Intellectual Property Assignment Agreement

What is an Intellectual Property Assignment Agreement?

An Intellectual Property Assignment Agreement is a document by which someone releases some intellectual property which they created such as a work of art, a writing, a film. some computer code, or any other piece of intellectual property ("the work") and gives away or transfers all the rights to someone else. This type of agreement is used in situations where the creator of the work ("the transferor") is okay with the work being used for another purpose, and where the transferor is okay with not keeping any rights to the work.

By releasing the rights, the transferor gives up any control over what happens to the work. The person that receives the rights to the work ("the transferee") can then do anything they want with it - including copying it, distributing it, publishing it, or whatever else they would like. This may occur, for example, when a graphic designer (transferor) creates a logo for a client (transferee), and has no intention to use the logo again. They may "assign" the logo to the client, so that the client can use it however they like, including modifying it, printing it on various products, and distributing it to whomever they like.

If the parties are unsure about these matters or need assistance with them, they should seek legal advice.

What is the difference between an Intellectual Property Licence Agreement and an Intellectual Property Assignment Agreement?

An Intellectual Property Assignment Agreement is different from an Intellectual Property Licence Agreement. An Intellectual Property Licence Agreement can be used when the creator of the work ("the licensor") wants to retain some control over the work. For example, they may want to be able to provide copies of work to many different third parties ("the licensees"). This might apply, for example, when a software developer (licensor) creates some software, and lets people (licensees) purchase an annual subscription to use it. The software developer might want to control how people use it, for example, by preventing them from making copies or modifying the code. The software developer might also want to be able to provide copies to many different licensees at once. In these circumstances, the parties may consider using a Intellectual Property Licence Agreement instead.

On the other hand, in an Intellectual Property Assignment Agreement, the owner gives up any control over what happens to the work. The person that receives the work can then do anything they want with it - including copying it, distributing it, publishing it, or whatever else they would like.

Is it mandatory to have an Intellectual Property Assignment Agreement?

No, but if one party is letting another party have or use their intellectual property, then it is crucial in order to protect the rights of both parties. It helps ensure that both parties understand the arrangement, as well as managing risks.

What is an "assignment"?

In this agreement, "assignment" of intellectual property means the transferring of the intellectual property from one party to another.

What is an "assignor"?

The assignor is the owner of the intellectual property. The assignor "assigns" the intellectual property to the assignee.

What is an "assignee"?

This is the person or organisation that receives the intellectual property. The intellectual property is assigned to them from the assignor.

What is not allowed in an Intellectual Property Assignment Agreement?

Conduct that amounts to "anti-competitive" or "cartel" conduct under the Competition and Consumer Act 2010 (Cth) ("CCA") should not be included in this Agreement.

Terms that restrict competition, control prices, limit market access or deter innovation might amount to anti-competitive or cartel conduct under the CCA. Some of these things used to be permitted in IP contracts under the CCA. However, some amendments to the CCA in 2019 changed this, so that some of these things are now prohibited.

Therefore, if the parties have any concerns at all about whether or not they are going to be affected by these laws, they should strongly consider obtaining legal advice. This Agreement is only designed for use among parties which are not engaging in anti competitive or cartel conduct.

What has to be done once an Intellectual Property Assignment Agreement is ready?

Please note that for some intellectual property in Australia, transfers or assignments of the intellectual property need to be undertaken through relevant authorities. For example, in the case of trademarks (eg, logos and other branding), or patents, these are managed by IP Australia. In order to validly transfer a trademark or patent, the parties may need to make an application with IP Australia. In addition, if a business name is being assigned, then this will need to be organised through the Australian Securities and Investments Commission. However, even if the transfer is being undertaken through IP Australia or another similar authority, this Intellectual Property Assignment Agreement should be prepared first, so it can be submitted to the relevant authority as evidence of what has been agreed.

Once this document has been prepared and before it is signed, make sure that both parties (both the party assigning the intellectual property, and the party receiving the intellectual property) receive a copy of the document. Both parties should be given some time to review the document to make sure that their details are correct, that they understand the various terms, and that they are happy with the various terms.

Both parties should then sign the document. If the parties are individual persons (rather than companies) then the document may be set up to have their signatures witnessed by independent witnesses who are aged over 18. The parties cannot witness each other. Both parties should then keep a copy of the document for their own records. If the parties are registering the assignment with a relevant authority (such as IP Australia in the case of trademarks), then they should also make a third copy of the document which can be submitted to the relevant authority.

The parties can then take any further steps as required by the relevant authority. For example, in the case of IP Australia, there is a "change ownership" request form which can be submitted via the organisation's "online services" platform.

Which documents should be attached to an Intellectual Property Assignment Agreement?

It is not mandatory to attach anything in particular to this Intellectual Property Assignment Agreement. However, anything that can help identify the intellectual property may be attached. This could include photographs or images if appropriate.

What must an Intellectual Property Licence Agreement contain?

The following things may be included in this Agreement:

• A description of the work being assigned in as much detail as possible.
• The date when the assignment will take place.
• Any rights that the assignor may retain (such as a right to display a copy of the work in their portfolio).
• Information about applicable fees and payment terms.
• Any applicable warranties.

Importantly, if the assignor is providing a warranty against defects, then the Australian Consumer Law imposes certain requirements on the assignor. This includes requirements that warranty documentation be presented in a certain way, that specific information and wording be included in the warranty documentation, and that the mandatory wording be provided with the product itself (rather than the assignee being referred to information on a website). Therefore, if the assignor is considering providing a warranty against defects, seek legal advice.

Which laws are applicable to an Intellectual Property Assignment Agreement?

There are no laws outlining what must be put into an Intellectual Property Transfer Agreement. Overall, intellectual property in Australia is covered primarily under Commonwealth law, including the Copyright Act 1968.

This agreement is a contract between the transferor and the transferee. Ordinary principles of contract law, as provided by the common law, will also apply.

Since September 2019, some amendments to the Competition and Consumer Act 2010 (Cth) ("CCA") may also impact many intellectual property arrangements in Australia. In particular, the CCA prohibits some conduct which is considered "anti competitive" or "cartel conduct".

If the parties have any concerns at all about whether or not they are going to be affected by these laws, they should strongly consider obtaining legal advice.

By way of general explanation, prior to 13 September 2019, section 51(3) of the CCA provided an exemption for some matters involving licensing or assignment of intellectual property. This meant, for example, that conduct involving licensing or assignment of intellectual property, which might otherwise be considered "anti competitive", might have been permitted.

However, starting on 13 September 2019, with the repeal of section 51(3), those matters involving licensing or assignment of intellectual property may no longer be permitted. The legislation places significant obligations on the parties, and its implications may be quite broad. There is also potential for this legislation to affect some conditions which may be common in many traditional intellectual property arrangements. The penalties for breach of these laws are also very high.

Therefore, if the parties have any concerns at all about whether or not they are going to be affected by these laws, they should strongly consider obtaining legal advice. This Agreement is only designed for use among parties which are not engaging in anti competitive or cartel conduct.

Further information about the changes is available on the website of the Australian Competition and Consumer Commission.

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