What is an Intellectual Property Agreement?

An intellectual property agreement is also known as an IP agreement or an intellectual propert transfer agreement.

Intellectual property agreement is basically a contract between two or more parties for the purchase and sale of intellectual property rights.

Intellectual property agreement sets forth the responsibilities and rights or each party concerning the intellectual property that may be created during the term of collaboration.

Intellectual property means tangible and intangible assets which includes, patents, trademarks, copy rights etc.

An intellectual property agreement also talks about the rights associated with intellectual property that is created jointly by the collaborating researchers and also the intellectual property that was created individually by each.

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Types of intellectual property:

There are four different types of intellectual property for which you can have an intellectual property agreement:

1. Patents: Patents is a recognition for an invention which satisfies the criteria of global novelty, non-obviousness, and industrial application.

When patent is granted to someone, it excludes others from making, using, or selling that invention and the right solely belongs to the one who has the patent.

Patents are government provided holdings to build, sell, and use your invention.

If you are issued a patent, it is usually good for the next 14 to 20 years.

Furthermore, there are three different types of patents:

➣ Utility patent: Utility patents are granted to someone who invents or discovers any new and useful process, machine, article of manufacture etc.

➣ Design patent: Design patents are given to people who invents any new and useful design.

➣ Plant patent: Plant patents are granted to anyone who invents and discovers as well as asexually reproduces any different and new variety of plants.

2. Trademarks:

Trademark basically include any word, symbol, sign, phrase or even a combination of these things that pin down a person’s goods or services.

With the help of trademark, the customers recognize your company in the market.

Trademark is beneficial in identifying the source of your goods and services and in providing legal protection to the brand.

Trademark does not mean that you own the word or phrase, it only means that you own the rights to how the word or phrase is used regarding the goods and services.

3. Copyrights:

Copyrights help in protecting someone’s original work such as paintings, photographs, nooks, blogs, etc.

Companies can be copyright owners as the law allows them ownership through hiring an employee and the work is made by the employee.

Copyright law provides copyright owners the right to reproduce the work, display the work in public.

The copyright owned work can only be used by the person who has the copyrights of the work.

4. Trade Secrets:

Trade secret is simply something that is not known by the public generally and there are reasonable efforts made to keep it confidential and provide some sort of economic value to the holder by the information not being known by any other party.

Intellectual property agreements protect the rights and privileges of the owner of the property which can be either a company or an individual and it also allows certain guidelines to be followed by those who will gain access to this original work.

What is included in an Intellectual Property Agreement?

Before you sign an intellectual property agreement, you must be aware what should be aware about the things that are included and not included in the intellectual property agreement.

There are certain sections that are important to be included in an intellectual property agreement. These sections are:

➣ Definition of intellectual property

➣ Intellectual property assignment

➣ Future intellectual property assignment

➣ Covenants

➣ Warranties and representations

➣ Power of Attorney

➣ Assumption of Liabilities

➣ Severability

➣ Confidentiality

➣ Termination; survival of certain provisions

➣ Successors

➣ Governing law and revenue

➣ Amendment

➣ Entire agreement; Counterparts

➣ Headings

➣ Waiver

The key points to remember about an intellectual property agreement is that during the employee’s period of employment, the employee must directly disclose to the company any creative ideas, inventions, discoveries, or work related to the company’s business.

And also keep in mind that even though the employee has disclosed it to the company; the company is still the owner of the inventions, discoveries, ideas, and work product.

If a company hires a software developer to work for them, the intellectual property rights to the product that they made still belongs to the company even after the developer left the company.

There are a lot of things to consider when writing or signing an intellectual property agreement.

The employee that is signing with the employer should make sure that they are comfortable with someone else owning the rights of the work they make, and that they will not breach the contract later or take a legal action against the company for having the rights to the intellectual property that was made by them because that can lead to the company suing the employee.

Ownership is just one of the many things that should be included in the contract.

Another important thing to include in the Intellectual Property Agreement is facilitating possession of patent rights.

It is useful to include a section in the agreement that obligates the employee to sign any documents that are required for implementation of patent application and to cooperate with the company in obtaining intellectual property rights.

