ip assignment agreement employee

This intellectual property agreement  is between , an individual a(n) (the " Assignor ") and  , an individual a(n) (the " Assignee ").

The Assignor has full interest in the intellectual property listed in Exhibit A and described in section 1 below.

The Assignor wishes to transfer to the Assignee, and the Assignee wishes to purchase and receive from the Assignor, all of its interest in the Intellectual Property.

The parties therefore agree as follows:

1. ASSIGNMENT OF INTELLECTUAL PROPERTY.

The Assignor assigns to the Assignee, and the Assignee accepts the assignment of, all of the Assignor's interest in the following in the United States and its territories and throughout the world:

• (a) the intellectual property rights related to the intellectual property listed in Exhibit A ;
• (b) all precursors, portions, and works in progress with respect to that intellectual property and all inventions, works of authorship, mask works, technology, information, know-how, materials, and tools relating to those or to the development, support, or maintenance of those;
• (c) all copyrights, patent rights, trade dress, trade names, business names, other indicia of origin, trade secret rights, trademark rights, mask works rights, and all other intellectual property rights and all business, contract rights, and goodwill in, incorporated, or embodied in, used to develop, or related to any of those; and
• (d) the registrations and applications for registrations of the foregoing (collectively, the" Intellectual Property ").

2. PURCHASE PRICE.

The Assignee shall pay the Assignor a flat fee of $ as full payment for all rights granted under this agreement. The Assignee shall complete this payment no later than .

3. RECORDATION.  

In order to record this assignment with all relevant government agencies, within hours of the effective date of this assignment, the parties shall sign the form of intellectual property assignment agreement attached as Exhibit B . The is solely responsible for filing the assignment and paying any associated fees of the transfer.

4. NO EARLY ASSIGNMENT.

The Assignee shall not assign or otherwise encumber its interest in the Intellectual Property or any associated registrations until it has paid to the Assignor the full consideration provided for in this assignment. Any assignment or encumbrance contrary to this provision shall be void.

5. ASSIGNOR'S REPRESENTATIONS.

The Assignor hereby represents and warrants to the Assignee that it:

• (a) is the sole owner of all interest in the Intellectual Property;
• (b) has not transferred, exclusively licensed, or encumbered any Intellectual Property or agreed to do so;
• (c) is not aware of any violation, infringement, or misappropriation of any third party's rights (or any claim of those) by the Intellectual Property;
• (d) is not aware of any third-party consents, assignments, or licenses that are necessary to perform under this assignment;
• (e) was not acting within the scope of employment of any third party when conceiving, creating, or otherwise performing any activity with respect to any item of Intellectual Property.

The Assignor shall immediately notify the Assignee in writing if any facts or circumstances arise that would make any of the representations in this assignment inaccurate.

6. INDEMNIFICATION. The Assignor shall indemnify the Assignee against:

• (a) any claim by a third party that the Intellectual Property or its use, manufacture, sale, distribution, or reproduction infringes on or misappropriates any copyrights, trade secrets, patents, or other intellectual property;
• (b) any claim by a third party that this assignment conflicts with, violates, or breaches any contract, assignment, license, sublicense, security interest, encumbrance, or other obligation to which the Assignor is a party or of which it has knowledge;
• (c) any claim relating to any past, present, or future use, licensing, sublicensing, distribution, marketing, disclosure, or commercialization of any of the Intellectual Property by the Assignor; and
• (i) the Assignee promptly notifies the Assignor of that claim;
• (ii) the Assignor controls the defense and settlement of that claim;
• (iii) the Assignee fully cooperates with the Assignor in connection with its defense and settlement of that claim; and
• (iv) the Assignee stops all sales, distribution, and public use of the infringing Intellectual Property, if requested by the Assignor.
• (i) obtain the right for the Assignee to continue to use the infringing Intellectual Property;
• (ii) modify the infringing Intellectual Property to eliminate the infringement;
• (iii) provide substitute noninfringing intellectual property to the Assignee pursuant to this assignment; or
• (iv) refund to the Assignee the amount paid under this assignment for the infringing Intellectual Property.
• (c) No Other Obligations. The Assignor shall have no other obligations or liability if infringement occurs, and shall have no other obligation of indemnification or to defend relating to infringement. The Assignor shall not be liable for any costs or expenses incurred without its prior written authorization and shall have no obligation of indemnification or any liability if the infringement is based on (i) any modified form of the Intellectual Property not made by the Assignor, (ii) any finding or ruling after the effective date of this assignment, or (iii) the laws of any country other than the United States of America or its states.

7. GOVERNING LAW.

• (a) Choice of Law. The laws of the state of  govern this agreement (without giving effect to its conflicts of law principles).
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .

8. AMENDMENTS.

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

9. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. Neither party may assign any of its rights under this assignment, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. Neither party may delegate any performance under this assignment, except with the prior written consent of the other party.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.

10. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this assignment in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This assignment, agreements ancillary to this assignment, and related documents entered into in connection with this assignment are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

11. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

12. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Assignor: 

• If to the Assignee: 
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

13. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

14. ENTIRE AGREEMENT.

This assignment constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this assignment. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this assignment are expressly merged into and superseded by this assignment. The provisions of this assignment may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this assignment by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this assignment. Except as set forth expressly in this assignment, there are no conditions precedent to this assignment's effectiveness.

15. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this assignment's construction or interpretation.

16. EFFECTIVENESS.

This assignment will become effective when all parties have signed it. The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

17. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to betaken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature. 

[PAGE BREAK HERE] EXHIBIT A LIST OF INTELLECTUAL PROPERTY

[PAGE BREAK HERE] EXHIBIT B FORM OF RECORDABLE INTELLECTUAL PROPERTY ASSIGNMENT For good and valuable consideration, the receipt of which is hereby acknowledged, an individual a(n) (the " Assignor ") hereby assigns to an individual a(n) (the " Assignee ") all of the Assignor's interest in the Intellectual Property identified in Attachment A to this assignment, and the Assignee accepts this assignment.

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

ATTACHMENT A INTELLECTUAL PROPERTY

Free Intellectual Property Assignment Agreement Template

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Intellectual property assignment agreement: How-to guide

In the dynamic realm of commerce and innovation, the notion of property extends far beyond physical boundaries. Just as one might transfer ownership of a house or a car, the exchange of intellectual property (IP) rights is a critical component of modern business transactions. For instance, if you're launching a startup, acquiring product rights, or even purchasing an entire company, in each scenario, the seamless transfer of intellectual property ownership is essential for ensuring a smooth transition and protecting your interests.

So what constitutes intellectual property? Intellectual property encompasses creations of the mind, such as inventions, software, and hardware programs, literary and artistic works, designs, symbols, names, and images. As businesses grow and evolve, the need to manage and protect these valuable assets becomes increasingly important. One crucial aspect of managing intellectual property is through intellectual property assignment agreement, otherwise known as IP assignment agreement. These agreements facilitate the transfer of IP rights from one part to another.

In this article, we’ll explore the nuances of intellectual property assignment agreements, including their definitions, benefits, types, and considerations.

What is an intellectual property assignment agreement?

An intellectual property assignment agreement, also known as an IP assignment agreement, is a written contract that transfers intellectual property rights from one party (the assignor) to another (the assignee). Intellectual property covers a broad spectrum of intangible assets, including patents, copyrights, trademarks, trade secrets, and more.

For instance, a software developer might have created a groundbreaking algorithm while employed at the company. Through an IP assignment agreement, the developer transfers the rights to this algorithm to the employer, ensuring that the company has exclusive ownership and control over its use and commercialization.

Benefits of IP assignment agreement

IP assignment agreements are crucial in a company’s business and provide multiple benefits for the assignor and assignee.

Clear ownership

By executing an IP assignment agreement, the assignor unequivocally transfers all rights and interests in the intellectual property to the assignee. This clarity of ownership and proprietary rights helps to avoid disputes and potential litigation over the ownership of the IP in the future.

Legal protection

By formally transferring the IP rights through a written agreement, both parties are legally protected. This protection can be essential in case of any infringement or misuse of intellectual property.

Assured compensation or price guarantee

When transferring IP ownership rights for patents, trademarks, copyrights, etc., the original owner gets compensated by the party buying the ownership. The buyer will also pay the IP owner an agreed-upon price for the IP, which will be paid on the date as decided by the involved parties. 

No future obligations

The party selling the IP won’t be responsible for meeting any future obligations. For instance, if there is an existing trademark that requires constant monitoring to know whether the trademark is used by any other competitors, the seller won't bear the charges incurred for  trademark monitoring . The buyer has to bear these and any future trademark maintenance costs.

Commercialization opportunities

Assigning intellectual property rights can enable businesses to commercialize the intellectual property more effectively. This could involve licensing the IP to third parties, selling it outright, or using it as collateral for financing.

Facilitates collaboration

In cases where multiple parties are involved in creating intellectual property, an assignment agreement can facilitate collaboration by clearly defining each party's rights and responsibilities.

Risk mitigation

For businesses acquiring ownership rights to intellectual property, an assignment agreement mitigates the risk of third parties claiming rights to the IP. It provides a legal basis for defending against infringement claims and protects the assignee's investment in the IP.

Enhanced value

Clear ownership of intellectual property assets can enhance the value of a business, especially during mergers, acquisitions, or fundraising activities. Investors and stakeholders are more likely to perceive a business positively when it has secure ownership of valuable IP assets. For example, let’s say your start-up company holds sole intellectual property rights to an automatic house-locking system. When your company gets acquired by another company, the new company will also evaluate the value of the IP owned.

Understanding IP assignment agreements: Considerations for sellers

While intellectual property assignment agreements offer various benefits, as a seller of the IP you need to keep in mind what it entails for you when you sell your IP.

Choosing between an IP assignment and a licensing agreement

In an IP assignment agreement, the seller transfers all ownership rights to the intellectual property for a predetermined fee. Here the seller gets a fair market value for their IP as a one-time payment. However, if they had opted for an  IP licensing arrangement , they could have retained the ownership of their IP while giving certain usage rights to the interested party. For instance, let’s say you have written and composed a song. A music company wants your song under their label. Here you have two options. You can sell your song completely to the music label, where they’ll have the right to use or alter your song as they deem fit. Or you can license your creation for an agreed-upon fee or price and set the terms and conditions for using your song. Here you’re getting paid for your creation while retaining ownership of your creation. Whichever option works best for you can be opted and respective agreements can be drawn.  

Value uncertainty

The value of intellectual property can fluctuate over time due to changes in market demand, technological advancements, or legal developments. Sometimes an intellectual property’s future value can increase tremendously, impacting the fairness of the negotiated price. Hence, while deciding the price of such assets, the seller should calculate the future valuation and decide the price of IP.

Limited future opportunities

Once intellectual property rights are assigned, the assignor may be restricted from using or further developing the intellectual property in the future. This limitation could hinder the assignor's ability to explore new business ventures or pivot their existing strategies.

In conclusion, while an intellectual property assignment agreement offers significant benefits in terms of clarity, protection, and commercialization of intellectual property assets, parties must carefully weigh these advantages against the limitations. Consulting with legal professionals experienced in intellectual property law is essential to navigate these considerations effectively.

What are the types of IP assignment agreements?

Intellectual property assignment agreements are comprehensive in nature, outlining the terms and conditions under which the transfer of IP ownership occurs. Here's an overview of the types of IP assignment agreements:

Patent assignment agreement or assignment of patents

A  patent assignment agreement is a written agreement whereby the owner of a patent transfers or assigns their ownership rights to the other party. This agreement ensures that the assignee gains full legal rights to the patent, including the right to exclude others from making, using, or selling the patented invention, innovations, and processes. Patent assignment agreements typically include details about the patented invention, including patent numbers, descriptions, and any related rights or obligations. 

Copyright assignment agreement or assignment of copyrights

Copyright assignment agreements transfer ownership of creative works, such as literary works, music, art, and other creative expressions. By signing a copyright assignment agreement, the creator relinquishes their rights to reproduce, distribute, and display the copyrighted work to the assignee.

Trademark assignment agreement or assignment of trademarks

Trademark assignment agreements transfer ownership of trademarks, which are used to identify and distinguish goods or services in the marketplace. Through this agreement, the assignor relinquishes their exclusive rights to use the trademark in commerce, allowing the assignee to use and enforce the mark for their business or products.

Trade secret assignment agreement or assignment of trade secrets

Trade secret assignment agreements are used to transfer ownership of confidential information or trade secrets from one party to another. These agreements outline the specific trade secrets being transferred and impose obligations of confidentiality on the assignee to protect the secrecy of the information. 

By signing such an agreement, the assignee gains the rights to use and protect the trade secrets for their own benefit. It can be any proprietary information like formulas, processes, customer lists, and business strategies. These agreements typically include provisions to maintain confidentiality and prevent unauthorized disclosure or use of trade secrets.

Design assignment agreement or assignment of design

An assignment of design agreement involves the transfer of ownership rights related to industrial designs or product designs. It ensures that the assignee gains exclusive rights to reproduce, distribute, and modify the design according to their business needs. This agreement is crucial for companies involved in product development and manufacturing.

