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Assignment of Intellectual Property

Assigning Intellectual Property

As well as being licensing, intellectual property rights (IPRs), like any other property, can be sold or given away. Disposal or assignment may be necessary because the IPRs are part of a business to be sold, or if an author, inventor etc. was commissioned to create a work or an invention. The effect of an assignment is that the original owner is excluded from using the IPRs unless the new owner gives him a licence. There are formalities for assignment of each form of IPR:

Patents or Patent Applications

An assignment must be in writing, signed by all parties to the transaction and registered at the Patent Office within six months of the assignment. Failing registration, the assignee's rights against infringers are restricted. The assignor cannot subsequently challenge the validity of the patent.

Copyright or Design Rights

An assignment must be in writing but need only be signed by the assignor. Future copyrights may also be assigned in this way. (See also Registered Designs below).

Registered Trade Marks or Service Marks

Such a mark can be assigned independently of the goods or services to which it relates. The assignment must be registered with the Trade Marks Registry. If not, the new owner is restricted in his ability to sue infringers.

Unregistered Trade Marks

An unregistered trademark can only be assigned with the business, product or service with which it is associated.

Registered Designs

The assignment must be in writing and registered with the Designs Registry. If such registration does not occur, the assignee will have difficulties in suing infringers. There are also rules which ensure that registered designs and associated design rights are kept in the same hands.

Warranties as to IPRs

As the assignor, you may well be asked by the assignee to give warranties as to your freedom to assign the rights, their validity and freedom from undisclosed third party rights restricting their use.

Tax and Accounting Issues Whether an IPR is assigned or licensed may have important tax and accounting consequences. Money received in return for an IPR disposed of outright (assigned) or where money is otherwise received by way of a lump sum is more likely to be treated by the Inland Revenue as capital. Conversely payments related to levels of sales of goods or services incorporating the IPR (e.g. royalties ) are more likely to be treated as income.

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