Guide to Assigning Intellectual Property Rights By IP Assignment Agreement Lawyers
Why Are IP Assignments Necessary for Businesses?
Key Considerations for IP Assignments
Intellectual property (IP) is personal; it might include your logos, inventions or a book you’re publishing. Your ideas are important to the success of your business, and it is important to have full ownership of these ideas. If you’re a business owner who contracts third parties to help you create intellectual property assets for your business, you need to consider whether that third party has any rights which arise from your arrangement. A third party you worked with in the past could potentially claim partial ownership to the asset(s) which you believe belongs to you. Intellectual property assignments will help avoid issues with contractors and freelancers who have helped create IP assets for your business.
What is an intellectual property assignment?
An intellectual property assignment (often shortened as an IP assignment) is a legal agreement that transfers intellectual property ownership. Intellectual property assignments are distinguishable from licences, which transfer a right to use intellectual property rather than ownership of the intangible asset. You can learn more about intellectual property licenses from our previous articles.
IP assignment agreements are legally binding written contracts which illustrate the terms of the transfer of IP ownership in a creative asset. In a business owner’s case, an IP assignment will transfer the ownership of the IP asset that the third party has created to the business owner.
In legal terms, an IP assignment transfers the IP ownership rights of a creative asset from the original owner –the assignor – to another party – the assignee.
What can go wrong without an IP assignment? An example:
A talented freelance artist is hired by a university lecturer to design a cover for his new book. The lecturer pays the artist for the design work, but they don’t discuss who owns the final cover legally.
Without an IP Assignment:
Even though the university lecturer assumes she owns the rights to the book cover because she paid for it, the artist, as the creator, actually retains ownership under copyright law unless she explicitly transfers the rights. This means:
1. The artist could legally use the book cover for her portfolio or sell others similar designs.
2. The university lecturer may encounter legal claims and/or opposition if she attempts to trademark or alter the book cover without the artist’s consent permission.
3. If the lecturer wishes to use rights to the book as collateral for investment, investors may hesitate to invest due to unclear ownership of the book cover.
4. A publisher will require certain rights from her regarding the book to publish it — such as producing, manufacturing, shipping, and distributing the book, which may pose challenges if the lecturer does not possess rights to the book cover.
Why An Author Should Assign Rights To A Creative Intangible Asset To A Company
Rights remaining with the author of a creative work as an individual can create issues. Assigning intellectual property rights to a creative intangible asset to a legally formed company grants the company the legitimate right to make, use, and sell the creative asset while avoiding the complexities of licensing agreements.
The second paragraph above explains the key distinction between assignment and licensing.
Assigning IP rights to a company also provides liability protection, as a company protects individuals from personal legal risks. Furthermore, public notice of the company's IP ownership aids in enforcing rights and preventing infringement.
An IP asset such as a trademark or patent enhances a company’s balance sheet asset valuation, making it more attractive to investors and lenders. These people often view intellectual property as a valuable intangible asset or loan collateral.
For IP creators concerned about sharing rights with company shareholders, a holding company can be established to own the IP asset while licensing it to the operating company. This arrangement ensures legal protection and financial control.
Navigating the Complexities of IP Ownership:
Our team assisted a client with a similar issue, which you can read about in our case studies here. In this case study, a university lecturer sought our help for the release of a promotional song for a novel she had authored. She collaborated on this project with friends and wanted them to retain joint rights to the work.
We offered guidance on transferring her rights to the book and a collection of short stories to her limited company through an assignment agreement. We suggested that she assign her book rights to her limited company, a structure preferred by publishers and third parties, which will benefit her in the long run. Furthermore, our proactive advice enabled her to secure her rights to the book while allowing her friends to retain their rights to the joint work. Please see our article on the serialisation of books which explains more about the serialisation of works.
Overall, the case study demonstrates how effortlessly an IP assignment guides our clients towards achieving their goals. With an IP assignment from PAIL, the client benefited from our customised services tailored to her specific needs, and the ownership of the rights related to her works was clear-cut.
Why does an IP assignment matter?
Any business owner who contracts third parties needs this for a few reasons:
1. You fully own the IP instead of the third party. Volumatic Ltd v Ideas for Life Ltd [2019] EWHC 2273 (IPEC) concerns a third party attempting to disprove a legally binding contract which assigned IP to the claimant. By proving the certainty of terms and the comprehensiveness of the contract, the court was in favour of the claimant. This proves that IP assignments are indispensable for protecting your ownership rights of IP attached to your businesses and are easy to defend.
2. You avoid future legal disputes with the third party who may claim that they have ownership rights; the case of Fresh Trading Limited v Deepend Fresh Recovery Limited and Andrew Thomas Robert Chappell [2015] EWHC 52 (Ch) regards the demand for unambiguous contracts to ensure this:
When Innocent Smoothies (owned by Fresh) was a small start-up company, an employee of “Deepend” designed the logo. The IP was then assigned to Fresh, the owners of Innocent, with some shares in the company given to the artist. However, this wasn’t clear enough; the contract only assigned a promise to pay the shares, not a legal duty to. Therefore, no shares were ever assigned to the designer of the logo. This case underscores the necessity of clear contracts establishing exact rights demonstrated within our case studies.
