Startup Series Part 4:IP and Design

26/09/2019

Photo by Yizheng Duanmu on Unsplash

 

By Guya Santomauro 

Here we answer some commonly asked questions about different documents start ups require and how to choose the right one for each different scenario:

I have a co-founder who has built a software-as-a-service (Saas) software, and I wish to have the intellectual property rights of this software transferred to the company, which document should I use?

You may be looking for the Assignment of Rights in Software, which is a document for transferring all rights in software. This document will specify the name and details of the software, and all the relevant details for the transfer of the software. 

What’s the difference between Assignment of IP rights and Assignment of Rights in Software?  

The Assignment of Intellectual Property Rights covers patents, registered designs and trademarks (and many other subcategories) while the Assignment of Rights in Software deals (as you might expect) with intellectual property related to software. In most situations it will be quite simple to distinguish the difference between the two. Therefore, one must use an Assignment of Rights in Software whenever the subject matter is a software. Otherwise, an assignment of intellectual Property Rights should be used. 

If my product has users from multiple countries, do I need to list them one by one?

It is better to list as many countries as applicable, to ensure maximum coverage. The more protection an IP right has, the less likely the IP right will be copied by others.   

What counts as “design”?

Design” is the overall appearance of a product. Design results from one or more visual features, including shape, configuration, pattern, and ornamentation. When the visual features are applied to a product, they give the product a unique appearance. To protect a design one must know if they actually own the design. 

If a person owns a design he/she will fall under one of the following categories: 

  • Hired the designer to make the design;
  • Created the design;
  • Was given the design in writing by the designer; and or
  • Employer of the designer. If the design was created by the employee during his course of employment. 

Whenever two or more people own an interest in a design, they must apply jointly. The owner of a design must not necessarily be a person. The owner of a design can be a company, a person, an association and or a partnership. However, when the design is owned by a company, association, and or partnership, the design must not be registered using a trading name or a trust.    

After the ownership of a design is established one must:  

  • Research thoroughly to avoid infringing someone else’s IP, as the design might already exists; 
  • Consider if an IP insurance is needed;
  • Educate their staff on their contractual obligations by making them sign a confidentiality agreement;
  • Consider whether the opinion of an IP professional is needed.  

What contract should we use if we have someone designing our logo for us and we want to make sure that they will release full ownership to us after the work is done?

 The assignment of the IP rights will usually be part of the agreement signed for providing the services. The following documents related to services:

(1) A Freelance Agreement is a short-form contract between a freelancer and a client for the provision of services. It contains a clause for IP. 

A Freelance Agreement can be used in the form of an email, for example, whenever the freelancer and client live in different countries. However, an email should not be used when a freelancer and a client live in the same country.  When working with a local client, for instance, one should have a legally binding, written contract, to help prevent uncertainty. Such a document, a Freelance Agreement, is fundamental, especially when working with one time clients. A Freelance Agreement contract, like the one provided by Zegal includes: 

  • Basic information (name, address…) 
  • The aim of the project (outline of project and aim) 
  • Revisions (how many revisions one offers, and how much it will cost for extra revisions) 
  • Pricing ( price (hourly rates) must be clear) 
  • Deadlines and cancellations (when the product will be delivered and who will pay for the work if the order is cancelled) 
  • Copyright and ownership (section will specifically state who owns the copyright rights) 
  • Choice of law clause (section will state that the two contractors will go to court in case of disagreement) 

(2) A Supply of Services Agreement/Contract is a contract between a supplier and a customer for the provision of specified services. It contains a clause for IP. This contract provides a useful starting point for a variety of different services. The negotiations and services provided by this contract will be adjusted and varied based on each individual contract. It is a very complex contract that should not be constructed without the guidance of a specialist company like Zegal, as it varies constantly. 

(3) A Consultancy Agreement is a contract by which a company engages a consultant to provide services as an independent contractor. It contains a clause for IP. A Consultancy Agreement should be used if: 

    • The scope of the work provided needs to be defined 
    • The terms of payment must be clarified 
    • Intellectual Property needs protection 
    • The business relationship needs to be defined

The Assignment will implement that the transaction is completed by all parties. If one party does not successfully fulfil their part of the contract, the Assignment (contract) will implement the task on the relevant party.

I need to assign Intellectual Property from an entity in one jurisdiction (e.g. HK) to an entity in a different jurisdiction (e.g. Singapore). Can I use one single document originating in one of the jurisdictions, or do I need to create another separate document, originating the other jurisdiction?

The Assignment of Intellectual Property Rights sets out the transfer of ownership between the seller and the buyer of a company’s intellectual property. Since the signing of the document by both represents the two parties in agreement, you will only need one document when assigning intellectual property from one company to another.

Do not

  • Sign two different documents 
  • Allow only one party to sign the document 

Therefore, one should

  • Have both parties sign the document.
  • Ensure there is a mutual agreement from all parties involved.
  • Only one document should be present and signed during all transactions. 

There is an existing mobile app by another company we want to buy over. We are not buying the company, only the project and all the intellectual property of the project. As well as buying the name of the app. Also we want to buy over the complete rights of the IP as an asset. Which document should we use?

Assignment of Intellectual Property Right is the document you should use. 

One must: 

  • Ensure that ones company can comply with all the terms and conditions. 
  • Make all parties to the transaction sign the document.
  • Ensure that there is a ‘meeting of the minds’. Where all parties understand and comply with the terms of the contract. 
  • Ensure that the company selling the IP understands that once the transaction is completed they no longer have any rights over the IP, including the name of the app, and the mobile app. 

Do not: 

  • Base the contract only on a verbal agreement. 
  • Allow only one party to sign the contract. 
  • Make your own company sign the Assignment of IP knowing that the company will not be able to comply to the terms and conditions. 

I will be hiring third parties to deal with translation and logo design etc. In that case, is it appropriate to use the Copyright Assignment (Literary Work) for the translation, and Assignment of IP Rights for the logo?

You could use a Consultancy Agreement, which includes provisions where you can make sure any intellectual property rights in the work done in the course of the agreement will belong to you, regardless of type.

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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RELATED READING: Startup Series Part 3: IP and Employment Agreements

RELATED READING: Startup Series Part 2: Using An IP Assignment

READ MORE: 5 Common Startup Mistakes

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