Intellectual Property (IP) is a valuable asset for your business. You can register or protect your ideas and your brand through copyright, trade marks, patents and design. Most businesses overlook IP protection however, it should be a core component of your business and marketing strategy. Below, we explore two ways to leverage the commercial value of your IP with an intellectual property (IP) licence or assignment.

IP Licencing

If you are the owner of the IP, you are the licensor and have the right to licence your IP to a licensee. Licensing ensures that the ownership remains with the licensor. 

The terms of the licence will be mutually negotiated and agreed to as it is in both parties’ best commercial interests. The terms of the licence govern the relationship and can include the payment of rights in the form of royalties for the use of the product and period.

Types of Licenses include: 

  • Exclusive: The owner of the IP can grant only one licence and not use the IP themselves.
  • Non-Exclusive: The owner of the IP can grant more than one licence and use the IP themselves
  • Sole: The owner of the IP can grant only one licence but can use the IP themselves.

IP Assignment

An IP assignment unlike licensing is an irrevocable and permanent transfer of IP. It is the sale or transfer of IP ownership from an owner (assignor) to the purchaser (assignee). It can be arranged by deed or agreement, which can transfer present or future rights in IP in exchange for a lump sum payment.

Why Assign or Licence Your IP?

Do you want to commercialise your IP? Do you want to manufacture, market or distribute your IP? If the answer is no, you may want to think about assigning or licensing your IP. We set out some further uses below. 

Development

Assignment or Licensing IP can allow investors to invest in IP without having to worry about the expensive and time-consuming development phase.

Manufacturing and Distribution

You can have your IP exclusively manufactured or distributed by licensing the rights. This allows control over those who manufacture or exploit your IP, as well as distribution areas while you enjoy the royalties.

Commercialisation

IP Licensors may like to use an exclusive licence to commercialise and exploit their IP. They will gain royalties and the rights to the product without being concerned with the process or marketing required in the exploitation phase. 

IP Holding Company Structure

Large multinationals often set up and use a holding company as a means to protect their IP. This structure requires the assignment of IP to the holding company which will in turn licence the IP to subsidiary companies.

Employment

An employer should use an employment contract that ensures employees assign all IP they create during their employment to the business. If this is not set out in a contract, an employer can also ensure that employment is terminated should IP be misused.

Universities

Most universities require Honors or Ph.D. students to assign current, and future IP to protect any work created. Universities typically enter into agreements to allow for co-ownership of patent-worthy inventions and to share profits. 

Is Licensing or Assignment Most Suitable for Your Business?

The difference depends on the payment structure. If you choose to licence your business’ IP, you will have a flow of royalties for the use over an agreed period. If you decide to assign your business’ IP, your will receive a lump sum. It is up to you which option has the most commercial value for your business.

***

If you have any questions or need an IP licence or assignment drafted, get in touch with our IP lawyers on 1300 544 755.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Sophie Glover
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy