situation, it is usually assumed that there is an implied licence given to the person who commissioned you to create the material. There is an implied licence upon your payment that the person commissioned you has an implied licence to your copyrighted work. Accordingly, it will be implied that they can use it for the unwritten agreement. (See: Parramatta Design & Developments Pty Ltd v Concrete Pty Ltd [2005] FCAFC 138.)

Assigning IP

An assignment of IP is permanent and irrevocable. Accordingly, to do this properly, the assignment must be in writing. The request also must be filed through IP Australia by completing a form.

Three: Notification of IP Licence vs. Assignment IP

Licensing IP

When you license IP, there is no notification process with IP Australia. It is merely a private agreement between the licensor and licensee.

Assignment IP

When the IP owner assigns IP to the assignee, the assignee will need to file an application for transfer of ownership. This notification must be made to IP Australia. Once the Registrar at IP Australia receives the form with the records of assignment, the assignee is officially the owner of the IP. Once this process is completed, IP Australia will publish the details of the assignment in the Official Journal of Trade Marks. The Registrar is then obliged to notify any other relevant person.

Contact LegalVision’s Intellectual Property lawyers to assist you with your questions. Call us on 1300 544 755 or contact us with the form on this page.