Employee or contractor IP assignment agreement

These agreements transfer ownership of intellectual property created by employees or contractors during their employment or engagement. They are essential for employers to secure ownership of IP developed by their personnel. They often include provisions related to confidentiality, non-competition, and non-disclosure, which are mostly included in an employment agreement. Sometimes, employers even ask employees to sign separate non-disclosure agreements whenever an employee comes up with an invention.  

Assignment of IP in a joint venture  

In cases where multiple parties jointly create intellectual property, a joint ownership agreement may establish each party's rights and responsibilities. These agreements detail the terms of joint ownership, including each party's share of the IP, decision-making authority, and rights to exploit the IP.

It's essential to choose the appropriate type of IP assignment agreement based on the specific intellectual property rights being transferred and the circumstances of the transaction. Consulting with legal professionals knowledgeable in intellectual property law can help ensure that the agreement adequately protects the interests of all parties involved.

Who uses intellectual property assignment agreements?

IP assignment agreements are utilized across a spectrum of industries and scenarios. These agreements are crucial tools for businesses and individuals seeking to define and transfer intellectual property rights.

Corporations and businesses

Employment agreement : Companies frequently incorporate IP assignment clauses into their employment contracts. This ensures that any intellectual property created by employees during the course of their employment is automatically assigned to the company.

Consulting agreement : Similar to employment agreements, consulting contracts may include provisions requiring consultants to transfer any intellectual property they develop while working for the company.

Transactions contemplated : In mergers, acquisitions, or other business transactions, IP assignment agreements are employed to transfer ownership of intellectual property assets between parties.

Joint ventures : Partners in joint ventures often use these agreements to clarify ownership rights and facilitate the sharing or licensing of intellectual property developed during the collaboration.

Individuals and inventors

Prior inventions : An individual with a prior invention may use IP assignment agreements to transfer ownership rights to a new employer or business partner.

Consultants and contractors : Freelancers, consultants, and independent contractors may be required to sign an IP or invention assignment agreement as part of their contractual arrangement with clients.

Startups : Startup founders commonly use these agreements to consolidate ownership of intellectual property created before or during the company's establishment.

In essence, assignment agreements are utilized by parties across various sectors and contexts to facilitate the transfer of valuable intellectual property rights, ensuring legal protection and compliance while fostering innovation and business growth.

Key provisions of an intellectual property assignment agreement

Introduction.

Begin the agreement by formally introducing the parties involved to the agreement. In an intellectual property assignment agreement, the party selling the IP is called the “assignor,” and the other party who buys it is called the “assignee.” Here, along with providing the details of the intellectual property, the assignor explicitly agrees to transfer intellectual property rights to the assignee according to the agreed-upon terms of the agreement.

Assignment of IP

This section specifies the intellectual property being transferred. It identifies the specific patents, trademarks, copyrights, trade secrets, or other intellectual property referenced in the agreement. Additionally, it outlines the scope of the transfer and any limitations on the assigned IP rights.

Purchase price

The agreement details any monetary compensation involved in the transfer of intellectual property rights. In this section, clearly outline the payment terms of the agreement. Detail whether the parties hereto agree to pay the assignor as a lump sum or in installments. If the payment is made in installments, you must also provide the schedule for such payment.

Recordation

To formalize the transfer of intellectual property rights, recordation with relevant authorities may be necessary. This provision addresses the requirement and process for recording the assignment with the appropriate governmental authority, ensuring compliance with legal formalities. 

No early assignment

This clause states that the assignment of IP rights cannot occur before certain conditions are met, such as before the completion of a project or the fulfillment of payment obligations. This section prevents premature transfers of IP.

Assignor’s representations

In this part, the assignor provides assurance that they have the sole right to the IP created and it hasn’t been licensed to any third-parties. They also affirm that they have the legal authority to transfer ownership of the IP and there are no undisclosed encumbrances or infringements.

Indemnification

This provision outlines the parties' obligations to indemnify each other against any losses, damages, or liabilities arising from a breach of the agreement or the assertion of third-party claims related to the transferred IP.

Governing law

This section specifies the jurisdiction whose laws will govern and interpret the agreement. It provides clarity in the event of legal disputes.

This clause outlines the procedures for making changes or modifications to the intellectual property assignment agreement. To make any changes pertaining to the terms of the agreement requires written consent from both parties.

Assignment and delegation

This provision addresses the transferability of rights and obligations under the IP assignment agreement. They stipulate whether parties can assign their rights or delegate their duties to third parties.

Counterparts; electronic signatures

This section permits the IP assignment agreement to be executed in multiple counterparts, facilitating convenience in signing. It also recognizes the legal validity of electronic signatures, ensuring compliance with modern technological practices.

Severability

The severability clause states that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect. This ensures that the invalidity of one provision does not invalidate the entire agreement.

This provision details the methods and addresses for official communication between the parties regarding the intellectual property assignment agreement. They ensure that important correspondence is properly delivered and acknowledged.

Waiver provision addresses instances where a party chooses not to enforce its rights under the agreement. For instance, if certain provisions are waived off on a one-time basis regarding the agreement, this doesn’t mean that the provision is waived for the entire term of the agreement. Take the case where the assignee is paying for the IP in installments. If the assignee is not able to pay the installment for a month, then the assignor can waive that default and continue the agreement upon prior written consent.

Entire agreement

This part of an intellectual property assignment agreement explains that the parties agree to the specific terms and conditions mentioned in the agreement. Any verbal negotiations or other terms that are even stated via email or otherwise are not part of this agreement.

This section states that the headings used in the agreement are for convenience only and do not affect the interpretation of the provisions.

Effectiveness

The effectiveness provision specifies the date on which the agreement becomes effective. This ensures clarity regarding when the rights and obligations outlined in the agreement take effect.

Necessary acts; further assurances

Requires the parties to take any additional actions necessary to carry out the terms of the agreement fully. This may include signing additional documents or cooperating with each other as needed.

How does an online template facilitate drafting intellectual property assignment agreements?

There are various advantages of using an online template for IP such as.

Simplified drafting process

Online templates streamline the drafting process of IP assignment agreements. By providing a structured framework, these templates guide users through the essential elements required for such agreements. Users can efficiently input pertinent details specific to their arrangement, ensuring comprehensive coverage of the subject matter assigned.

Ease of customization

Some  online template providers, like LegalZoom , allow you to easily customize the templates to suit specific circumstances. With editing options available, users can modify clauses and provisions to reflect their agreed-upon terms and conditions of the arrangement

Clarity and consistency

These templates offer clear and standardized language, enhancing understanding and minimizing ambiguity. Consistent formatting and terminology throughout the agreement contribute to its readability and effectiveness.

Time and cost efficiency

Utilizing an online template can minimize the need for extensive document research and costly legal consultations. It allows parties to draft a comprehensive IP assignment agreement efficiently and affordably, saving valuable time and resources.

Accessibility and convenience

Online templates are readily accessible from anywhere with an internet connection, enabling parties to initiate and complete the drafting process conveniently. This accessibility promotes collaboration and facilitates the timely execution of agreements.

As you can see, using online templates provides numerous benefits. Since there are a multitude of templates available online, choosing the right template is key. To streamline this process, LegalZoom offers a comprehensive intellectual property assignment agreement template that is simple and easy to use. Just answer the guided questions, complete the form, and download the document for free.

Frequently asked questions

What's an intellectual property assignment agreement.

When your business needs to sell or buy intangible assets, use an intellectual property assignment agreement to protect both parties. It enables the transfer of ownership of intangible items legally. Intellectual property includes everything from patents to trademarks to software and more.

What key details are required to complete your assignment agreement?

Here's the information you'll need to complete your intellectual property assignment agreement:

• Who owns the intellectual property : Keep the information of the assignor ready while drafting your agreements 
• Who's buying the intellectual property : Have the name and contact details of the assignee ready
• How much it costs : Know what the buyer pays for the intellectual property

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Dorna Moini, JD

Founder, Gavel

Dorna Moini is the CEO and founder of Gavel, a no-code platform for building document automation and client-facing web applications for the law. Prior to starting Documate, Dorna was a litigator at Sidley Austin. There, in her pro bono practice, she worked with legal aid organizations to build a web application for domestic violence survivors to complete and file their paperwork, which led to the idea for Documate. Dorna is on the Legal Services Corporation Emerging Leaders Council and a member of LAFLA’s Advisory Board. She was named an ABA Legal Rebel and a Fastcase 50 honoree. She also teaches the Legal Innovations Lab at USC Law School.

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• Running the Business

Employee proprietary information and inventions assignment agreements: what they do, and what could happen without them

The typical onboarding process for a new employee at nearly all companies in most industries includes a requirement for the employee to sign an agreement regarding confidentiality and ownership of inventions, copyrights and other intellectual property.  This article explains the purpose of such an agreement and consequences that result from a failure to have such agreements signed by each employee.

What is a PIIA?

The agreement goes by many names, but tech-savvy companies often refer to them as PIIAs (or ''Pee-as'' for short). PIIA is the acronym for the most common name for these agreements, ''proprietary information and invention assignment'' agreements.  The typical form of agreement addresses two main areas: confidentiality and ownership of intellectual property. 

The agreement requires that an employee maintain the employer's non-public and proprietary information confidential and contains language similar to what you would see in a non-disclosure agreement ( see more about non-disclosure agreements ). 

The agreement also requires that the employee agree that whatever the employee creates, discovers, develops or invents while employed with the company is owned by the company. Companies that are in the business of developing products or technology that are protectable by copyright (as is the case with most software companies) can rely on the work for hire doctrine under US copyright law, which automatically gives the employer ownership of copyrights in works of authorship ( eg , software, manuals and documentations) written or prepared by an employee within the scope of his/her employment. The work for hire doctrine, however, does not apply and ownership is not automatically vested in the employer in the case of other intellectual property rights, most notably in the case of patents (see our article providing an overview of  intellectual property rights and a more detailed discussion about  copyrights and  patents ). 

Therefore, the PIIA is the employee's agreement that everything created by the employee for the employer is owned by the employer, and if the employer needs the employee to do anything or sign any document to confirm that the employer owns all the rights in the intellectual property developments, the employee agrees in the PIIA to do so.

PIIAs will also often include non-solicitation clauses and, for those employees working in states where non-competition clauses are enforced, the agreement may also include a non-compete clause (see our article discussing  non-solicitation and non-competition clauses ).

Does the company really own everything the employee creates?

If an employee can show that he or she created intellectual property on their own time and without the use of any of the employer's facilities, equipment, supplies or trade secret information and if the intellectual property did not relate at the time of development to the employer's business or actual or anticipated research or development, then the employee would continue to own such intellectual property. 

In some states, such as California, Washington, Texas and Illinois, this exception is expressed in a statute that requires that the PIIA include a notice of the exception.  Such statutes favor the employer in that the burden of showing the exception applies is typically on the employee.

What happens if I don't have my employees sign PIIAs or if the PIIAs don't include all the bells and whistles?

Whenever a company goes through a financing, whether it is a seed round or an institutional VC round, or if the company is going to be acquired, the investors or acquirer will conduct due diligence. One of the issues that they will review is whether or not all the employees have signed PIIAs and whether or not those PIIAs require employees to assign to the company ownership of all intellectual property rights to developments created by the employee. Investors and acquirers want to make sure that the company owns its intellectual property, products and technology. 

Depending on where the company is in its lifecycle, the due diligence may focus on all employees, former and current, or it may just focus on the former and current employees that have been involved in research and development or engineering activities. (The failure of the company to obtain a PIIA from an employee strictly in an administrative capacity will generally not create a material issue). If due diligence identifies a problem with the PIIAs, or reveals that PIIAs were not signed, investors and acquirers may require that the company obtain signed PIIAs (or the equivalent) after the fact, which may necessitate the company having to pay the employees something in exchange for signing the agreement so that it is binding or, worse yet, give a former employee leverage to ask for something more. Giving someone leverage on the cusp of a financing or an acquisition may not end well for the company.

While PIIAs may seem like a routine document that is available from numerous online sources, it is essential that an employer have a form of PIIA that includes provisions that is enforceable and current and will withstand scrutiny from investor and acquirer's counsel. If you have questions about your form of PIIA, or if you want to make sure that you have forms of PIIA that will be enforceable for your employees wherever they may be located, within or outside the United States, please contact a member of our Technology, Data and Commercial practice .

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Intellectual Property Assignment Agreement: A Comprehensive Guide for Your Business

LegalGPS : May 21, 2024 at 12:30 PM

Hello there, entrepreneur friend! Today let’s have that coffee chat about Intellectual Property Assignment Agreements. If you're thinking "what's that?" or "why do I need it?" then this is the perfect starting point for you. In today's competitive business world, protecting your intellectual property (IP) is more crucial than ever.

Table of Contents

Defining the purpose.

