Key Takeaways

  • An IP transfer (or assignment) legally shifts ownership of intellectual property from one party to another.
  • Ownership must be clearly established—especially in employer/employee and contractor relationships.
  • Assignments must meet legal and jurisdictional requirements, including specific forms or notarization.
  • IP transfer agreements can cover various rights (patents, trademarks, copyrights) with country-specific limitations.
  • Recording the assignment protects the assignee’s right to enforce or monetize the IP.
  • IP transfers are commonly used in M&A deals, startup investor negotiations, and licensing transactions.

The transfer of intellectual property can seem like a difficult process due to the intangible nature of the property. One of the most important things to remember when transferring IP is that you cannot transfer what you do not technically own. 

By creating a license or assignment, you are essentially promising to transfer your ownership rights of the intellectual property. These agreements can often be necessary due to the fact that employees may believe that they own the rights to the intellectual property they create, while the employer may feel they own it as part of the employee's scope of work. 

The rules regarding employee ownership of intellectual property can vary by the type of property that is being protected. In general, the employer will own all

  • Copyrights
  • Patents
  • Trade secrets
  • Trademarks

This ownership extends to work that was specifically created during the course and under the scope of the worker's employment.Since the rights of ownership typically have to do with the employee/employer relationship, the general rules do not necessarily apply to independent contractors that work for the company. The rules and laws of intellectual property and ownership can be complex, so if you are trying to obtain rights for work by an independent contractor, it is best to contact a lawyer before attempting to transfer the intellectual property yourself. 

Intellectual property copyrights are extremely important in the growing global economy. The rights were created to help encourage businesses to invest in both innovation and marketing, which are the foundations of capitalism. Intellectual property is so important that it is often traded and used to secure investors and financing.

What Is the Assignment of Intellectual Property Rights? 

An assignment to intellectual property rights refers to the act of transferring ownership from the assignor to the assignee. The document that creates this transfer is often referred to as the "assignment."

The two parties entering into the assignment can either be legal entities or individuals. The assignment will include language in which the assignor will transfer over their intellectual property rights such as:

  • Patents
  • Trademarks
  • Industrial Designs
  • Copyrights

The rights can be full rights or can have limitations to what the assignee is allowed to do or gain from the intellectual property. When intellectual property is transferred, it is most often done for one lump sum of royalties. 

When creating an assignment, it is essential to include all of the rights on a country-by-country basis to make sure that each of the country's national assignment requirements are met. Most intellectual property can be freely transferred by an assignor. 

In some cases, you can also execute a nunc pro tunc which will assign the rights over to the other party with an earlier date than the assignment was executed. The date will need to be specified in the agreement. 

Types of IP Transfer Agreements

IP transfer agreements generally fall into two categories: assignments and licenses.

  • Assignments involve the full transfer of ownership rights from the assignor to the assignee. The assignor relinquishes all rights and interests in the intellectual property.
  • Licenses, on the other hand, allow the licensor to retain ownership while granting the licensee limited rights to use the IP under specified terms.

Both types of agreements should define the scope, territory, term, and permitted uses of the intellectual property involved. Additionally, in commercial settings like mergers and acquisitions, asset purchases often include the assignment of key IP assets, which must be documented and registered accordingly.

Common Situations Requiring IP Transfer

IP transfers are critical in various business scenarios, including:

  • Startups and funding: Investors often require founders to transfer IP into the company to avoid ownership disputes.
  • Mergers and acquisitions: A company acquiring another typically includes intellectual property as part of the asset purchase agreement.
  • Employee and contractor relationships: To avoid ambiguity, employment contracts and independent contractor agreements should include IP assignment clauses to ensure the business owns any work-related creations.
  • Joint development projects: Collaborative projects may lead to shared IP ownership unless clearly defined by an agreement. An assignment ensures that one party retains or receives full rights.

What Does a Valid Assignment of Intellectual Property Rights Require? 

The laws for transferring intellectual property will vary from country to country and be subject to a wide range of rules depending on the national, regional, or international authorities where it is recorded. Since country regulations can vary as well as the type of intellectual property being assigned, it is virtually impossible to have a single set of regulations. The best thing to do is seek out a national representative where you are performing the transfer to ensure that you are complying with all necessary rights. 

Governing Law and Jurisdiction Issues

Because intellectual property laws vary between jurisdictions, a valid IP transfer should always specify:

  • Governing law: This defines which country or state’s laws will apply to disputes.
  • Jurisdiction: This defines where disputes will be resolved.
  • Country-specific requirements: Some jurisdictions require additional documentation, notarization, translations, or registration of the assignment. For instance, certain patent offices mandate filing an assignment separately to reflect the new owner in the register.

Failing to meet these jurisdictional nuances can delay enforcement and leave the IP vulnerable to challenges.

What Are Typical Form Requirements for Assignments?

While it is hard to find a one-size-fits-all agreement, there are some basic rules and requirements that should be followed when creating an intellectual property agreement. You should always:

  • Put the assignment in writing
  • Require both the signature of the assignor and assignee or authorized signer for either party
  • Have it signed in ink
  • Keep the originals stored in a safe place
  • Get it notarized if the county requires it
  • Use a specific form if the county dictates

Best Practices for IP Transfer Agreements

To ensure a smooth and enforceable transfer of intellectual property rights, follow these best practices:

  • Conduct IP due diligence: Verify the assignor's ownership and any existing licenses, liens, or encumbrances.
  • Include clear definitions: Be precise about what is being transferred—e.g., trademarks, patents, trade secrets.
  • Use consistent language: Avoid ambiguity with terms like “sell,” “assign,” or “transfer,” as mislabeling can void the agreement.
  • Register with relevant authorities: For patents and trademarks, recording the transfer with the U.S. Patent and Trademark Office or equivalent foreign offices is often required for enforceability.
  • Retain backups: Keep signed and timestamped copies of all agreements, including any amendments or related documents.

Why Are Assignments Important? 

The proper assignment of intellectual property is important to ensure the timely recording and transfer of rights. It is also essential for claiming priority rights. As soon as an assignment has been recorded the assignee may begin exercising their recently obtained rights. 

Frequently Asked Questions

1. What is an IP transfer? An IP transfer is the legal process of transferring ownership of intellectual property from one party to another, typically through an assignment agreement.

2. Can independent contractors retain IP rights? Yes, unless a contract explicitly transfers the IP to the hiring company, independent contractors may retain rights to their creations.

3. Is it necessary to record an IP assignment? Yes, especially for patents and trademarks. Recording ensures the assignee’s ownership is recognized and enforceable against third parties.

4. What happens if IP isn’t assigned correctly? The original owner may retain rights, leading to disputes, lost revenue, or inability to enforce the IP.

5. Can IP be partially transferred? Yes. Agreements can grant only specific rights (e.g., exclusive use in a territory) rather than full ownership.

If you need help with the transfer of intellectual property, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.