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Using An IP Agreement To Protect Your Business (2024 Update)

Key points

  • An Intellectual Property Agreement assigns property rights to someone
  • This helps ensure that legal entitlements belong to the rightful owner
  • They are common when freelancers or other contract workers undertake projects for a business
  • They are also common where business ownership changes but the branding assets remain the same

Introduction

The freelance market has seen steady growth in recent years. Hiring freelancers has many advantages, including lower costs for outsourcing and hiring someone who is a specialist in their field of work. However, businesses need to be careful when hiring contractors to produce creative assets. This is mainly because of issues surrounding intellectual property and who owns it. When someone designs a creative asset, they are the owner. However, the creator of intellectual property will not always be the intended owner, as they may wish to sell or transfer their ownership rights to another person or persons.

In order for another party to have complete commercial rights, the creator needs to assign the intellectual property. One example would be where a business’s logo turned out to still be the property of the contractor. However, if the intellectual property was created in the course of employment, often ownership rights will belong to the employer.

Intellectual Property Agreements

An Intellectual Property Agreement, otherwise known as an IP Assignment agreement, transfers ownership of IP from one party to another, usually for a price. Apart from setting out the transfer in a legally binding contract, it also dictates the rights and obligations of both parties, along with relevant warranties and indemnities. If an owner of a registered patent, trademark, design, or plant breed, wishes to transfer their intellectual property ownership rights to another person, they can do so.

How to use an Intellectual Property Agreement

One main consideration is determining the actual IP which someone is assigning. Specificity is important here to ensure that both parties are clear on what the relevant IP is. Where possible, apart from detailing the IP, include any official registration numbers and dates if possible. It is also crucial to ensure that the future IP rights in the relevant IP are also assigned to prevent any unnecessary claims. Setting a specific date for the assignment removes any confusion of when ownership passes, so the new owner does not accidentally infringe on the previous owner’s IP rights. Depending on the IP, there may be specific clauses that you could add in to ensure maximum protection.

Benefits

It is essential that the terms of that assignment are clear to prevent any potential disputes. An IP Agreement is legal proof that from the date agreed, the recipient owns the IP. The party that transferred the IP has documented proof of the agreed payment for this transfer. More importantly, IP Agreements generally include warranties and indemnity clauses to protect the party receiving the IP. For example, if the seller knows that the IP infringes on a third party’s rights, but still transfers ownership to the buyer, the seller has to indemnify the buyer for any liability or costs relating to it.

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