IP rights are property: they can be sold (assigned) or licensed for value, and may stand as collateral for loans. The actual and potential value which they represent should be protected through registration where that is possible. Key IP rights such as trade marks and designs are registrable and registration in important markets will significantly enhance the ability of your business to make the best commercial use of it’s IP rights. For IP rights which are not registrable – for example, copyright works, database right – careful records of their creation and details of ownership must be kept so that they can be sufficiently identified for assignment and licensing purposes.
How do I maximise the value of my IP assets?
IP rights are valuable commercial assets. They represent the time, effort and money you have spent in building up your business, and in developing new brand and original designs. Their value to others derives from the potential profits to be made from their future exploitation of these rights in connection with sales of goods or services.
Assigning IP Rights
Assigning IP rights means transferring ownership of them to another party. This may be done as part of the sale of the whole or part of the business or by way of a separate sale of certain IP assets such as trade marks. If your business possesses IP rights in different jurisdictions then it may be able to assign rights in certain jurisdictions whilst retaining ownership and control in others. Assignment of IP rights may also occur as part of the settlement of an IP dispute.
Key Considerations - Assignments
Below is a non- exhaustive list of points to consider in assigning IP rights:
- Engage specialist assistance – assignments are legal conveyances which must comply with legal formalities to be effective.
- Consider whether the IP rights extend to overseas jurisdictions – if so the transfer needs to comply with legal formalities in those jurisdictions and it may be necessary to have separate documents of transfer – specialist assistance will be needed.
- Ensure your IP is registered where possible to make transfer more certain, convenient and to enhance the price you can command.
- Ensure the scope and nature of any unregistered rights to be transferred are sufficiently identified.
- Consider whether the IP rights are being sold as part of the sale of the whole or part of your business, or separately.
- Do due diligence and check the owner has legal title to the IP rights offered for sale or transfer and that it is entitled to assign those rights to you.
- Check the IP rights have been protected through registration, and whether they are vulnerable to any third party threats – including pending actions for infringement; pending opposition, invalidity, or revocation proceedings; or whether rights in the IP are diluted due to the owner’s failure to protect or enforce them against unauthorised use.
- Consider whether you intend to purchase the IP rights separately, or together with the sale of the whole or part of a business.
- Ensure you are able to record the assignment in relevant jurisdictions or you may be unable to fully enforce or assert ownership rights against third parties – this requires specialist assistance.
If you need assistance with assignment of IP rights or recording an assignment contact us here.
Licensing IP Rights
Licensing your IP means granting temporary use of it to another party upon set terms.
Licensing can be a valuable commercial strategy; for example, you can license a trade mark you are not using to another party in return for royalties. In this way you commercialise your registered trade mark while protecting it from third party attack for non-use.
You could also license your trade mark for royalties to a third party who is better able to exploit it in an overseas territory and this could serve to extend the reach of your business and brand.
Key Considerations - Licences
Below is a non- exhaustive list of points to consider when licensing IP, whether you are the licensor or the licensee:
- Which IP rights are to be licensed?
- Which territories should the licence cover – and how do exhaustion of rights provisions affect this?
- Does the licensor intend to continue to use the licensed IP, or to grant licences to more than one party?
- Does the licence contain provisions to vest ownership of any rights arising from the use of the licensed IP in the licensor or the licensee?
- How long will the licence last, and what provisions should there be for early termination?
- Will the licensor be paid a set fee, royalties based on the licensee’s profits, or by some other method?
- What restrictions are there about the manner in which the licensee can use the licensed IP, and what quality control provisions will the licence contain?
- Who is responsible for renewing and maintaining the licensed right?
- If use of the licensed IP infringes an earlier right, who is responsible for damages, or legal costs?
- If a third party infringes the licensed IP, who is responsible for taking court proceedings, and who pays the legal costs?
If you need assistance with licensing IP rights contact us here.