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An Intellectual Property Agreement (”IP Agreement”), also called an Intellectual Property Transfer Agreement or Intellectual Property Assignment Agreement, consummates and formalizes an agreement between two companies for the purchase and sale of intellectual property rights. The Intellectual Property being purchased can consist of copyrights, trademarks, moral rights, and/or patents. (Moral rights are recognized in Europe, but not the United States. Thus, a transfer of moral rights would only be applicable in an international agreement.) As opposed to an IP License Agreement, the purchaser or assignee in an IP Transfer Agreement takes total and exclusive ownership and control of the IP rights, and is free to use those rights however he or she wishes.
When drafting an IP Agreement, be sure to consider including the following provisions:
1. Assignment and Waiver of Moral Rights. Moral rights, recognized in Europe but not the U.S., involve general rights in respect to the intellectual property. In this provisions, the assignor must irrevocably and in perpetuity waive, in favor of Assignee, all moral rights in and to the transferred intellectual property, including the following:
* a. The right to restrain or claim damages for any distortion, mutilation, or other modification of the transferred IP;
* b. The right to be associate with the transferred IP; and
* c. The right to restrain use or reproduction of the transferred IP
* d. This waiver shall be binding upon the heirs, executors, employees, directors and all successors involved in the creation of the IP.
2. Representations and Warranties. It is important to include a representations and warranties paragraph in the agreement where the assignor promises that it has the full authority to assign the transferred intellectual property, free and clear of any material encumbrances, liens, or claims against the property. The assignor must also promise that it has the full authority to waive all moral rights.
3. Non-disclosure. The assignor should promise, for itself, its officers, directors, shareholders, etc., that it agrees that, except with the assignee's express prior written consent, that it will not disseminate, disclose, or use, or permit to be used, any of the transferred intellectual property, since upon execution of the agreement the IP is property of the assignee.
4. Damages Inadequate. The assignee may want to include a provision whereby the assignee must concede that damages at law by itself may not be an adequate remedy for a breach of the agreement. In the event of a breach, the assignee's rights may be enforceable by specific performance, injunction, or other equitable remedy, as opposed to remedies at law.
5. Assignment of the Agreement. The assignee may wish to require their prior written consent before the assignor is allowed to assign the agreement to a third party.
6. Governing Law. The parties should agree which state will govern the agreement, and if they desire, could include a binding arbitration provision in an effort to seek a speedy resolution to any dispute.
These are the key provisions that must be included in an Intellectual Property Agreement. To read and download actual IP agreements, please visit the agreement section of this website.
Many commercial clients still regard a Confidentiality Agreement or Non-disclosure agreement (NDA) as routine documents that do not require detailed consideration or legal advice. Are you one of them?
They are all the same aren't they?
I must have seen and reviewed several hundred Non-disclosure Agreements in my 11 years in commercial practice. NDAs vary from a half page statement through to a comprehensive 8-10 page document. Usually a two to three pager, or possibly a concisely drafted and formatted one page document, will meet most needs. 80-90% of the clauses will be the same in all agreements and can be scanned quickly when you know what you are looking for; but the 10-20% unique clauses are the ones to watch out for. It is usually these that have the potential to catch you out.
What type of information? For what purpose is it being disclosed. How sensitive is the information? What is the upside? What is the downside? What is the shelf-life of the confidential information? What practical methods are there of securing the confidential nature of the information? Can the obligation be enforced on employees, advisers, holding companies or subsidiaries?
Who bothers suing for breach of an Confidentiality Agreement? Aren't they just symbolic?
There is a widely held belief (which I have some sympathy for) is that the mere presentation of an NDA at the outset of a relationship is more important than the signature itself. Asking the other party to sign an Confidentiality Agreement is a good to way to set the mindset of the recipient. Often this has the desired effect of putting the recipient on notice and reinforcing the duty of care that is then owed to keep the information confidential.
The usual remedy for unauthorised disclosure is an injunction preventing the recipient from disclosing the confidential information. Admittedly the costs of obtaining an injunction may outweigh the benefit of securing one. Once the information is in the public domain it is difficult to persuade a judge to grant an injunction. The remedy then is damages.
I've got better things to spend my time on than negotiating or obtaining a written agreement?
To a practised eye a review of a draft Confidentiality Agreement needn't take that long. A good commercial lawyer should be able to identify the 10-20% and advise of any tweaks that may be required. If your bargaining power is weak, you will at least sign with knowledge of the consequences.