• Clarity of Transfer
• Definition of Transferred Intellectual Property
• Compensation and Payment Terms
• Warranties and Representations
• Confidentiality Agreements
• Governing Law and Dispute Resolution

Step 1 - Identify the Parties Involved

Step 2 - specify the assigned intellectual property, step 3 - describe the transfer of rights, step 4 - detail compensation and payment terms, step 5 - include confidentiality clauses, step 6 - determine governing law and dispute resolution process, tips for avoiding common mistakes and pitfalls.

What is An Intellectual Property Assignment Agreement?

An Intellectual Property Assignment Agreement is a legal document that ensures the transfer of an inventor or creator's rights to another person or company. Essentially, it’s a legal way of saying "what’s mine is now yours". These agreements are often used in situations involving startups, company buyouts, or employees creating new works or inventions during their jobs - situations a lot of entrepreneurs find themselves in.

Let's break that down a touch more:

The IP assignment agreement's primary purpose is to help your business prevent future disputes regarding IP ownership. When all parties are clear on who owns the intellectual property, it prevents a whole host of potential issues.

Believe me, the last thing you need or want as an entrepreneur is a legal dispute over who owns an idea, an invention, or any creative output.

And that's where this agreement steps in: it provides legal proof that the ownership has been transferred. So, if ever challenged, you can show the agreement and say "See, it’s mine!" .

Key Elements to Consider for a Properly Drafted Agreement

When it comes to IP assignment agreements, not just any generic contract will do. It's crucial to understand and include some key elements to ensure you're fully protected.

1. Clarity of Transfer

The agreement must clearly define the scope and extent of the transferred rights. To do this, use precise language that leaves no room for confusion. For example, specify whether the IP rights being transferred are exclusive or non-exclusive and if there are any limitations on how the Assignee can use or sublicense the IP. Here's a suggested format:

"The Assignor hereby assigns to the Assignee, its successors and assigns, [exclusive/non-exclusive] rights, title, and interest in and to the Intellectual Property, subject to the following limitations [if any]:"

2. Definition of Transferred Intellectual Property

This section is where you identify the specific Intellectual Property being assigned. Start by describing the IP type (e.g., copyright, patent, trademark), then provide the necessary details:

For a copyright, include the work title and a brief description.

For a patent, mention the patent number and summarize the invention.

For a trademark, provide the trademark name, registration number, and design details.

Remember, the key is to be as detailed and transparent as possible.

3. Compensation and Payment Terms

Just as with any deal, it's important to be crystal clear about the compensation for transferring IP rights. Make sure you consider the following in your agreement:

The total amount payable

The currency

The payment method (e.g., check, wire transfer)

The payment schedule (e.g., lump-sum, installments)

For example: "In consideration for the assignment of rights, the Assignee shall pay the Assignor a total sum of [Amount] in [Currency], through [Payment Method], payable as follows:"

4. Warranties and Representations

Including warranties and representations in the agreement helps provide confidence to both parties. The Assignor should explicitly declare that they:

Are the sole and true owner of the IP

Have the complete right to assign the IP to the Assignee

The IP does not infringe on any third-party rights

A sample clause might look like this:

"The Assignor warrants and represents that they are the true and lawful owner of the Intellectual Property, have full right and authority to enter into this Agreement, and that the Intellectual Property does not infringe upon any third-party rights."

5. Confidentiality Agreements

A crucial aspect of a well-drafted IP Assignment Agreement is protecting sensitive information about the business and the IP itself. Incorporate confidentiality clauses to maintain a secure environment.

Try a clause similar to this one: "The parties agree to treat all confidential information related to this Agreement as strictly confidential, and to take all necessary precautions to prevent unauthorized disclosure or use of such information."

6. Governing Law and Dispute Resolution

Last but not least, outline which jurisdiction's laws will govern the agreement. Furthermore, state how any disputes will be resolved, such as through arbitration, mediation, or litigation.

A model clause could be: "This Agreement shall be governed by the laws of the State of [State]. Any dispute arising out of or in connection with this Agreement shall be resolved by [method of dispute resolution]."

Drafting Your IP Assignment Agreement

Let's move on to the most crucial part of our discussion: Creating your Intellectual Property Assignment Agreement. This section intends to make it much clearer and more action-oriented. Your aim? To walk away with enough information to begin drafting your agreement. Let's dive in.

Start by clearly naming the parties involved in the agreement.

Who is the 'Assignor' (the party transferring the rights)?

Who is the 'Assignee' (the individual or business entity receiving the rights)? Clearly outline their legal names and any other relevant identifying information, like addresses or official business names. It would typically look like this: "[Full Legal Name], referred to as the "Assignor," and [Full Legal Name], referred to as the "Assignee."

Here, you need to provide a full and exhaustive description of the intellectual property being transferred. Please don't leave room for vagueness or ambiguity - the more specific, the better. For instance, if it's a patent, include the patent number and a detailed summary of what the patent covers. If it's a copyrighted work, offer the title, the form of the work (e.g., a book, software, music), and a short description of it.

Your entry here might read: "The "Intellectual Property" includes, but is not limited to, [detailed description]."

This section is all about clearly laying out what you're giving up and what you're gaining. Highlight all rights, titles, and interests being assigned from the Assignor to the Assignee. You could list them out just to ensure nothing falls between the cracks.

It’s vital to be as clear and detailed as possible here. You're specifying the extent of the rights transferred. It could be exclusive, non-exclusive, permanent, temporary, how it can be used, if it can be sold, and more.

Here's an example:

"The Assignor hereby assigns to the Assignee, its successors and assigns, all rights, title, and interest in and to the Intellectual Property, including, without limitation, the right to sue and recover for past, present, and future violations."

Now, let's talk about money. In this step, you need to fully detail the financial exchanges. Include the amount of payment, payment format, and schedule (upfront, lump sum, installments). It wouldn't hurt to clearly lay out what conditions, if any, would lead to a return of the compensation.

This clause might look something like:

"For the assignment of rights under this Agreement, the Assignee shall provide compensation to the Assignor in the amount of [Amount], payable [insert payment method and schedule]".

Especially with IP, you'll want to build in some safety nets. You can include a confidentiality clause that prevents the involved parties from disclosing sensitive information about the IP.

A basic confidentiality clause may read: "The Assignor agrees to keep confidential all non-public information that the Assignee designates as being confidential, not to disclose it to any other people, and not to use it for any purpose other than the discharge of the Assignor's obligations under this Agreement."

Finally, specify which state or country's laws will govern the agreement. This is crucial in the case of any future legal disputes. Additionally, include how disputes over the agreement will be resolved - arbitration, mediation, litigation, etc.

Here is an example:

"This Agreement will be governed by and construed in accordance with the laws of the State of [State]. Any disputes under this Agreement shall be resolved by [method of dispute resolution]."

You're now equipped with all you need to draft an agreement. But before you get started, here are some quick tips to avoid any missteps:

Ensure the agreement is detailed and described correctly

Work with a knowledgeable attorney

Review the final agreement carefully before signing

With these, you're set to protect your business's most valuable assets!

In today's competitive business environment, it's imperative to protect your inventions, your creations - your Intellectual Property. If you're still unsure where to start, check out our professional template for Intellectual Property Assignments!

With an Intellectual Property Assignment Agreement in hand, you're ensuring that ownership of these is well established to prevent future disputes. So here's to smoother operations and peace of mind!

Always remember, we're in this together - as you navigate the business world, consider us your legal co-pilot, happy to guide you on your journey.

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Intellectual Property Assignment Agreement

Nov 2, 2022

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another.

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another. The agreement may also be referred to as an intellectual property transfer agreement, an IP assignment agreement or an IP transfer agreement.

When should you use an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement should be used whenever transferring the rights in intellectual property ( IP ). There are a number of situations where you may need to do this. The most common for SMEs is where an individual has done work for a company as a consultant without using a consultancy agreement with the result that the consultant and not the company, owns the IP in the work. It is also necessary to transfer IP where founders create IP before incorporating or being employed by a company and, as a result, title to the IP vests in the founder.  

Why is an Intellectual Property Assignment Agreement important and why should you use it?

Investors in early stage companies will often require the company and key employees to give warranties confirming that the company owns all material IP used by the company. Any IP not owned by the company will need to be transferred to the company before the investment is completed. Failing to transfer the IP can materially impact the valuation of the company or, in extreme cases, lead investors to pull out of the transaction.

It is necessary to use a written agreement for an assignment of certain types of IP (such as copyright) to be effective. Further, it is important to ensure that the agreement is an enforceable contract. For the contract to be enforceable there must be some form of consideration paid in exchange for the IP. The amount of consideration payable will depend on the situation in which the IP is being transferred. If a consultant or founder is transferring IP that should have been owned by the company, the consideration should be a nominal amount, e.g. £1, which is deemed to have been received by the assignor (note that some form of consideration is required for the agreement to be an enforceable contract). The IP can, however, be transferred for valuable consideration or as part of an asset sale.

An IP assignment will also include warranties to confirm that the assignor is the owner of the intellectual property being transferred and that the assignor has the right to transfer the intellectual property. Transferring intellectual property without these assurances means that your company will have limited or no recourse should it transpire that the assignor did not own or have the right to transfer the intellectual property.

What are the common pitfalls of an Intellectual Property Assignment Agreement?

Where possible, it is important to clearly describe the IP being transferred. IP by its nature is not physical so failing to accurately describe the IP can result in disputes about what has been transferred. 

Further, there are several different types of IP (copyright, patents, trade marks and designs). Certain IP rights can also be registered. Depending on what is being transferred it may be necessary to take additional steps to perfect the transfer (for example notifying the appropriate register of the transfer). The agreement should include a requirement that the assignor takes the necessary steps to perfect the transfer and specify which party is required to pay any associated costs (such as registration fees).

In addition where copyright is being transferred, the assignor should also ensure that the assignor waives their moral rights (such as the right to attribution) in respect of the copyrighted work.

Disclaimer: Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

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Sep 15, 2022

Oct 3, 2022

What are IP Assignment Agreements?

For the high-growth startups we represent (and into which our venture capital clients invest), intellectual property (IP) is typically the core asset driving the company’s value. Ensuring that the company’s IP is properly owned and protected can therefore be the difference between success and failure. It is somewhat surprising then, how often founders fail to ensure that their companies do, in fact, own this critical property. Founders who eschew legal representation in favor of low-cost, automated options tend to fall into this trap most often. Most automated or semi-automated providers of startup legal documentation fail to provide even a basic IP assignment and confidentiality agreement—an essential document that all company personnel (founders included) must sign to ensure that IP is both validly assigned to the Company and protected from disclosure. When used with employees and consultants, IP assignment and confidentiality clauses are typically bundled into a single contract, often called a “Proprietary Information and Inventions Assignment Agreement” or a “Confidential Information and Inventions Assignment Agreement” (though there are many names that can be used here).

What are IP assignment agreements?

IP assignment agreements are contracts between a business and its personnel that transfer ownership of IP created by the personnel during their employment or engagement with the business. IP can include patents, trademarks, copyrights, and trade secrets. The agreement ensures that the business retains ownership of any IP created by the personnel, even after they leave the business. Even if your personnel are not involved in creating IP, it’s advisable to have these agreements in place—you never know where the next great idea might come from, and in any case, it’s easier to get this agreement signed than it is to explain to an investor or acquirer why you didn’t. Without an IP assignment agreement, personnel may be able to claim personal ownership of the IP they created, which can be deadly to a business that relies on IP for its value. If you are missing these agreements, investors and acquirers will notice and it can cause your financing or acquisition to fall through, particularly if the personnel who failed to sign have left or are otherwise unwilling to sign.

What are confidentiality agreements?

Confidentiality agreements, also known as non-disclosure agreements (NDAs), are contracts between a business and its personnel that prevent the personnel from disclosing confidential information about the business. Confidential information can include trade secrets, customer information, financial information, and any other information that is not publicly available. Most founders innately understand the importance of maintaining confidentiality, so rarely fail to have an NDA in place with individuals to whom they provide sensitive information. It should be noted, though, that having confidentiality agreements with your employees and consultants has become particularly important in recent years, as states and the federal government have sought to restrict the use of noncompetition agreements. Having a strong confidentiality agreement can be the key to ensuring that your ex-employees don’t take valuable information to your competitors.

While confidentiality obligations are self-explanatory and a “must-have”, you must also remember that an NDA does not necessarily include an IP assignment agreement. NDAs, particularly those provided by automated/semi-automated document providers, are often designed for use solely during preliminary conversations with potential commercial or collaboration partners. In that context, NDAs do not (and likely should not) have any clauses providing for the transfer of IP ownership. It is therefore critical that you do not simply ask your employees and contractors to sign a “standard” NDA—yes, that agreement will likely prevent those folks from sharing your sensitive information, but if you’re paying them to create IP for you, you’ll also want language that ensures that your company actually owns the work product they create.

