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What are the IPR Assignment Contracts?

IPR Assignment Contracts

Intellectual Property includes Trademark, Patents, industrial designs, copyrights etc. Intellectual Property Rights are owned by the person who registers them. They have the authority to assign or transfer such IPR assignment contracts, its title or any interest to any other party.

The transferor of intellectual property rights is termed as “assignor” and the receiving party will be termed as “assignee”. Such assignment can either be of all the rights or just a part of such rights. For example, in case of copyright assignment, the assignor has the right to only assign the economic prerogatives.

Requisites of a Valid IPR Assignment

In India under Indian Contract Act, 1872 it is not clearly specified what actually legally constitutes an assignment and what does not. Like any other contract, even assignment contract must be legally enforceable under law. For that, it must satisfy the requirements of the Act.

The assignment of rights and obligations under the agreement must be out of free will and not under anyone’s undue influence. And there must be a consideration for such transfer. This consideration can either be in the form of payment of a lump sum amount or in the form of regular royalty fees.

For Copyrights

Conditions relating to assignment of Copyrights are specified in Section 18, 19 and 19A of the Copyright Act, 1957.  These provisions clearly state that any copyright can be assigned through an agreement. The only condition is that the assignment must be in writing, an oral assignment is not considered valid in the eyes of law.

For Patent

Patents are registered to gain competitive advantages by patenting the new inventions so that no one else can use it. The Patentee has a right to assign such rights either partially or completely.

One can assign the partial right to any party to prevent any third party from using or vending such patented invention. As we mentioned in reference to a patent assignment can exclusive as well as exclusive. It could be exclusive to any market, territory or product line.

For Trademark

There are very specific provisions relating to assignment of the trademark in Trademarks Act, 1999. It has been differentiated from transfer or trademark and it is stated that the assignment must be done through a written document. Any assignment of a registered trademark must be notified to the authorities. Such notification acts as an evidence in the eyes of law of trademark’s existence and assignment thereof.

Essential Elements of an Assignment Agreement

  1. Details of both the parties must be clearly stated including name, address etc.
  2. Details of the assigned rights must be clearly stated. Description of rights must be included and whether the assignment is of all the rights or is partial in nature.
  3. Duration of Assignment must be clearly stated in the agreement. The start date and period of assignment must be clearly stated.
  4. All the other important information like previous assignments, infringement rights etc. must be clearly disclosed.
  5. Confidentiality clause must form a part of the assignment agreement. It must clearly mention that the information relating to intellectual property right must not be disclosed to any third party does not form part of the agreement.
  6. The agreement must be dated and signed by both of the parties.

Stamping Requirement

Stamp Act, 1899 requires stamping of all the executed contracts. This stamp fee form part of the income of state governments. As stamp duty collection provides an added source of income they question the legal admissibility of an unstamped agreement. But in a recent verdict, the court has declared that stamping of any assignment agreement will not restrict anyone’s legal ownership of the IPR assignment contracts.

In most of the Indian states stamp duty payment is required in case an assignment agreement is executed, but in case of nonpayment, the assignment cannot be invalidated.

Also Read: All You Need to Know About Intellectual Property Rights

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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