3. If you don’t have full IP rights to creative assets, you may struggle to attract investors or buyers, as they typically require proof of ownership.
How do I make sure that the IP is assigned to me?
When dealing with a third party, you must ensure you have an effective contract that clearly assigns the IP in the relevant creative asset to you. An effective contract will clearly describe the transferred intangible asset(s), including registration numbers if applicable.
Secondly, it will outline the extent of the rights being assigned (e.g., full ownership or limited IP use).
Thirdly, section 90(3) of the Copyright, Designs and Patents Act 1988 states that it must be in writing and include a signature. This requirement is unique to IP assignments, as cases such as Reveille Independent LLC v Anotech International (UK) Ltd [2016] EWCA Civ 443 illustrate that simple contracts can be affirmed through conduct alone. However, it is essential to recognise the differences between simple contracts and the more stringent formalities associated with IP assignment contracts.
Lastly, a good IP assignment contract will include warranties confirming that the assignor can transfer the IP. If an assignor falsely claims ownership or the right to transfer, they could be liable for breach of contract or misrepresentation (under the Misrepresentation Act 1967).
It can be challenging to get this right, which is why seeking legal assistance is the most effective way to ensure proper IP assignment of your creative assets. Failing to do so could unintentionally create loopholes that third parties you have contracted with in the past might exploit to take advantage of your business. The complexities in Cayman Music Ltd v Blue Mountain Music Ltd [2022] EWHC 1469 (IPEC) highlight the necessity for precise legal filing to avoid wasting time and incurring significant costs, ensuring your assignment is executed correctly so that others cannot unjustly benefit.
The Cayman Music case concerns the ownership of the lyrics and songs created by Bob Marley. The claimants asserted that ownership had been fraudulently transferred to the defendant, and this formed the basis of their claim. However, the number of songs involved in this case would have unnecessarily consumed too much time in court, which is problematic given the tight schedules that courts maintain. Ultimately, the case was determined to have no connection to intellectual property and was referred to a court that could address fraud.
The issues arising from this case’s filing underscore the importance of industry knowledge when selecting legal representation in correctly taking action against unjust use of IP so that clients receive more efficient service.
How does legal advice from an IP assignment agreement lawyer help?
Our team can assist in drafting, reviewing, and negotiating IP assignments to ensure they are legally valid and protect your business. This way, you can prevent any potential legal issues from attempting an IP assignment without legal assistance. Legal advice will enable you to confidently retain the rights to your IP without interference from third parties.
Junior team members may draft agreements at competitive rates under the guidance of our team leader.
FAQs
“What is an intellectual property assignment?”
An intellectual property assignment transfers the ownership of IP rights from one person to another. The transfer of rights gives the transferee full control over the IP. The transfer begins with a UKIPO form, and more guidance can be found at the official government Intellectual Property Office website.
“What can I do if a third party is trying to claim ownership of IP I thought my business owned?”
Review your contract with the third party to determine if it sufficiently clarifies your IP ownership. If you have any doubts, seek legal advice to discuss the contract, potential outcomes, and future steps.
“Why is IP assignment necessary?”
An IP assignment ensures that any contractor or freelance worker involved in the creation of your business’s intellectual property asset cannot claim ownership. It guarantees that only the business owner may assert the rights to the intellectual property.
“Can I do the intellectual property assignment myself?”
With an intellectual property assignment, making mistakes without legal expertise is easy. You risk assigning property that belongs to you into someone else’s name. Ensure you have a qualified solicitor with expertise in the IP field to assist with IP matters assignment.
“When should I start the IP assignment process?”
When engaging a third party to create IP for your business, ensure that a solicitor drafts a contract for the third party to sign prior to the creation of any IP. The contract will guarantee that any IP the third party creates remains your property
“I’m an individual, not a business – can I still use intellectual property assignment to benefit from the work third parties create for me?”
Yes, individuals can own intellectual property.
Written By Peter Adediran and Maya El-Husseini
11/02/2025
To obtain a quotation, please contact us at (020) 7305-7491 or at peter@pailsolicitors.co.uk. We would be delighted to assist you. Mr Peter Adediran is the owner and principal solicitor at PAIL® Solicitors. Subscribe to our newsletter to get blog post updates and other information about the firm straight to your inbox.
Meet The Team: Peter Adediran; Maya El Husseini; Gabrielle Felix; Poppy Harston
Disclaimer
We provide cases and statutes as general information because contracts should be flexible to adapt to legal changes. Our articles on media and IP agreements serve as starting points for readers to brainstorm ideas. They are not a substitute for professional legal advice. Each contract is unique; even good templates need adaptations for specific situations. One party typically presents a contract based on industry standards and in-house policies. Replacing the contract may be difficult, but you can negotiate important clauses and agree on amendments.