Assignment and License Agreement

Ownership is a set of exclusive rights which indicate absolute control over a certain asset. The concept of ownership is often confused with the mere right of enjoyment of the asset. This confusion persists when the right of ownership is transferred by way of an agreement, and in such instances, the primary question which arises is whether the agreement transfer all rights of ownership or just some rights such as the right to use the asset for a particular purpose.

We look at the various aspects and intricacies behind the concept of ownership rights by differentiating between the somehow abstract concepts of assignment and licensing in the field of intellectual property rights (“IPR”) to ease their understanding:

What do they mean?

An assignment agreement involves one person (usually called the "Assignor") transferring to another person (usually called the "Assignee") ownership of or control over some asset or other property or an interest in some asset or other property, such as copyrights or trademarks. 

A license agreement involves one party (the “Licensor’) contractually granting another party (the “Licensee”) the right to, for example, adapt, use, sell, manufacture, reproduce, display, and so on the licensor's protected material, such as software or an engine component.

The Similarity

The transferred rights can be subject to many limitations including the following:

• The rights can be transferred either wholly or partially.
• The transfer can be global or limited to certain territories. 
• The transfer can be subject to various durations.
• The rights can be limited to selected sectors or markets.
• The transfer can be subject to limitations relating to the scope.

The Difference

• The assignment consists of the ownership transfer of the rights, titles, and interests in and to such rights. The Assignee becomes the new owner of the trademark or the invention. It shall then assume the obligations related to the transferred property or asset, e.g., the payment of IPR offices maintenance fees or obligations toward the licensees.
• Catch: In some jurisdictions, (i) IPR shall be registered to exist, make sure they do before you acquire them (e.g., patents or industrial designs), or (ii) the assignment agreement shall be written and duly signed to be valid.

• The licensing of rights generally provides the Licensee the right to use the underlying asset or property in a certain manner as stipulated in the underlying agreement without the assumption of the obligations of the Licensor. It is like a rental or lease agreement.
• Catch: Parties often misuse the expressions “sole license” and “exclusive license”. If you grant the former, you may continue to exploit your IPR. If you grant the latter, you cannot.

Global Challenges

The structure of an assignment or a license agreement is always dependent on the local laws of the jurisdiction where the agreement is to be enforced. The following aspects are required to be kept in mind when finalizing the arrangement:

• Appropriate limitations on the assignment or the licensing arrangement should be incorporated in the agreement.
• Due care must be kept on the provisions of the laws applicable to the jurisdiction where the agreement will be enforced, and attention must be taken to ensure that the provisions of the agreement are not in violation of the said laws.
• We it comes to IPR assignments or licenses, fees such as filing, maintenance, or opposition shall definitely be part of the final agreement.