Please remember, have your personnel (employees, contractors and even advisers) sign an IP assignment and confidentiality agreement, ideally on the day that individual first starts working for you. File that agreement away somewhere safe (ideally with your lawyer). These agreements ensure that the business retains ownership of its IP and that confidential information is kept secret. If you need help drafting IP assignment and confidentiality agreements, consult with a qualified attorney with experience in representing high-growth startups (believe it or not, there’s “magic language” needed to ensure these agreements work properly, and even a Supreme Court case about it).

Drafting Employee Work Made For Hire and IP Assignment Clauses | Practical Law

Drafting Employee Work Made For Hire and IP Assignment Clauses

Practical law legal update 6-523-4246  (approx. 4 pages).

Work Made for Hire and Assignment

• Secure an actual conveyance of the employee's rights.
• Minimize the risk of a successful challenge to the employer's rights at a later date.
• A further assurances clause in the event the employer finds it necessary or desirable for the employee to execute additional documents or assist the employer in its efforts to enforce the IP rights against third parties.
• A grant of power of attorney to the employer for the purpose of executing any documents and undertaking appropriate actions, if, for example, the employee is unavailable or uncooperative.

State Law Limitations

• Relate to the employer's business.
• Result from any work performed by the employee for the employer.

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Intellectual property (IP) assignment agreement: Sample template for Ontario startups

In a technology business, it is often the value of the intellectual property (IP) assets that the investor finances or the purchaser pays for. It is critical to have “clean” ownership of any intellectual property that is critical to the operation and success of your business. If your products and services depend on certain key IP assets, an investor will undertake due diligence to understand your right to use such assets.

An intellectual property assignment agreement provides assurance to investors that the founders have legally transferred to the company the intellectual property required to run the business.

Make sure to engage qualified IP counsel at a very early stage of your business to ensure that you have the freedom to operate your business with your inventions and to make certain that your business can meet the due diligence requirements of investors. MaRS has created a sample template of an intellectual property assignment agreement to help streamline business for investors, founders and their respective legal advisors. While MaRS makes this document available for educational purposes and to facilitate the negotiation of terms between investors and startups, the template is yours to use at your own risk . Please see the disclaimer below.

Download the Sample intellectual property assignment template

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This sample legal document has been made available by MaRS Discovery District for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Neither the transmission of this sample legal document nor the transmission of any information contained in this website is intended to create, and receipt hereof or thereof does not constitute formation of, a lawyer-client relationship. Internet subscribers and online readers should not rely upon this sample legal document or the information contained in this website for any purpose without seeking legal advice from a qualified lawyer practicing in the reader’s province.

The information contained in this website is provided only as general information and may or may not reflect the most current legal developments; accordingly, information on this website is not promised or guaranteed to be correct or complete. MaRS Discovery District expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this website.

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Intellectual Property Agreement Template

Free Intellectual Property Agreement Sample

• • Prior employee inventions
• • Length of agreement
• • Patent and copyright registrations

What is an intellectual property contract?

An intellectual property agreement is a formal contract between employees and employers that outline the terms and conditions for how an organization’s intellectual property is protected when employees create inventions as a function of their job.

DISCLAIMER : We are not lawyers or a law firm and we do not provide legal, business or tax advice. We recommend you consult a lawyer or other appropriate professional before using any templates or agreements from this website.

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Why is an intellectual property agreement important, best practices to get the most out your intellectual property protection agreement, 1. help protect your employee's prior inventions, 2. get the timing right when presenting your ip agreement, 3. get employees to return materials and data, download our intellectual property agreement, faqs about intellectual property contracts, intellectual property agreement, intellectual property, prior inventions.

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• Intellectual Property Law

What is an employee intellectual property agreement

This article is written by Hannah Boban pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho .

Table of Contents

Introduction

Innovative minds often come up with innovative ideas and intellectual property is a creation of such ideas in the mind. As per law, the owner of such an idea is the person which brings it into existence unless there is a contract to the contrary. Many of us think that the employer owns the intellectual property that an employee creates in the course of his employment. However, an employer assuming that all rights of the employee over such intellectual property are extinguished might be careless in his approach. The employee still owns the claim rights of an author, moral rights and rights to object to alterations to work. So, it becomes crucial to include the conditions determining the ownership of intellectual property in the contracts of employment, agreements of independent contractors or in agreements of a designer or consultant.

Hence, it becomes critical to include terms determining the ownership of intellectual property in employment contracts, independent contractor agreements or agreements with a consultant or designer. In this article, we will understand the concept of an employee’s intellectual property and what are the important clauses that should be drafted in an employee’s intellectual property agreement. 

What is the meaning of “in the course of employment?”

If an employee brings any innovative ideas in the course of business or employment, the employer can claim the same if it was already mentioned in the contract and the employee also agreed to the same. But in case the intellectual property is created outside the course of the employment, an employer cannot claim the rights over it. For example, if an employee is hired in the accounting team of a designing company and if that employee designs a new pattern for a product of the company, he can be entitled to the intellectual property right in that design as he has done something outside the course of his employment, i.e. he has done something outside the terms of the employment of an accountant post. So it is necessary to have clarity on the duties of the employees to differentiate the scope of and what will constitute “in the course of employment” in the agreement agreed upon by both the parties. 

Now let’s see what all should be stated in the terms of an agreement between the employer and the employee. 

It should be always remembered that an agreement with an employee should not be an oral agreement, it should always be a written agreement. It will be always best if the employer gets the agreement signed by the employee before the date of commencement of the employment. Most of the companies have their own standard template of employment agreements for various kinds of jobs in the company. For example, the agreement for a designer will be different from that of a developer or a tester.

In a case where the employment agreement is not signed before the commencement of the employment due to any valid reasons, all the rights and liabilities will be affected from the date of commencement of the employment.

Terms that must be included employee intellectual property agreement

Now let’s look into the broad terms that must be included in any agreements that define intellectual property right:

• The intellectual property created by an employee or by an independent contractor or a consultant during the course of employment  will be owned by the employer;
• Terms to the effect that the employee/independent contractor/consultant will sign any documents reasonably required (such as a deed of assignment) to record the employer’s ownership of the intellectual property created during his employment. This obligation should continue during and after employment. An employer should ensure that any assignment or license deals with existing rights and future rights;
• The confidentiality clause requires the employee or the consultant or the independent contractor to keep any information of the employer to be confidential and neither disclose the same nor use it in any matter outside the course of the employment;
• A clause should also be drafted for the employee or the consultant about whether they should disclose the new inventions and should a record be maintained to prove the originality of the work and the date of its creation;
• A clause where all the scope and definition of confidential information must be mentioned in the agreement. It must include the intellectual property created by the employee in the course of their employment, all the business information and any other intellectual property of the employer itself. The business information includes business plans, marketing strategies and plans, the company’s financial information, customer lists and any other details of the company necessary to be stated in the agreement. 
• It must also include a term which states whether there is any waiver of moral rights by the employee during the employment over the intellectual property.
• It must be made sure that a term for restraining the former employee on the competition for a specified period of time and in a specific geographical area. It should be made sure that such restraints are reasonable.

Key points for drafting the agreement

For the best legal document it should be kept in mind to draft the agreement with the following key points:

• Any ideas, discoveries or inventions must be properly disclosed to the company by the employee if such ideas, discoveries or inventions are related to the business of the company and is during the course or period of employment.
• The company will be considered as the owner of such ideas, discoveries or inventions.
• If an employee is hired particularly for any invention, or for developing a work product, then the right on such invention or work products are the employers since it was created out of the employer’s expense and request.

Let’s look into an example: If an app developer is strictly appointed by an employer for the development of a particular app, then once the app is developed and the course of employment of the employee has come to an end, the intellectual property right belongs to the employer.

It should be also kept in mind by the employer to get the signature of the employee appointed in an intellectual property assignment agreement to avoid any future problem of the same. 

• In the case of a startup company, in order to protect the important assets and to inform the investors of a startup company, which has an intellectual property which will be used as the pillar of the company for its success, the start-up must draft an intellectual property clause in its agreement which will be signed by everyone involved in the start-up which will also include the promoters, developers and the employees. 

Now let’s see some of the provisions that must be included in the employee intellectual property agreement:

Provisions to be included in the employee intellectual property agreement

First of all, we should understand that there is no standard form for employee intellectual property agreement. So it must be carefully drafted and signed by the employee for its legal binding. No matter what the situation is, or where the agreement is made it should be made legally binding

Mostly the employee intellectual property agreement has at least the following three clauses in common:

1. Assignment clause

Generally speaking, an assignment clause is where the rights, duties, or contractual obligations are transferred from one party/person to another person/party. The assignment may be wholly or partly. The clause must also mention the conditions under which a party/person can assign these rights, duties or obligations. 

In an employee, intellectual property agreement the assignment provision, the employee assigns to the employer his/her inventions/discoveries/ideas and also transfer the true and total ownership of the intellectual property. In this provision, it can either narrow down or broaden any inventions/ discoveries/ ideas or nearly anything the employee creates.

Example of an assignment clause in employee intellectual property agreement:

“I agree that all inventions that are (a) developed using equipment, supplies, facilities, or trade secrets of the company; or (b) result from work performed by me for the company; or (c) related to the Company’s current or anticipated research and development will be the Company’s sole and exclusive property and are hereby assigned by me to the Company.”

2. Disclosure clause

A disclosure clause in an employee intellectual property agreement is drafted in such a way that the employee informs the employer of the intellectual property that was developed as per the assignment clause. It should be noted that everything must be clearly and properly disclosed in this clause.

Example of a disclosure clause in employee intellectual property agreement:

“While I am employed by the Company, I will promptly inform the Company of the full details of all inventions, discoveries, improvements, and innovations, whether or not patentable, copyrightable, or otherwise protectable, that I conceive, complete, or reduce to practice (whether jointly or with others) and which: (a) relate to the Company’s present or prospective business, or actual or demonstrably anticipated research and development or (b) result from any work I do use any equipment, facilities, materials, trade secrets, or personnel of the Company or (c) result from or are suggested by any work that I may do for the Company.”

3. Power of attorney clause

Finally, there’s a clause where the employee appointed in the company appoints the company as an employee’s power of attorney to execute documents or take actions on behalf of them. The benefit of this clause is that the company will then have the power to sign documents or execute any other agreements on behalf of the employee to assign the intellectual property right to the business.

Usually, every company have this clause as a fairly standard one. The power of attorney provision guarantees the employer can register and administer the ownership rights without the employee, regardless of whether the employee is willing and able to assist.

Example of the power of attorney clause in employee intellectual property agreement:

“If the Company is unable to secure my signature on any document necessary to obtain or maintain any patent, copyright, trademark, or other proprietary rights, whether due to my mental or physical capacity or any other cause, I hereby irrevocably designate and appoint the Company and its duly authorized offers and agents as my agents and attorneys-in-fact to execute and file such documents and do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, and other proprietary rights with the same force and effect as if executed by me.”

Sample of an employee intellectual property agreement

Employee confidentiality and intellectual property assignment agreement

This EMPLOYEE CONFIDENTIALITY AND INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT (the “Agreement”) is made and entered into by and between [Company name] and [NAME] (“Employee”), as of [DATE] (the “Effective Date”). 

Each of Company and Employee hereinafter may be referred to individually as a “Party” or, collectively, as the “Parties.” 

