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To License or Assign: An Intellectual Property Conundrum

February 2, 2015
By Mrigrank Mishra

Traklight_post_2015-02-02As a small business owner with intellectual property (IP), you have to leverage your assets to work for you. We have talked a number of times about the importance of protecting your IP and the necessary steps to achieve that end. The next step involves making the IP generate capital in more ways than just product sales. You may at times need to enter into an agreement with a third party with respect to that intellectual property. There are a number of different types of agreements that affect IP.


Just like tangible property, intellectual property can be conveyed, or assigned, to a new owner. If you are selling your business, you will need to convey the associated intellectual property to the new owner. Assigning IP entails transferring all rights associated with it to the assignee. You cannot then use the IP and claim creating it originally as a defense against infringement. Furthermore you cannot resell the same IP to another person if specifically mentioned in the agreement. Another scenario involving possible assignment is in the case of infringement. In many such cases, as part of a settlement, the party infringing the IP will be made to assign any rights it accrued to the rightful owner.

License Agreements

All types of IP can be assigned to others to use. With respect to patents, for instance, the inventor often never manufacturers anything. Instead, they license the patent to third parties to manufacture the product. They then collect licensing fees and, most likely, goes on to patent their next invention, repeating the process as much as possible. These agreements control how the licensor can use the IP, stipulate the fees associated with the license (if any), and assure that all use by the licensor inures to the benefit of the licensee.  (more…)