If this section is not included in the agreement then in the future it will be difficult to get signatures from an employee or former employee on documents that are necessary in acquiring patent rights for an invention.

However, if the company fail to address the patent rights in the intellectual property agreement, it does not necessarily means that it will prevent the business from obtaining any type of ownership in an invention but it will increase the cost drastically.

So for the sake of the company, the employer should always keep in mind about the patent rights before hiring a worker and making them sign an intellectual property agreement.

Provisions to include in an IP agreement:

There are only three provision that are included in an intellectual property agreement but each one of them should be read carefully by the parties involved before they sign the agreement.

1.Assignment Provision:

The assignment provision requires the employees to assign their work to the company and then the company has total ownership of the employee’s intellectual property.

This provision can stay limited to the invention of employee, or it can expand to include almost everything that the employee invents.

2.Disclosure Provision:

Disclosure provision asks the employee to inform the employer of the existence of intellectual property that was developed by the employee according to the assignment provision.

If the employee tends to hide any inventions that could benefit the company and do not abide by the agreement, it can lead to a breach of contract and the employer can take legal action against them.

3.Power of Attorney:

It is important to note that having an attorney or taking advice of a legal team before signing any contract is necessary.

For intellectual property agreement, the power of attorney guarantees that the employer can register and administer the ownership rights without the employee, regardless of whether the employee is willing and able to assist.

Why is Intellectual Property Agreement important?

Just like every other contract, an Intellectual Property agreement is important as well.

Having an Intellectual Property agreement provide certain exclusive rights to the investors or creators of the property so that they can reap the commercial benefits from their creative efforts and reputation.

When you are an employer looking for the best talent to create for your company or organization, there is always a risk that some employees might use their skills to compete with your company.

An employee might think that they have lots of different creative ideas and sometimes it might feel restrictive to give all to their employer, in cases like these you must have an intellectual property agreement to set up appropriate terms and conditions and all parties are on the same page.

If you do not have an IP agreement, then there might be some disagreement over the ownership of the property which can lead to one party taking legal action against the other party which can also damage the reputation of the company and the employee’s reputation as well.

In order to avoid such frustrating moments, an Intellectual Property Agreement must be signed by all the parties beforehand.

An intellectual property agreement can help in preventing disputes over ownership rights, IP agreements also save time, money, and damaged reputation.

The most important part of having an intellectual property agreement is that it ensure that the employer has the rights to own the intellectual property that will be created by the employee during the time they work for the company and even after that the rights still belong to the company.

To protect your most important assets and to inform the investors that your organization have valuable intellectual property that will be an excellent starting point of a successful business, you should have an intellectual property agreement signed by everyone involved within the company that you are forming, that includes the founders, employees, and developers alike.

How to get the most out of your IP agreement?

Having a well written intellectual property agreement is an excellent way to start your company’s inventions.

There are many things that you can include in this agreement that are related to your company’s business and also certain things that are necessary to include in every IP agreement.

Following are the three ways in which you can make the most out of your Intellectual Property Agreement:

1. Protect employee’s previous inventions

As an employer, when you finally hire a talented employee to make inventions for your company and their previous work is closely related to your organization then you must offer them protection for their previous inventions to help retain and empower your team.

The employee must list their previous work on the contract for protection and they should not hide or lie about any previous inventions they made that are related to the company’s inventions.

2. Right time to present your Intellectual Property Agreement

The pathway of recruiting employees into creative roles will determine when the employer should present the IP agreement.

If the employer hires an external candidate, then they will offer the agreement as part of the external onboarding process.

But if the employer is recruiting a worker from an unrelated department in a role that will influence the company’s intellectual property, then the employer should introduce the IP contract as part of their internal onboarding program.

3. Get the employees to return material and data

It is important to add this in the contract that the team members will return all the inventions related to the Intellectual property upon the termination of their contract with the company.

this includes any drawings, notes, designs, or any work related to the company’s intellectual property.

This process can be much easier if the employer allows employee to use business tools and programs to make their inventions so that the employer have control over the protection of work.

This can’t always happen because some roles are remote but having an agreement will still diminish the risk.

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