In consideration of Employee’s employment with Company, the compensation Employee will earn in connection with such employment, Company providing Employee with access to Confidential Information (as defined below), and other good and valuable consideration, the sufficiency and receipt of which Employee acknowledges, Employee agrees as follows:

• Confidential Information:

i. Confidential information and trade secrets defined . Employee hereby acknowledges and understands the term “Confidential Information” means any data, information, or material of Company or its owners or its affiliates relating directly or indirectly to Company or its owners or Affiliates: clients and customers or potential clients and customers (collectively “Customer(s)”); competitors; vendors; advertisers; employees; contractors; suppliers; or business partners, that is discovered or developed by, or disclosed to, Employee through Employee’s relationship with Company, that is not generally ascertainable from public information, whether it is expressly identified as “confidential” or “trade secret,” that includes, but is not limited to: financial information; invoices; business plans; business and contract applications; contracts; forms; research; price lists; marketing materials; advertising materials and developments; sales materials and reports; copyrighted materials; Trade Secrets; the particular needs and requirements of Customers; identities of potential Customers; and all accompanying Customer data. Employee hereby acknowledges and understands the term “Trade Secret(s)” includes, but is not limited to, a confidential, proprietary, and/or sensitive: formula; software; methodology; model; architecture; pattern; compilation; program; device; method; technique; or process, that is discovered, developed in whole or part by Employee, or disclosed to Employee, through Employee’s relationship with Company, including any information, data, or material concerning the business of the Company, and all other information related to Company and its owner and Affiliates businesses, that is not generally known and readily ascertainable by proper means by any other person and/or Employee. This includes, but is not limited to, all inventions or discoveries made by Employee and/or Company (or its owners or Affiliates) resulting in whole or part from Employee’s relationship with Company. The term “Trade Secret(s)” also includes, but is not limited to, Customer lists, invoices and reports containing specifically developed information, such as the name, address, phone number, buying history and other traits of Customers, along with any other information that Company derives a competitive advantage from and that Company makes reasonable efforts to maintain a secret. For purposes of this Agreement, “Affiliates” means an individual, a partnership, a corporation, a limited liability company, an association, a joint-stock company, a trust, a joint venture, or an unincorporated organization, that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, Company.

ii. Use and restriction . Employee acknowledges that Employee will have access to and be provided with Confidential Information in connection with performing services for Company. Employee expressly recognizes that the efficacy and profitability of Company and its owners and Affiliates is dependent in part upon Employee’s protection of the Confidential Information. Employees may use the Confidential Information solely in connection with performing services for Company and its owners and Affiliates. To ensure the continued confidentiality of the Confidential Information, the Employee agrees to hold the Confidential Information in strict confidence. Employee shall not, either during Employee’s relationship with Company or for such period as such information remains Confidential Information after termination, disclose or use for Employee’s own benefit or for the benefit of any other individual or third party, directly or indirectly, any of the Confidential Information, except as such disclosure or use is expressly authorized by Company in writing. Employee hereby agrees to adhere to the method and form of protection of Confidential Information required by Company, subject to change at Company’s sole discretion. Employee shall not communicate any Confidential Information, even in furtherance of Company’s business, to any individual or third party not privy to the Confidential Information, without express consent by Company and the individual or third party’s agreement to be bound by confidentiality terms that adequately protect Company’s Confidential Information.

iii. Exceptions . The confidentiality and restriction on the use of Confidential Information under this Agreement shall not apply to Confidential Information to the extent that such Confidential Information: is now, or hereafter becomes, through no breach of this Agreement by Employee, generally known or available to the public; was known to Employee without an obligation to hold it in confidence prior to the time such Confidential Information was disclosed to Employee by Company; is disclosed or used, as applicable, with the prior written consent of Company and in accordance with any limitations or conditions on such disclosure or use that may be imposed in such written consent; or was or is independently developed by Employee without any use of or reference to the Confidential Information. In addition, notwithstanding any other language in this Agreement to the contrary, Employee understands that Employee may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney if such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law or for pursuing an anti-retaliation lawsuit; or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and Employee does not disclose the trade secret except pursuant to a court order.

iv. Required disclosure . The confidentiality obligations under this Agreement shall not apply to Confidential Information to the extent that such Confidential Information is required to be disclosed pursuant to the order or requirement of a court, administrative agency, or other authority, or otherwise by operation of applicable law. In the event of such order or requirement, Employee, if and to the extent permitted by law, shall give Company written notice thereof and of the Confidential Information to be disclosed as soon as practicable prior to the disclosure of such Confidential Information and shall provide such reasonable assistance as Company may reasonably request, at Company’s sole expense, in seeking a protective order or other appropriate relief in order to protect the confidentiality of the Confidential Information.

v. Other Nondisclosure Agreements . In the event that Company is subject to the terms of any confidentiality or nondisclosure agreement relating to some or all of the Confidential Information that imposes greater restrictions on the disclosure and/or use of such Confidential Information, then Employee shall comply with such greater restrictions to the extent that Employee is made aware of them in advance and in writing.

vi. Property of Company . Employee specifically acknowledges and understands that all Confidential Information and all of Company’s and its owners and its Affiliates strategies and files, including, but not limited to, computer data, reports, materials, records, documents, notes, memoranda, and other items, and any originals or copies thereof, related to the business of Company or its owners or its Affiliates, which Employee either is provided, prepares, uses, or simply acquires during the term of this Agreement, are and shall remain the sole and exclusive property of Company and, to the extent applicable, shall not be removed from Company’s premises without the prior consent of Company.

vii. Return or Destroy Confidential Information. Employee agrees, immediately upon the termination of the relationship between Employee and Company for any reason or upon earlier request by Company to make a diligent search for any and all documents, computer discs, electronic files, software, tapes, computer printouts, or any other material constituting Confidential Information described in this Section 1, and shall: cease using the Confidential Information; promptly return to Company or destroy all Confidential Information and any copies thereof; certify in writing (if requested in writing by the Company) that Employee has complied with the obligations of this Subsection vii.

viii. Return of Company Property . Employee agrees, immediately upon the termination of the relationship between Employee and Company for any reason or upon earlier request by Company to promptly deliver to Company all Company property not covered by Subsection vii.

2. Intellectual Property

i. Prior Inventions . Any intellectual property, including, but not limited to, any ideas, inventions, patents, trademarks, service marks, copyrights, creations, know-how, work product, and other developments or improvements, if any, patented or unpatented, that Employee, alone or with others, conceived, created, invented, developed, reduced to practice, or caused to be conceived and or caused to be reduced to practice prior to the earlier of (a) commencement of Employee’s employment with Company or (b) when Employee first provided services to Company, is listed on  Schedule I  attached hereto (“Prior Inventions”).

ii. Pre-Existing Work . If, in the course of Employee’s relationship with Company, Employee uses, relies upon, provides, or incorporates any Prior Invention or any other intellectual property Employee owns, or in which Employee has an interest, into any idea, invention, patent, trademark, service mark, copyright, creation, know-how, work product, and other development or improvement conceived, created, invented, written, developed, furnished, produced, or disclosed in whole or in part, alone or with others, whether or not during working hours, by Employee during the term of Employee’s employment with Company, Employee hereby grants Company, under all of Employee’s intellectual property and proprietary rights, the following worldwide non-exclusive, perpetual, irrevocable, royalty free, fully paid up rights: (a) to make, use, copy, modify, create derivative works of such intellectual property; (b) to publicly perform or display, import, broadcast, transmit, distribute, license, offer to sell, and sell, rent, lease or lend copies of the intellectual property, and derivative works of the intellectual property; and (c) to sublicense the rights in this Subsection 2(iii) to third parties.

iii. Work made for hire. Any work of Employee for which copyright could be claimed developed in the course of Employee’s employment with Company will be deemed “work made for hire” under federal copyright law and all ownership rights to such work belongs exclusively to Company. To the extent any invention does not qualify as a work for hire under applicable law, and to the extent, any invention is subject to copyright, patent, trade secret, or other proprietary right protection, Employee hereby assigns, and agrees to assign, all rights therein to Company.

iv. Required undertakings . Employee agrees, both while an employee of Company and thereafter, to assist Company and its owners and Affiliates, at Company’s sole expense, in any and all attempts to obtain patents, copyrights, and/or trademarks or other intellectual property protection on any work Employee participated in developing and agrees to execute all documents necessary to obtain such rights in the name of or to transfer such rights to Company. If, because of Employee’s mental or physical incapacity or for any other reason whatsoever, after the Company’s reasonable effort to secure Employee’s signature, Company is unable to secure Employee’s signature to apply for or pursue any patents, copyrights, or other protection for any invention assigned to Company under this Agreement or otherwise, Employee irrevocably designates and appoints Company and its duly authorized officers as Employee’s agent and attorney-in-fact to act for Employee and on Employee’s behalf and stead to file any applications and to do all other lawfully permitted acts to further the prosecution and issuance of any patents, copyrights, or other protections with the same legal force and effect as if executed by Employee.

v. Limited Exclusion . This Section 2 does not apply to any inventions or intellectual property for which no equipment, supplies, facility or Confidential Information of Company was used, and which was developed entirely on Employee’s own time, and (a) which does not relate (i) directly or indirectly to the business of Company or (ii) to Company’s actual or demonstrably anticipated research or development, or (b) which does not result from any work performed by Employee for Company.

3. Non-disparagement

Subject to Section 5, Employee agrees that during and after Employee’s period of employment with Company Employee will not, publicly or privately, disparage or defame Company or its Affiliates, or any of Company’s or its Affiliates’ employees, officers, governors, members or agents.

4.  Injunctive Relief

In the event of a breach or threatened breach of any covenant in Sections 1, 2, or 3, Employee agrees that Company will be irreparably harmed, that money damages alone cannot adequately compensate Company, and that Company shall be entitled to temporary and injunctive relief as well as all applicable remedies at law or in equity available to Company against Employee including if the Company is the prevailing party in an action to enforce the terms of this Agreement, reasonable attorneys’ fees and costs incurred in bringing any action against Employee or otherwise enforcing the terms of this Agreement. Employee further agrees that in any such action, Company shall be entitled to relief without posting any bond or security.

  5.  No Unlawful Restriction  

Employee understands and agrees that nothing in this Agreement or otherwise is intended to or will prevent or interfere with Employee’s ability or right to (a) provide truthful testimony if under subpoena to do so, (b) file any charge with or participate in any investigation or proceeding before the U.S. Equal Employment Opportunity Commission or any other federal, state or local governmental agency, (c) engage in any conduct protected under the National Labor Relations Act, or (d) respond to a subpoena, court order or as otherwise provided by law.

  6.  Miscellaneous

i. At-will employment . Employee’s employment with Company is “at will,” which means it may be terminated at any time and for any or no reason, at the option of either Employee or Company.

ii. Assignment . All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the Parties, except that the duties and responsibilities of Employee under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Employee.

iii. Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

iv. Entire agreement . This Agreement together with the Employment Agreement effective as of [DATE] sets forth the entire agreement of the Parties and supersedes any and all prior agreements and understandings concerning Employee’s employment by Company. This Agreement may be changed only by a written document signed by Employee and an authorized representative of Company.

v. Governing law . This Agreement shall be governed by, and construed and enforced in accordance with, the substantive and procedural laws of the State of Minnesota without regard to rules governing conflicts of law.

vi. Jurisdiction . Employee irrevocably and unconditionally (a) agrees that any legal proceeding arising out of this Agreement shall be brought in a court of general jurisdiction in the State of [JURISDICTION], (b) consents to the non-exclusive jurisdiction of such court in any such proceeding, and (c) waives any objection to the laying of the venue of any such proceeding in any such court. The employee also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers.

vii. Attorneys’ Fees . In the event of any litigation or other proceeding concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this Agreement, the breach thereof or the interpretation hereof, the prevailing party will be entitled to recover from the other party reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment or award rendered therein. The “prevailing party” means the party determined by the court to have most nearly prevailed, even if such party did not prevail in all matters, not necessarily the party in whose favour a judgment is rendered. Further, in the event of any breach by Employee under this Agreement, Employee shall pay all the expenses and reasonable attorneys’ fees incurred by Company in connection with such breach if the Company is the prevailing party.

viii. Counterparts . This Agreement may be executed in any number of counterparts (including facsimile counterparts or counterparts delivered by electronic transmission (e.g., PDF attachment)), each of which shall be an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date first above written.

Employee Name

Company Name

So, now we understand the importance of an employee intellectual property agreement and how it can affect the company if such an agreement is not drafted. This agreement acts as a layer of protection to the company especially a new company in avoiding any future problems. Much care must be given to the intellectual property of an employee. It can either help in the growth or destruction of the company.

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Employer and employee ownership of intellectual property: not as easy as you think.

Tina A. Syring and Felicia J. Boyd, Barnes & Thornburg, LLP

Employers should not rely on assumptions of ownership

Intellectual property created during the course of an employee's employment does not equate to the employer's automatic and exclusive ownership of any and all intellectual property. In fact, employers who mistakenly believe that they own such property automatically can pay an expensive price – monetarily and through the loss of inventions or improvements – for failing to protect such intellectual property or effectively securing the rights from employees.

Critical to an employer's ownership of intellectual property is a written agreement with the employee, one which specifically assigns to the company any and all intellectual property created by the employee during the course of his or her employment with the company. Such an agreement is often called an "assignment of inventions" or "ownership of discoveries" agreement. Absent such an agreement, the employee may have ownership rights in the intellectual property he or she created while working for the company, even if the individual was specifically hired to invent a particular product or process.

To avoid disputes over whether sufficient consideration exists to support the validity of the agreement, employers should require that the agreement is executed prior to the commencement of the employment relationship, and the agreement should reflect that but for the employee's execution of the agreement, the company would not employ the individual. In the event the agreement was not entered into contemporaneous with the start of employment, the employer will need to provide additional, sufficient consideration to support the agreement. Such consideration can include, for example, a promotion, a one-time bonus, or, for example, a grant of restricted stock options. If entered into after the employment relationship has been established, the consideration must be more than a nominal amount in order to support the agreement. A dollar is not likely to constitute sufficient consideration.

Also important to the agreement is the inclusion of an addendum, wherein the individual identifies all intellectual property in which he or she has an ownership interest prior to the commencement of his or her employment with the company. If the agreement is executed after the commencement of employment (and sufficient consideration has been provided as noted above), the employer still should have the employee identify all intellectual property he or she believes to own. In the event the employee identifies and claims ownership of intellectual property that has been created during the course of employment and with company resources, and claims ownership to such property, the company should immediately work to determine if the employee truly owns it or if it is owned by the company. By doing this at the outset of the relationship and/or execution of the agreement, employers are proactively mitigating possible arguments later down the road about who owns what.

