Overview of an IP Assignment Agreement

What is IP Assignment Agreement?

IP Assignment Agreement is the process of transferring ownership of the Intellectual Property (IP) rights in a work from the creator to another person, company, or institution (usually acquiring companies).

Intellectual property rights include patents, trademarks, designs, copyright, goodwill, and confidential information (also extending to trade secrets).

What are the three main types of intellectual property?

Intellectual Property rights refer to the exclusive rights that attach to intangible human creations. IP protection is important to innovators, artists, and business owners. In fact, it is even more crucial for startups, as your IP may be your most valuable asset in the early stages of your business. These are the 3 most popular intellectual property types.

Trademark: Trademarks are words, designs, or phrases that serve as “the brand” for a product or service. The owner of a trademark has exclusive rights to use the distinctive sign in connection with the products and services offered.

Patents: Patents can be obtained for ideas or concepts which are novel and non-obvious that provides a new solution to a problem. These typically include inventions such as products or processes and usually last for 20 years.

Copyright: A copyright can be used to protect creative expressions such as writing, music, or video. It is not necessary for the work to have aesthetic value. Examples of works that may be protected under copyright law include music, artistic works, films, and literary works, etc.

How do I transfer my IP?

Depending on the relationship between the creator and the intended owner, Intellectual Property Rights do not necessarily transfer. Whilst ownership of the work created in the course of employment by employees is generally implied to belong to the employer, the same is not automatically true for creations by freelancers or consultants.

In these cases, the assignment of IP rights should be stipulated within the original contract or can be transferred by signing an IP Assignment Agreement.

For example, a co-founder may have built an application before the formal establishment of his company and now wishes to transfer the intellectual property rights to the company. He should sign an IP Assignment document in order to assign the rights associated with that software. This document will specify the name and details of the software, and all the relevant details for the transfer of the rights.

What should an IP assignment include?

These are the important things to include in an IP Assignment Agreement.

Introduction to parties: Clearly indicate the parties involved in an IP assignment. I.e.; assignor and assignee. An assignor is a party who transfers the right to another party known as an assignee.

Assignment of Intellectual property: The creator of Intellectual property should disclose all inventions, ideas, and work-related information while transferring the IP rights to another entity.

Warranties: While transferring the IP rights an assignor must represent and warrant that he/she is the sole owner of that IP and has full authority to transfer it. While the assignee should be capable to pay for the IP rights.

Why IP assignment agreement is crucial for an organization?

The assignment of intellectual property rights to the company is important for the following reasons:

Proper management of the business: After the company has been established the employee, founders, or consultant working on a project should assign the IP to the company because the startup is now the company entity, rather than you and your co-founders as individuals.

Preventing Conflict: Startup founders need to assign their IP to the company because in case of a co-founder exits this will create a threat for your business. If your co-founder exits and no IP assignments have been assigned, your co-founder will take your valuable IP with them. This would leave your business with no capability to move forward.

Risk on Raising Capital: In the process of raising capital for the business, the investors often come on board as co-owners and shareholders of your company. Investors will proceed with due diligence to investigate whether the investment is sound. Owning the Intellectual Property rights underlying the assets of your business will form part of the evaluation of your business.

Risking a Future Acquisition: Conforming IP rights will also be an essential factor if another company is interested in having your business. If the investigation process discovers that IP was not completely assigned to the company founders, this may damage the acquisition.


An IP Assignment Agreement ensures that IP is assigned properly from one entity to another with adequate rights to use those IP for commercial as well as non-commercial purposes.

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