IMPORTANCE OF ASSIGNMENT AGREEMENT
Intellectual Property (IP) rights, governed by various statutes, include trademarks, copyrights, designs, patents, and geographical indications. Assignment agreements transfer IP ownership, ensuring legal protection and clarity. Key aspects involve the scope, description, rights, consideration, warranties, confidentiality, and jurisdiction to ensure validity and protection.
INTRODUCTION
Rights of ownership and use of an invention or innovation are referred as Intellectual Property rights. These rights comprise of trademark, copyright, design, patent and geographical indication. These rights are governed through respective statutes, trademark is governed under Trademark Act, 1999 for instance. There are several agreements which can change or designate the ownership or outcome of these rights. One such right is Assignment Agreement.
An assignment agreement is an agreement through which the ownership of an intellectual right can be designated to an entity or individual. This, in turn, creates a proven record of ownership of the intellectual property to the new rights holder. It also assists in guarding the creator’s intellectual property against unlawful use, selling, copying, and all other abuses.
The agreement means that the business retains the rights to any IP developed by the employees during their working tenure with the firm. These legal relations should be adopted in relation to all the employees, not only to the ones who generate IP. This precaution makes it possible for the business to have legal proof of ownership of any future inventions which helps in simplifying the explanation of ownership in case of seeking investors or selling the business.
An assignment agreement must be valid as per the Indian Contract Act, 1908.
Assignment of Copyrights
Copyright is often referred to as the "Cinderella of Intellectual Property Law" because it was once overshadowed by Franchise Law and Patent Law but now plays a significant role in IP protection. It safeguards authors, composers, and other artists against unauthorized reproduction of their work. In India, the meaning of copyright is detailed in Section 14 of the Copyright Act, 1957.
Copyrights, being personal and movable property, can be transferred through assignment agreements. Sections 18, 19, and 19A of the Copyright Act, 1957 govern such assignments. Section 18 grants every copyright holder the right to transfer their copyright via an assignment agreement.
According to section 19[1], for an assignment of copyright it is essential to be in written form and duly signed by assigner or authorized agent. Thus oral assignments are not considered valid. The Supreme Court has held that the existing and future rights of a music composer and lyricist can be assigned, provided the assignment takes effect once the work exists and is in writing, signed by the assignor or their agent. Registration for a deed of copyright assignment is optional.
Section 19A addresses disputes over assignments, empowering the Copyright Board to intervene. However, the Board cannot revoke an assignment unless it is satisfied that the terms are harsh to the assignor and cannot do so within five years of the assignment.
The term copyright includes "moral rights," which are specific rights of the creator that are non-assignable. In India, these rights are acknowledged under Section 57 of the Copyright Act, 1957, allowing the author to claim authorship and protect their work from distortion or actions that bring disrepute, even after assignment.
The primary function of copyright law is to protect a person's work from being annexed by others. Copyright owners have several rights, including the right to transfer their IP. Assignment agreements are essential in enabling this right, ensuring that the copyright owner can manage their intellectual property as they see fit.
Assignment of Trademark:
A trademark once registered can be transferred following the provisions of Rule 68 of the Trademark Rules, 2003, on the filing of Form TM-23 or TM-24. The form that is correctly used depends whether the assignment is made unto the assignee only or unto the assignee and the proprietor. This request shall also require specific details about the applicant’s right to the trademark, as well as a certified copy to be available for examination at the Registry, once the application is made.
An unregistered trademark possesses the functionality of being transferred or conveyed along with other rights in relation to the trademark without goodwill of business that originated it under Section 39 of the Trademark Act, 1999.
1957 or under the instrument of design as provided in rule 37 of the designs act 2000. An application for registration of title shall be made within six months from the date on which the instrument of assignment was executed.
Assignment of Patents
It is statutory and the law that governs the assignment of patents is getting under the Patents Act, 1970. This Statute envisages that patents can be transferred partially or in full and included exclusively and non-exclusively. Sub-section (1) of section 68 of Patents Act, 1970 provides that an assignment of a patent and the license of the right granted shall be in writing and then registered with the Controller in order to become enforceable [M/s National Research Development Corporation Vs Ineos ABS Ltd (2012) 5 CTC (IP) 8] .
The controller shall request to endorse every document, which has legal implications on the assignment or it is evidence of the transfer of the IP or it influences the proprietorship of the IP and any interest in the aforementioned IP together with two copies of the assignment deed and other incidental documents attested to be genuine copies. The Controller may also request for such other proof of title or written consent as the case may be.
Assignment of Design
An Assignment of Design can be made also under provisions of sec 15 of the Copyright Act, 1957 or under the instrument of design as provided in rule 37 of the designs act 2000. An application for registration of title shall be made within six months from the date on which the instrument of assignment was executed.
An IP Assignment Agreement includes several key terms and clauses to ensure clarity and legal validity regarding the transfer of intellectual property (IP). The following are essential components:
- Scope and Objective of the Agreement
- Purpose: Defines the intent and objectives of the IP transfer, specifying how the assignee will utilize the IP.
- Rights: The assignor can only transfer rights explicitly outlined in the agreement.
- Description of the Intellectual Property
Title and Ownership: Clearly states the ownership and title of the IP being transferred.
Detailed Description: Provides a comprehensive description, including technical specifications or documentation.
Registration Information: Includes details of any registration with regulatory or governmental authorities.
- Assignment of Rights
Exclusive or Non-Exclusive: Specifies whether the assignment is exclusive (all rights transferred) or non-exclusive (limited rights transferred).
Territory: Defines the geographical scope of the assignment.
Duration: Indicates whether the assignment is temporary or permanent.
Outlines if the assignee can further transfer the IP to others, in cases of temporary assignment.
- Consideration
A one-time payment from the assignee to the assignor. A percentage of revenue generated from the IP, payable over a specific period. In some cases, the assignor may receive shares or ownership in the assignee’s business.
5. Warranties and Indemnities:
Ownership Warranty: The assignor warrants that he/she owns the IP and has the legal right to transfer the same to the assignee.
Infringement Warranty: The assignor makes sure that the IP does not violate on the rights of any third party in any way. .
Indemnification: The assignor also covenants to indemnify and save the assignee harmless against all claims and demands which may be made by any person arising out of the assignment or in respect of which the assignee may hereafter become liable, including any future legal costs or damages that may be recovered because of inaccuracies in the agreement.
6. Confidentiality and Non-Disclosure
Confidentiality Obligations: The parties are to maintain confidentiality of all information in relation to the assignment of IPs.
Non-Disclosure: Prescribes that neither party to a civil action shall provide disclosure of information that can be considered to be confidential, to any third party without the consent of the other party in writing.
Choice of Law: A legal system to be applied in the contract is identified which means the law of a particular country or province will be the one to be applied.
Jurisdiction: Establishes the courts or arbitration bodies that will addresses any discussions.
Conclusion
Intellectual Property (IP) rights encompass trademarks, copyrights, designs, patents, and geographical indications, all governed by specific statutes. Assignment agreements are crucial for transferring IP ownership, providing legal proof and protection against unauthorized use.