Employers also should make sure the written agreement complies with applicable state laws. For example, certain states require that the agreement include clear language carving out intellectual property created by the employee (i) entirely on his or her own time, (ii) without the use of any company property (e.g., equipment, supplies, facilities or confidential, trade secret information), (iii) that does not relate directly to the company's business or anticipated research or development, and (iv) does not result from the individual's work performed for the company. Some employers require employees to continually disclose intellectual property created outside the realm of his or her employment relationship. Again, this is done to avoid future arguments as to whether the company actually owns such intellectual property.

Next, employers should include language detailing what happens if the employee misappropriates and/or infringes upon the company's ownership of intellectual property. The agreement should contain a remedies and relief provision, which includes the right to seek injunctive relief and the recovery of attorney's fees and costs upon demonstration of the employee's breach. Often times, employers forget to include such language and, as a result, there is no meaningful "teeth" to the agreement, causing some employees to be bold in their self-interested actions.

Finally, employers should remember to use similar "assignment of inventions" or "ownership of discoveries" provisions or agreements when working with independent contractors. The independent contractor agreement should clearly state that the independent contractor's work of authorship, finished product, invention, or other intellectual property will be owned exclusively by the company, free of any royalty fee or license. The agreement also should state the independent contractor "hereby assigns" all rights in the intellectual property so to eliminate any issues if and when the company pursues a patent or copyright.

Tips for the employer:

• Determine if you have a written agreement with your employees and independent contractors. If so, does it include an "assignment of inventions" or "ownership of discoveries" provision? Does that provision clearly state the employee "hereby assigns" all rights and ownership in the intellectual property, trademarks and/or copyrights?
• Make sure the written agreement is supported by sufficient consideration. Was the agreement executed prior to commencement of employment or later? If later, what additional consideration did the company provide to the employee in exchange for his or her execution of the agreement?
• Have prospective employees and/or independent contractors clearly identify, in writing, any intellectual property they may own prior to commencing the employment or contractual relationship.
• Periodically have employees update and identify, in writing, any intellectual property in which they believe they own and make sure such intellectual property was created independent of the company's resources and the employees' duties.
• Conduct exit interviews with employees and independent contractors, reminding them of their contractual obligations.

Opportunities exist for employees to own their ideas

Where there is no employment agreement, policies or written agreements to assign rights to the employer, employers may still successfully assert ownership rights in employee inventions created during the course of the employee's employment. The lynchpin to an ownership analysis is often whether the idea was created "in the course of the employment." It is not sufficient for an employer to point to a paycheck and lay claim to all of an employee's ideas. Rather, the idea at issue must have been created during the course of the employment relationship . Thus, close examination of the relationship may reveal that the employee owns the ideas because they were developed outside of the employment relationship.

A primary focus of this analysis will be the reason for the hire of a particular employee. If the employee was hired to create intellectual property as part of their job, the employer will be the owner of the intellectual property. Thus, examination of the written employment contract and the duties described therein can be determinative of the ownership inquiry. Absent a written agreement, the courts will look to the nature of the position and whether the employer gave directives or set goals for the employee to achieve. Ideas which stem from these directives will generally belong to the employer. Consideration needs to be given to all the circumstances.

For example, care must be taken when asserting ownership simply because the idea was conceived or developed at home, during non-working hours or using personal equipment. The fact that an employee used the employer's equipment is not enough by itself to show that the employer should own the intellectual property created with the use of that equipment. Similarly, it is not enough for the employee to claim ownership simply because he or she used their personal equipment or conceived the idea at home. The analysis will delve deeply into the role the employee played at the company and whether the idea stemmed from that role. Thus, the employee in the shower at home who suddenly conceives of the long sought after solution he has been working on at his job cannot claim ownership of the idea simply because the idea arose in the shower. Likewise, an employer cannot claim rights to an employee's creation of a computer software game built at home where the employee's work role bears no relationship to game creation, even where the employee took notes during work hours related to his game ideas or tested those ideas on employer-owned computers.

One must also consider whether there is, in fact, an employee-employer relationship. In many cases, the hire is one of an independent contractor. This too is a multi-factor analysis, but one with significant consequences. Independent contractors generally own what they conceive in the absence of written agreements specifically transferring ownership of the same to the contractor. For example, under federal copyright laws, ownership of copyrightable works is generally held by the author (the individual who creates it), with the express of exception of works made by employees during the course of their employment. This exception does not apply to works made by independent contractors. Independent contractors will own the copyright unless: (1) the work falls within one of nine statutorily specified types of works and there is a written "work-for-hire agreement" between the creator of the work and the company who commissioned its creation; or (2) the copyrights are assigned in writing by the contractor. The nine types of works that qualify as works for hire are narrow: a contribution to a collective work, part of a motion picture or other audiovisual work, a translation, a supplementary work, a compilation, an instructional test, a test, answer material for a test, and an atlas. Fall outside these categories and the copyright belongs to the independent contractor.

Patent ownership, like copyright, is presumptively owned by the inventor, i.e. the employee inventor. Employment agreements will usually require assignment of ideas, including patentable ones, to the employer. Even if such an agreement is not in place, employee ownership may not result in exclusivity of use or exploitation of that idea. The employer may still hold "shop rights" in the process or invention whose development it supported. The idea of shop rights simply gives an employer who provided funding, materials, tools, or work time for the project nonexclusive royalty-free rights to use an invention. The employer may not assign or transfer any shop rights to another unless expressly allowed, with the exception of a transfer of the employer's business as part of a business sale.

Contracts will play a role in the ownership of trade secrets as well. Absent a contract, state law will govern ownership. This is a patchwork of laws and decisions which may assist the employee to assert ownership over a trade secret or attack the notion that the idea is a trade secret, where a contract does not exist or is not sufficiently specific with respect to the idea at issue. If the idea is not protected by copyright, patent or trade secret law, the idea is free for any and all to take, regardless of one's current or former employment relationship.

Finally, trademarks and slogans are not typically the subject of ownership disputes. Trademarks belong to those who use them, not those who create them. Thus, the company which uses a mark to promote a service or good will own the mark and the goodwill associated with that mark. Disputes over trademark ownership in an employee-employer relationship would be atypical.

Tips for the employee:

• Examine your employment agreement. What did you agree to do? Understand what you sign before you sign it and seek legal advice if you are unsure of what rights you have retained.
• Look at any other agreements executed and determine whether consideration was paid for the execution of those agreements. Agreements signed after you are employed will be open to challenge if additional, or insufficient, consideration was not provided for these new obligations.
• Keep records documenting the creation of your ideas on your own time, with your funds and your own equipment. Do not rely on memory and do not assume that ideas worked on at home or on your own time belong to you.
• Review non-compete agreements to assess their enforceability and reasonableness. Certain states will not enforce any non-compete agreements even those agreements which have the effect of hindering the freedom of employee job changes and which are not labeled as "non-compete" agreements.
• Were you an employee or an independent contractor? The difference matters in determining ownership and should be reviewed by a legal professional.

This Barnes & Thornburg LLP article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

About the authors

Tina A. Syring is a partner in Barnes & Thornburg LLP's Minneapolis office and a member of the firm's Labor and Employment Law Department. Ms. Syring counsels clients on a variety of labor and employment issues, drafts and negotiates executive compensation agreements, and works with employers on the impact of social media. Ms. Syring was selected for inclusion in the 2011, 2012, 2013 and 2014 editions of Minnesota Super Lawyers®, and was named a Minnesota Rising Star by Minnesota Law & Politics. In 2013 and 2014, Chambers USA recognized Ms. Syring as an up and coming lawyer in the area of Labor & Employment: Minnesota.

Felicia J. Boyd is a partner at Barnes & Thornburg LLP's Minneapolis office and is co-chair of the firm's Intellectual Property Department. Ms. Boyd focuses her practice on complex intellectual property litigation and has led plaintiff and defense litigation on a large variety of claims related to patents, copyrights, trademarks, and trade dress. Ms. Boyd was recognized by Chambers USA for her IP Litigation practice and has been included in The Best Lawyers in America for the years of 2010-2015 in the field of intellectual property law. In 2013, Minnesota Lawyer named Ms. Boyd as one of its "Attorneys of the Year" and Minnesota Monthly recognized her as one of "Minnesota's Best Lawyers."

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Intellectual Property Agreement (Free Sample)

Here is What's in the Agreement for Intellectual Property:

• An easy-to-customize agreement to protect your intellectual property
• Agreements for both employee and contractor business relationships
• Created (and approved) by legal experts

Intellectual Property Agreement

This Intellectual Property Assignment Agreement (the “Agreement”) is entered into ________________ (the “Effective Date”) by and between ____________________________ (the “Employee”) located at _____________________________ and _________________________(the “Employer”) located at ____________________________, individually referred to as “Party” and collectively as “the Parties.”

The Parties agree to the following: 

Intellectual Property. Employee agrees to assign to the Employer all present and future rights, title, and interest to all intellectual property (“Intellectual Property”) created or discovered during the course of Employee’s employment with the Employer.  Intellectual Property includes, but is not limited to, algorithms, code, concepts, developments, designs, discoveries, ideas, formulas, improvements, inventions, processes, software, trademarks, and trade secrets. Intellectual Property also includes the tangible embodiments (e.g. – drawings, notes) of any intangible items.

Prior Inventions. Intellectual Property that existed prior to the Employee’s employment, for which the Employee has a right, title, or interest (collectively the “Prior Inventions”) will remain the exclusive property of the Employee.  The Employee agrees that all Prior Inventions are included in this Section 2.  If no Prior Inventions are listed in this Section 2, the Employee represents that no Prior Inventions exist.

Prior Inventions

___________________________________

Patent and Copyright Registrations. The Employee agrees to cooperate with the Employer to do whatever is reasonably necessary to obtain the patents and copyrights required to secure the Employer’s ownership rights in the Intellectual Property.  The Employee will cooperate with the Employer during the course of the Employee’s employment with the Employer as well as after termination of this Agreement.

Term. This Agreement will commence upon the Effective Date as above-stated and will remain in effect until the Employee is no longer employed by the Employer.  

Following termination of this Agreement, the Employer will have exclusive ownership rights to all of the Employee's post-employment Intellectual Property that arises from or directly relates to the Employee's work for the Employer.

Return of Data and Documents. Upon termination of this Agreement, the Employee agrees to immediately return all tangible embodiments of the Intellectual Property, including but not limited to data, drawings, documents, and notes developed during the course of the Employee’s employment.  The Employee will not make copies or attempt to recreate the tangible embodiments.

Assignment. The Parties may not assign their rights and/or obligations under this Agreement.

Choice of Law. This Agreement will be interpreted based on the laws of the State of _____________________, regardless of any conflict of law issues that may arise.  The Parties agree that any dispute arising from this Agreement will be resolved at a court of competent jurisdiction located in the State of _______________________.

Complete Contract. This Agreement constitutes the Parties entire understanding of their rights and obligations. This Agreement supersedes any other written or verbal communications between the Parties. 

Severability.  In the event any provision of this Agreement is deemed invalid or unenforceable, in whole or in part, that part shall be severed from the remainder of the Agreement and all other provisions should continue in full force and effect as valid and enforceable. 

Successors and Assigns. This Agreement will be binding upon the Employee’s successors, heirs, and assigns for the benefit of the Employer and the Employer’s successors, heirs, and assigns.

Waiver.  Neither Party can waive any provision of this Agreement, or any rights or obligations under this Agreement, unless agreed to in writing.   If any provision, right, or obligation is waived, it is only waived to the extent agreed to in writing.

All notices pursuant to this Agreement must be sent by email with return receipt requested or certified or registered mail with return receipt requested.

All Notices shall be sent as follows:

______________________________

[ Remainder of this page intentionally left blank. Signature page follows. ]

The Parties agree to the terms and conditions set forth above as demonstrated by their signatures as follows:

Signed: _____________________________________

Name: _____________________________________

Date: _____________________________________

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IP Assignment Agreement Review

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ContractsCounsel has assisted 35 clients with intellectual property assignment agreements and maintains a network of 61 intellectual property lawyers available daily.

An intellectual property (IP) assignment agreement is a legal contract between a party that transfers its intellectual property rights (assignor) to another party (assignee). This agreement outlines the specifics of the transfer, including the type of IP, the scope of the assignment , compensation, and conditions.

How Do I Review an IP Assignment Agreement?

The purpose of an IP assignment agreement is to facilitate the transfer of patents, copyrights , trademarks , and other valuable IP. For this reason, it is vital that an IP assignment agreement is thoroughly reviewed before the parties execute the contract.

To review an IP assignment agreement, follow these steps:

• 1. Read entire contract Before agreeing to sign an IP assignment agreement, you need to read the entire document. You should familiarize yourself with the basic terms found in the contract and ensure that the provisions laid out in the contract accurately represent the agreement between the parties.
• 2. Note key terms and provisions Identify the key terms of the agreement like the type of intellectual property and the rights and restrictions that are attached to the property. Make sure that you understand these terms and make a list of any provisions you’re unsure about or that may need to be readdressed and further negotiated.
• 3. Verify financial terms Be sure to double-check any provisions that include financial terms.
• 4. Be prepared to negotiate If you find any terms that need clarification, modification, or adjustments, prepare to negotiate with the other party to reach an agreement that is fair for both sides.
• 5. Seek legal help Intellectual property assignment agreements can be complex legal documents . Before signing this contract, you should consider seeking legal advice from an experienced intellectual property lawyer . An attorney can provide guidance, review the contract for mistakes, and offer recommendations.

