Assignments and Licensing

A license gives permission to the licensee (property user) from the licensor (property owner) to use property. Licensees can obtain the rights to use intellectual property they would other have been excluded from using. IP owners can create a license agreement, which gives the licensee specified property rights in exchange for a fee or royalty. Licensing property does not transfer title, but does grant the licensee certain rights, usually for a fee or royalty. Licenses are very common with technology and software companies

A non-exclusive license means that the owner of the property is not exercising the right to exclude. For example, a patent owner may grant a non-exclusive license to use an invention, which is basically a promise not to sue for what would otherwise be infringement.

An exclusive-license is a more attractive proposition for a licensee, because it can grant exclusive use over a property, which effectively can prevent competition from other businesses.

Assignment means that full rights to a property are transferred, along with title. The Assignee becomes the full owner of the assigned property. If the assignment does not transfer the total interest, then it may be considered a license.

All forms of intellectual property can be licensed or assigned.

1. Patents: Inventions are originally owned by their inventors in general. Usually this means that ownership of a patent can only be obtained by assignment from the inventor. In contractual relationships, however, employees may have express or implied contractual obligations to assign their inventions to their employers. The rights to make, use, and sell an invention must all be transferred for there to be an assignment. Any of the three can be licensed by the patent owner.
2. Trademarks: Trademarks are typically owned by the first one to use the mark. To apply for federal registration, the applicant must be the owner of the mark. Trademarks can be assigned or licensed. It is important for the trademark owner to maintain quality control over the use of the mark. Misuse of the trademark could result in a loss of trademark rights. Licenses where the trademark owner fails to maintain control over the use of the mark by the licensee are called naked licenses.
3. Copyrights: The author of a copyrighted work is generally the owner of that property. Exceptions to this are works that are produced "for hire." The employer is the author of a work created by an employee within the scope of employment. The rights to reproduce the work, create derivative works, distribute the work, perform the work, and display the work are rights that can be assigned or licensed.
4. Trade Secrets: Title to proprietary information and trade secrets belongs to their creators. The exception to this is when an employee creates a trade secret for an employer. Disclosure of the trade secret can be assigned or licensed. With all transactions involving trade secrets, owners will want the other parties to sign non-disclosure agreements to protect the secret.

Call us. Howard IP Law Group, P.C. can help you license what you own, and obtain licenses for what you do not, as well as with buying/selling property. We can work through the facts and questions with you and point out pitfalls, saving you time, money and headaches. Together we can craft an approach tailored to your situation and plans.

Please note that the content of this page should only be used as a general reference, and is not a substitute for legal advice. It is recommended that you seek the assistance of legal counsel.