Reviewing an IP Assignment Agreement requires an eye for detail and a deep understanding of the legal implications of transferring intellectual property ownership rights.

When you hire an attorney to review this type of contract, you are ensured that your rights and interests are protected. An intellectual property lawyer will have experience with assignment agreements and will know what terms must be included to make the contract legally binding and enforceable.

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What Should I Look for in an IP Assignment Agreement

A comprehensive IP assignment agreement should include the following key terms:

• Party information The names and contact information of the assignor and assignee.
• Intellectual property description A clear and detailed description of the intellectual property being transferred, including the type of IP like whether it's a patent, copyright, trademark, or other type.
• Scope of assignment The extent of the rights to the intellectual property being transferred like whether the assignment encompasses all rights or involves some restrictions.
• Consideration The monetary payment, equity, royalties, or other value being exchanged for the assignment.
• Warranties and representations Any assurances made by the assignor regarding the authenticity of the IP and its non-infringement.
• Termination clause The circumstances under which the assignment can be terminated by either party. This section should include any required notice of termination and consequences for terminating before the contract term is up.
• Governing law and jurisdiction The parties should agree upon what laws and jurisdiction will govern the agreement in case of a dispute.
• Confidentiality Provisions to protect any sensitive information shared between the parties.
• Recordation Whether the assignment will be recorded with relevant authorities like the United States Patent and Trademark Office (USPTO).

If you are unsure what provisions should be added to your agreement to best protect your interests, always consult with an experienced intellectual property attorney.

How Does an IP Assignment Agreement Work?

To successful assign intellectual property to an assignee through an assignment agreement, the following process should be followed:

• The assignor (current owner of the IP) and assignee (new owner of the IP) must negotiate and agree on the transfer, including terms like compensation and assignee rights.
• A lawyer familiar with intellectual property assignment should draft the contract incorporating the agreed-upon terms and ensuring legal compliance.
• Both parties are encouraged to thoroughly review the drafted agreement to ensure accuracy, clarity, and mutual understanding. Negotiations can address and fix any discrepancies.
• Once both parties are satisfied with the agreement, they sign the contract, indicating their consent to the terms. Depending on the laws of the jurisdiction, the signatures may need to be notarized.
• Once the contract is signed, the assignor transfers ownership rights to the assignee.
• Depending on the jurisdiction and type of IP, the assignment may need to be recorded with a specific government agency to establish public notice.

Each step in this process is vital to transfer intellectual property rights legally and securely between parties.

What are the Three Major Methods of IP Assignment?

IP assignment typically occurs through three major methods:

• Assignment deed A formal written agreement where the assignor expressly transfers ownership rights to the assignee.
• Incorporation by reference An agreement refers to another document like an employment agreement , that contains IP assignment clauses .
• Employment agreement When an employee creates intellectual property in the course of their employment, an employment agreement should include provisions that assign ownership of the created IP to the employer.

Each of these methods are used in different scenarios with different purposes. Whenever you are planning to assignment intellectual property rights, always consult with an attorney to determine which method is right for you.

Should I Hire a Lawyer to Review an IP Assignment Agreement?

Yes. Even though it is not legally required for a lawyer to draft and review an IP assignment agreement, it is highly recommended to have a legal professional create or at least review this contract.

Hiring a lawyer to review your contract provides the following benefits:

• Legal expertise Lawyers who specialize in intellectual property will understand assignment contracts and the legal implications of IP assignment. Your lawyer can identify potential weaknesses in the agreement that non-legal professionals might overlook.
• Customization Every intellectual property assignment agreement will be different depending on the type of IP and the needs of the parties. A lawyer can tailor the agreement to suit the goals of the parties involved.
• Risk mitigation A lawyer's review helps identify and address potential legal risks, protecting your interests and reducing the likelihood of disputes.
• Advocacy If certain terms need to be revised, a lawyer can negotiate more favorable terms on your behalf.
• Confidence in the contract Knowing that a legal professional has thoroughly reviewed the agreement can provide you with confidence and peace of mind.

An IP assignment agreement can have significant legal and financial implications for the assignor and assignee. Any mistakes could lead to disputes between the parties or even an infringement lawsuit.

When you hire a lawyer to review the IP assignment agreement, the lawyer will ensure that the contract is fair, follows all applicable laws in the jurisdiction, and will be legally enforceable if a dispute arises.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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The ABCs of CIIAAs: Protecting Employee-Generated IP

Companies seeking to avoid employment disputes and to secure intellectual property rights to their employees’ inventions should make sure that all employees have signed confidentiality and inventions assignment agreements .  These agreements are often referred to as Confidential Information and Inventions Assignment Agreements , or “ CIIAAs ” (sometimes also known as Proprietary Information and Inventions Assignment Agreements, or “ PIIAAs ”). You can generate your own agreement via Cooley GO Docs:  Form of Employee Confidential Information and Inventions Assignment Agreement

Strong CIIAAs should include the following provisions:

Definitions of Confidential Information and IP Rights

CIIAAs should address fundamental questions such as:  (1) What type of confidential information, inventions and intellectual property does the agreement cover, and (2) What are the employee’s obligations and the employer’s rights with respect to such information and IP?  Ideally, you should tailor the definition of “confidential” or “proprietary” information to your particular industry—what is confidential information is likely to differ between, say, software companies and life sciences companies.  At a very general level, confidential information should include all confidential knowledge, data, and information of your company.  Inventions should include all ideas, concepts, materials, processes, data, programs, designs, and copyrightable works, including all intellectual property rights in such inventions, and intellectual property rights include the patents, copyrights, trademarks, trade secrets, mask works and other rights recognized by the laws of any state or country.

Nondisclosure

Confidentiality provisions serve as a cornerstone of a good CIIAA.  A CIIAA should require employees to hold the company’s confidential information in the strictest confidence and forbid them from using or disclosing that information.

Assigning IP:  The Magic Words

To properly protect yourself, your company must ensure that the CIIAA includes an assignment from the employee to the company of any right, title, or interest in the company’s inventions and IP.  The provision should cover inventions created by the employee during his or her employment with the company.  Note that in some states, such as California, an employer cannot require an employee to assign all inventions created during his or her employment.  As a result, in California, the CIIAA should require assignment of those inventions that the employee generates using any of the company’s time or resources, or that fall within the company’s business or research and development.  The key language—i.e., the “magic words”—that we want to see in every CIIAA is the actual assignment by the employee of his or her IP rights to the company, coupled with an agreement to assign in the future (when any such inventions are made, conceived or reduced to practice).  For example, “ I hereby assign, and agree to assign in the future (when any such inventions or intellectual property rights are first reduced to practice or fixed in a tangible medium, as applicable), to ABC Corp. all my right, title, and interest in any inventions made, conceived, reduced to practice, or learned by me, alone or with others. ”

Most CIIAAs contain a “carve-out” provision by which employees list all of their prior inventions (before starting work with your company) that they intend to specifically exclude from their assignment of IP to the company.  You should take a close look—and engage IP counsel as necessary—at what a prospective employee intends to carve out as prior inventions to make sure that there is no overlap between those prior inventions and the type of IP your company is aiming to produce.  You can be sure that prospective investors, acquirers, and the like will be doing the same.  In addition, your CIIAA should grant your company a broad license to any prior inventions that the employee uses in any company machine, process or other work.

Nonsolicitation

All employees should agree to refrain from certain activities that could put your company at a competitive disadvantage in the marketplace.  Specifically, they should agree, during the term of employment and for some reasonable period of time thereafter, not to solicit or encourage any of your employees to leave their employment with your company; hire or engage your employees; or solicit your customers or prospective customers.  You want to protect against former employees using contacts or confidential information they acquired while working for your company to steal your business or goodwill.  Note, an agreement to “not hire” an employee may not be enforceable in all states (as opposed to agreeing to “not solicit” an employee).

Noncompetition

CIIAAs should also prevent employees from engaging in business activities that compete with your company.  At a bare minimum, this prohibition should last through the entire term of the employee’s relationship with the company.  In some instances, you will want the non-compete to extend for a year or more past the employee’s time with the company (going far beyond a year may backfire, because unreasonable durations may be held unenforceable in court).  Beware that covenants not to compete are not enforceable everywhere—for example, they are not enforceable in California except in very narrowly defined circumstances.   State law governs these agreements, and states view non-competes in different ways.  Accordingly, you should consult with employment counsel to make sure you use the appropriate agreement for each of your employees.

Tailoring and Enforcing CIIAAs

Many emerging companies ask how much to vary their CIIAAs, depending on the incoming employee’s role.  For example, a non-compete is likely more important for a CTO than a new secretary.  One approach is to use two different forms—one for use with high level employees, engineers, software developers and other employees who are hired to design or create the company’s products and technologies and another form for use with lower level employees and employees who provide general administrative services.   Most companies, however, have all employees sign the same form.  Bear in mind that you should use different versions of your form agreements which have been vetted by local counsel for use with employees in different states and consult with counsel to determine the optimal approach for tailoring and enforcing CIIAAs to best suit your company’s needs.  Best practice, however, is that once you have developed your form CIIAA, you do not negotiate that form with each individual employee.

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Complete Guide: Filling Employee IP Assignment Agreement – Cognizant

How to fill employee intellectual property assignment agreement cognizant.

Employee intellectual property assignment agreements are vital documents that protect a company`s interests when it comes to the inventions and works created by its employees. This agreement ensures that any intellectual property developed by an employee while working for the company is assigned to the company and not the individual employee. If you`re an employee at Cognizant, it`s essential to understand how to fill out this agreement correctly to protect your employer`s intellectual property rights. Below, we`ll provide a step-by-step guide on how to fill out the employee intellectual property assignment agreement cognizant.

Step 1: the Agreement

Before filling out the agreement, it`s crucial to understand its purpose and implications fully. Take the time to read through the document carefully and consult with an attorney if you have any questions or concerns. The will ensure that are aware of obligations regarding property during your at Cognizant.

Step 2: Provide Accurate Information

When filling out the agreement, it`s essential to provide accurate information about yourself and your role at Cognizant. That legal name, title, and are stated in the Providing information help avoid any disputes or regarding the of property in future.

Step 3: Disclose Prior Inventions

If you have any prior inventions or intellectual property that you have developed before joining Cognizant, it`s crucial to disclose these inventions in the agreement. To disclose prior property in the agreement.

Step 4: Legal Advice

Filling out employee intellectual property agreement be especially if have or about its terms. advisable to legal advice from an with in property law. An can review the and that your are while with Cognizant`s requirements.

Filling out an employee intellectual property assignment agreement with Cognizant requires careful attention to detail and a thorough understanding of its implications. By the steps above and legal if you can that the is and in with Cognizant`s Remember, agreement is to both you and by defining ownership of property during your employment. Take time to fill out agreement and to any disputes in future.

Employee Intellectual Property Assignment Agreement

This Employee Intellectual Property Assignment Agreement (the “Agreement”) is into between Cognizant (the “Company”) and the employee (the “Employee”) with effective date of _____________ (the “Effective Date”).

In of the Employee’s employment with the Company and the paid, the of which acknowledged, the agree as follows:

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

Top 10 Legal Questions About Filling Employee Intellectual Property Assignment Agreement with Cognizant

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Patent Assignments in Employment Agreements – a Sometimes Overlooked, but Always Important Component

• November 16, 2021

By: Peter C. Lando and Thomas P. McNulty

With assistance from summer intern Tyler Gruttadauria

Businesses, of course, have a strong interest in owning intellectual property created by their employees. Intellectual property—patents, copyrights, and other confidential and proprietary information including trade secrets—is often the most valuable asset a business can own, so it is important to ensure that employee developments and inventions belong to the employer. In the United States, inventions presumptively belong to the inventor, and any transfer of ownership (“assignment”) must be in writing to be effective. Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in intellectual property created by an employee. Employers often provide employment agreements with assignment clauses that are intended to give the employer rights in inventions made by the employee during the period of employment. These assignment clauses are often treated as mere boilerplate, yet the precise wording of these clauses can have major impacts on the effectiveness and limitations of any assignment.

Ensure that you have an Assignment and not a mere promise to assign

When drafting an agreement to have an employee assign future inventions, it is vital that the language used in an assignment clause states a present-tense, actual assignment. Phrases such as “hereby assign,” “agrees to grant and does hereby grant,” or that inventions “shall belong” to the employer and employee “hereby conveys, transfers and assigns” have been deemed by the courts to be effective to transfer ownership of a future invention without the need for any subsequent agreement. Ownership effectively transfers immediately, once the invention has been made. Assignment clauses that use future tense language, on the other hand, generally will require an additional agreement to result in a transfer of ownership of the invention, and any intellectual property (“IP”) covering the invention. Terms such as “will assign,” “agree to assign,” “will be assigned,” and the like, have been found by numerous courts to constitute nothing more than a promise or contract to assign an invention in the future, but not to serve as an actual assignment.

In addition to the wording used in the assignment clause, the language of any carve-outs should also be scrutinized. Agreements may contain a carve-out clause to exclude a new employee’s prior inventions from being assigned, or to prevent assignment of inventions unrelated to the employee’s work from being swept into the assignment provision. A broad, non-specific carve-out clause may prevent an employee agreement from automatically assigning inventions of that employee, even where the assignment clause includes the proper “hereby assign” type of language, because this leaves open the possibility that an invention is not subject to the assignment clause. This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are governed by Federal Circuit law, resolution of contractual ambiguities is governed by state law, which varies considerably regarding the admissibility of such extrinsic evidence.

Failure to obtain an automatic assignment can have negative consequences

An assignment clause that is deemed ineffective to automatically transfer ownership of an invention can create significant problems for an employer. In such circumstances, a business would not have standing to bring a patent infringement suit until it has taken the necessary steps to obtain a valid assignment. This may require the filing of a breach of contract claim against the employee to require fulfillment of the contractual obligations, including execution of assignment documents. In the interim, infringers could continue practicing the invention; and if the infringing activity has gone on long enough, the six-year statute of limitations may prohibit full recovery of damages. Further, if an inventor/employee has made only a promise to assign, and instead transfers ownership to a third party who lacks knowledge of the assignment obligation, that second transfer of ownership may well prevail, leaving the original employer with no exclusionary rights at all.

Ineffective assignment provisions can affect more than just litigation. Businesses and investors typically conduct IP due diligence when entering into transactions involving the investment in or sale of IP assets, company divisions or entire entities, and any weaknesses in assignment provisions may affect the perceived value of the IP assets and/or business being considered.

Do not count on the “Hired-to-Invent” doctrine to result in ownership of employee inventions

Some employers do not require employees to sign an agreement containing an assignment of inventions because they believe that they automatically own inventions that they paid someone to create. Under the “hired-to-invent” doctrine, this will only occasionally be correct. Employees or contractors hired (and paid) specifically to create a particular invention or to solve a particular problem may be deemed to have implicitly assigned their rights in the invention to the employer. This is a highly fact-based determination, however, and applies only to inventions created in response to the specific thing the employee was hired to do. A mere title of “researcher” or even “inventor” will not, standing alone, suffice to ensure ownership of inventions by the employer. Further, until a court has ruled one way or the other, an employer relying on this doctrine will not have any certainty in its rights to the invention. Should the court rule against the employer, it would lose the exclusionary rights it believed it possessed and may face an infringement lawsuit from the employee or anyone to whom the employee may have assigned the invention/patent rights.

Absent an effective assignment, an employer may obtain limited “shop rights” in inventions made using the employer’s time, materials, facilities or equipment. Shop rights take the form of an implied license to practice the invention, precluding the employee from obtaining damages or injunctive relief on a patented invention. Shop rights are limited, however, and do not allow the employer to prevent others from competing by practicing the invention. Further, shop rights cannot be transferred via license or assignment, effectively devaluing the IP assets and, perhaps, the company.

Other Considerations

In addition to having the proper “hereby assign” language, employment contracts should ensure that inventions , rather than just patents or patent applications, are subject to the assignment clause. Language stating that all inventions, improvements, discoveries, and the like, whether or not patentable or copyrightable, are subject to the assignment, ensures that information that could be protected through other regimes, such as trade secrets, automatically become the property of the employer.

Intellectual property has taken on an ever-increasing role in determining the value of a business. A company’s ability to develop and protect its intellectual property is a key factor in its future success. Given this, it is important that businesses recognize that assignment provisions of employment agreements are not mere boilerplate, but instead may be one of the most important legal provisions that ultimately can impact not only an employment arrangement, but the value of the business itself.

• Peter C. Lando
• Thomas P. McNulty

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Protecting IP Ownership and Rights in Brazil: 7 Things Employers Need to Know

Jun 7, 2023

Christina Marfice

Table of contents.

You already know how important your company's intellectual property is. Your inventions, designs, patents, trademarks, copyrights, and trade secrets are the foundation of your success, giving you a competitive edge over other businesses.

But when you expand your global operations into new countries, IP protection becomes much more complex. Every country has its own laws and regulations surrounding IP protection, and Brazil is no different.

Protecting IP ownership and rights in Brazil takes know-how around a whole new set of laws. And it's vital to learn them—if you don't protect your IP in Brazil, you could end up facing legal disputes, loss of market share, and other damages.

Before you start hiring in Brazil , read this guide—our primer will give you all the basics on protecting your company's IP rights and ownership in Brazil. Below are seven things you need to know about IP protection in Brazil, as well as frequently asked questions (a quick disclaimer before we get started: our guide is for informational purposes, and isn’t intended to provide legal advice).

1. Piracy is common in Brazil

The United States Government has placed Brazil on its Special 301 watch list . Even though Brazil belongs to all major global intellectual property conventions, counterfeiting, and piracy (especially online piracy) are both common in Brazil. The country has tough laws against violating others' IP rights, but enforcement can be sporadic.

That's why it's so important to take all possible steps to protect your company's IP when operating in Brazil (more on that below).

2. Protection of IP registered in other countries doesn't automatically extend to Brazil

IP protection in your business's home country doesn't automatically extend across international borders, and you may need to obtain IP protection in other countries where you plan to do business—including Brazil.

In Brazil, you can apply for protection for:

• Invention patents
• Utility model patents
• Industrial designs
• Geographical indications
• Computer programs
• Plant breeds

The process of applying for IP protection is similar to what you'll see in many other countries, with the important caveat that Brazil is known for being slow to process certain types of IP protection—the current average pending time for patent applications is currently over seven years from the date of filing.

Brazil is a member of the Patent Cooperation Treaty (PCT), so foreign applications can file IP protection applications from outside Brazil and are given priority processing when doing so. Priority is also given to foreign applicants who hold IP protection in other countries, per the Paris Convention. Brazil also belongs to the Madrid Agreement Concerning the International Registration of Marks 1989 (Madrid Protocol), making it possible to file IP protection applications before the World Intellectual Property Organization (WIPO) and designate Brazil.

Note that foreign applicants applying for IP rights in Brazil must be represented by a Brazilian patent attorney.

IP in Brazil is registered in different places, depending on the type of IP:

• The Brazilian Patent and Trademark Office (BPTO) and the National Institute of Industrial Property (INPI) are responsible for patents, trademarks, geographical indications, and industrial designs.
• As in many other countries, the copyright for artistic works, computer programs, and compilation works is automatic, with no formal registration required. However, copyright protection can be registered—and the main authority for doing so is the Copyright Office of the National Library. Brazilian Copyright Law also allows for registering copyrights through the School of Fine Arts and the School of Music at the Federal University of Rio de Janeiro.

And intellectual property needs to meet legal criteria to be eligible for protection, which varies depending on what type of IP it is. Inventions, for example, need to meet the requirements of novelty, an inventive step or functional improvement, and industrial application to be eligible for patent protection.

3. NDAs are enforceable in Brazil

In Brazil, NDAs are common and generally considered enforceable as long as they meet a few requirements:

• They must comply with Brazilian contract law.
• When breached, the aggrieved party must be able to prove damages.

NDAs are commonly used by employers in Brazil to protect their IP and other confidential company information when onboarding new employees or contractors . But an NDA isn't necessarily enough to ensure your company's IP is protected while you do business in Brazil—more on that below.

4. But NDAs aren’t enough to govern your ongoing relationships with employees and contractors

Having a new employee or contractor sign an NDA can protect your company's existing IP. But because confidential information needs to be defined within the contract , an NDA doesn't cover future IP, including in a case where the employee or contractor will be helping to create or develop it.

In Brazil, several intellectual property laws exist to help define who owns what when an employee or contractor creates new IP. But the best way to ensure your company retains ownership of confidential information created by employees and contractors is through assignment agreements, which assign ownership of the IP to the company, rather than the employee or contractor.

Worker classification could cost you more than just a fine

5. Assignment agreements are enforceable, with some caveats

Assignment agreements are generally considered enforceable in Brazil, but they must meet certain requirements depending on the type of IP being assigned.

Patents and utility models

Rights to patents and utility models can be assigned in whole or in part.

The assignment must be:

• Signed by both parties
• Notarized and legalized by an apostille
• Recorded with the BPTO

Both trademark applications and trademark registrations can be assigned, but only in whole (not in part). The assignment needs to include all trademark rights (or applications) in the assignor's name for similar products or services, or the assignment may be denied.

Copyrighted works can be assigned in whole or in part to a third party, but moral rights cannot be assigned or waived (meaning the original author of the work retains the right to be credited for the work and to maintain its integrity over time).

Copyright assignments must be:

• If the copyright is registered, the assignment should also be recorded with the registering body

Industrial design

According to Brazil's Industrial Property Law, industrial design rights can be assigned in part or  in whole.

Assignments must be:

6. The inventor or author of IP created in Brazil is generally assumed to be its owner unless certain conditions are met

Without an assignment agreement, the creator of a piece of IP is assumed to be its owner, except in limited circumstances under Brazil's Industrial Property Law:

• If the inventor was working under an employment agreement to perform research or inventing activities
• If the inventor was hired specifically to create new IP

Under these conditions, the IP would be owned by the inventor's employer. However, this would not apply to anything the inventor developed outside the scope of their employment without using resources, means, data, materials, installations, or equipment belonging to the employer.

In Brazil, it's also possible for employers and employees or contractors to share joint ownership of IP. This can occur if the inventor creates the IP outside the scope of their employment, but uses resources or materials provided by their employer, for example.

In other words, IP assignment is complex in Brazil. The safest way for companies to protect their own IP is to register it with the correct governing bodies and execute assignment agreements for any IP created by their employees or contractors.

Our team of experts can help you navigate the complexity of Brazilian IP law

7. You're responsible for enforcing your own IP in Brazil

While the Department of Federal Revenue of Brazil (Secretaria da Receita Federal do Brasil) does some IP enforcement by stopping counterfeit goods from entering the country, the majority of the onus for protecting IP falls on rights holders.

Typically, IP disputes go before Brazil's state courts, though they can be heard by federal courts if the alleged infringer is a federal entity. Courts can impose a variety of penalties for unauthorized IP use, including monetary damages, imprisonment, fines, temporary or permanent injunctions, and search and seizure orders.

Rights holders can also choose to pursue dispute resolution outside of the courts, such as arbitration or mediation. These can be faster and less costly ways to deal with IP disputes.

Frequently asked questions about IP law in Brazil

Who owns ip in brazil: employee or employer.

The bottom line: in most cases, an employee or contractor owns their own IP unless they were hired specifically to create it or they have a contractual duty to assign IP rights to their employer. As a global business, the onus is on you to ensure you have the right legal agreements in place to cover ownership of IP created by your company, its employees, and its independent contractors.

What is a PIIA agreement?

If you're familiar with IP ownership rights (particularly in the US or Canada), you may have heard of a Proprietary Information and Inventions Assignment Agreement (PIIA), a legal contract between an employee or contractor to establish the ownership and protection of intellectual property created by the employee or contractor during their employment or work arrangement with the company.

PIIA isn't a common term in Brazil, where these types of contracts are known informally as assignment agreements.

What is a CIIA agreement?

CIIA stands for Confidential Information and Invention Assignment. This is just another name for a Proprietary Information and Inventions Assignment (PIIA). Some other names this type of agreement may go by include:

• Employee Confidentiality and Inventions Assignment Agreement
• Proprietary Information Agreement
• Employee Intellectual Property Assignment Agreement
• Protection of Company Interests Agreement

What is an IP assignment agreement?

An IP assignment agreement is a legal contract that transfers the ownership rights of a piece of intellectual property from one party to another. Assignment agreements are common in employment or work relationships in Brazil, when employers want to own the intellectual property rights—patents, copyrights, trademarks, industrial designs, etc.—for IP created by their employees or contractors.

Are assignment agreements and NDAs the same thing?

No. NDAs apply to IP and protected assets that already exist at the time the contract is signed.

Assignment agreements are used to reassign ownership of IP to someone new and are frequently used in Brazil to ensure employers own IP created by their employees and contractors during their employment or work arrangement.

Run your global workforce with Rippling

With Rippling, you can onboard employees and contractors in just 90 seconds. ​​Generate NDAs, PIIAs, offer letters, and any other documents you need, then easily send them out for e-signature.

Rippling allows you to manage HR, IT, and Finance in one unified system—and automate your global compliance work. See Rippling .

Looking to hire in Brazil?

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.

Christina is a writer, editor, and content strategist based in Chicago. Having lived and worked in Argentina, Colombia, Mexico, and Peru, she’s bringing her expertise on hiring in Latin America to Rippling.

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