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May 24, 2024 by Claire Darby

UNDERSTANDING INTELLECTUAL PROPERTY ASSIGNMENT IN AUSTRALIA

In the dynamic landscape of business and creativity, intellectual property ( IP ) stands as a critical asset for individuals and organisations alike. In Australia, the assignment of intellectual property rights is a significant legal process that allows the transfer of these rights from one party to another.

LEGAL FRAMEWORK

• The Patents Act 1990 (Cth) governs the protection of inventions.
• The Trade Marks Act 1995 (Cth) covers the protection of brand names, logos, and other identifiers.
• The Copyright Act 1968 (Cth) deals with the protection of literary, artistic, musical, and dramatic works.
• The Designs Act 2003 (Cth) protects the visual design of objects.
• The Fair Work Act 2009 (Cth) is an employment law that ensures that IP clauses comply with general employment standards and contractual fairness.

These statutes provide the foundation for the assignment of IP rights, ensuring that the transfer process is legally recognised and enforceable.

TYPES OF IP ASSIGNMENT

Patent, trade mark, design and copyright.

Assignment of patents involves the transfer of rights to an invention. The assignment must be in writing and signed by both parties. It is essential to record the assignment with IP Australia to maintain legal enforceability.

Similarly, transferring a trade mark (involves assigning the rights to use the brand name or logo) and the assignment of a design must be documented in writing, and the new owner should register the assignment with IP Australia.

Assignment of copyright can be more complex due to the variety of works covered. The assignment of copyright must also be in writing, specifying the work and the rights being transferred. As there is no formal requirement to register the assignment with a governmental body, it is advisable to keep detailed records.

IP ASSIGNMENT TO EMPLOYERS

From employees.

Trade secrets that protect confidential business information can be protected via employment agreements and/or confidentiality agreements.

Employment agreements should explicitly state that any IP created by the employee (for example, copyright-protected writings or inventions) in the course of their employment (work-related IP) belongs to the employer. Moreover, clearly outlining the scope of employment to include all potential IP-generating activities helps avoid disputes over what is considered within the realm of employment duties.

Employers should develop a comprehensive IP policy with detailed processes for disclosure, protection, and assignment of IP that all employees are required to acknowledge and understand.

In Australia, moral rights (rights to attribution and integrity) are personal rights held by creators. Employees can agree to waive these rights in favour of the employer in writing.

FROM CONTRACTORS

Contractor agreements (including any other similar agreements such as service agreements or collaboration agreements) are to explicitly ensure that clear terms assign all IP created during the engagement (such as designs, software codes or R&D) to the employer and should cover both the existing IP used in the creation of new work and any new IP developed. It should also unambiguously outline how any pre-existing IP the contractor brings into the project will be treated (usually through licensing).

Include warranty clauses that the contractor has the right to assign the IP and indemnity clauses protecting the employer against any claims of IP infringement. Before entering contractor agreements, employers must conduct thorough due diligence to ensure that contractors do not have pre-existing obligations that conflict with the assignment of IP.

Moreover, contractor agreements should include clauses that require contractors to provide necessary assistance in perfecting the employer’s rights to the IP, such as signing additional documents or providing necessary information post-contract.

ESSENTIAL CONSIDERATIONS

A written agreement is paramount in any IP assignment, which, if executed, will irrevocably and permanently transfer the ownership of the IP rights. Both parties should conduct thorough due diligence before finalising the assignment. This involves verifying the validity and scope of the IP rights, ensuring that there are no existing encumbrances or disputes, and confirming that the assignor has the authority to transfer the rights.

For patents, trade marks, and designs, registering the assignment with IP Australia is crucial. This step not only formalises the transfer but also provides public notice of the change in ownership, which can be vital in protecting the new owner’s rights against potential infringement.

IP assignments can have significant tax implications. Both parties should seek tax expert advice to understand the potential tax liabilities and benefits, including any applicable stamp duties or capital gains taxes. For example, the transfer of goodwill (business asset), namely, dutiable property is a dutiable transaction under the Duties Act 2009 (NSW).

RETAIN IP LAWYER

Seek advice from legal professionals specialising in IP law to draft and review assignment deeds, employment agreements, contractor agreements, policies, and other legal documents, including confidentiality agreements. This helps ensure a clear, legally binding record of the assignment and duty of confidentiality, as well as compliance with current laws and best practices.

Please contact The IP House Lawyers, which has assisted and advised clients in their trade mark assignments for over 20 years.

For any further information or queries on the above content, please contact us.

Jean Kallmyr | Lawyer, The IP House Lawyers | t: 0435 799 831 | e: [email protected]

Key Contact

Claire Darby | Managing Director/Lawyer, The IP House Lawyers | t: 0412 998 951 | e: [email protected]

The information and contents of this publication do not constitute any legal or financial advice. This publication is intended only for reference purposes for The IP House Lawyers’ clients and prospective clients.

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• About the Framework
• Before you start
• Framework Advisory Committee
• Step 1: Define your project
• Step 2: Choose an agreement
• Step 3: Choose an agreement type (for Research and Licence Agreements only)
• Step 4: Agreement Templates and Guidance Materials
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4.5 - Selling IP

Intellectual Property (IP) is an asset that can be bought and sold. An IP assignment is a written agreement to legally transfer ownership of IP from one party (the Assignor) to another party (the Assignee).

For most forms of IP rights (IPR), particularly registered IPR like patents, a written assignment is required by law and this will need to be recorded with the respective patent or trade mark offices in each country.

On this page:

Unlike in a licence where the IP remains owned by the party who is licensing the IPR to the other party, under an assignment the new owner has full control over the IP and the previous owner will give up its control.

An Assignment Agreement generally does not include the grant back of any licence rights that would allow the Assignor to continue to use the IPR and the Assignor will have no rights to use and benefit from the IP, even if the new owner does not use or commercialise the IPR. As such, IP owners should think very carefully about whether to assign their IP if this is being used as the route to commercialisation. A licence may be more appropriate than an assignment (please refer to the Licensing IP guide ).

Where an assignment is appropriate, the Assignor should consider the need for a separate licence agreement to grant back certain rights to use the IPR (for example for academic research and educational purposes).

When to assign IP?

The assignment of IP can take place in two sets of circumstances:

• from researchers working on a particular project to the university
• from the university back to the inventor(s) when the university has decided not to pursue exploitation and the inventor(s) wish to do this in their personal capacity. This will be dependent on the university’s IP policy
• Assignment to a spin-out company being formed by the university where it is agreed that the company should own (rather than license) the IP
• Sale of IP to a commercial partner where this is the best route to market (i.e., a licence is not appropriate or possible)

In the majority of circumstances, a university would expect to licence IP rights to a commercial partner and not to sell the IP.

Key Considerations

The following table is provided as a guide to help the parties appreciate the key considerations that each party will have when negotiating an assignment agreement. This assumes that the Assignor is a university, and the Assignee is an industry partner. In the template provided under the Framework, either the university or the industry partner can be the Assignor.

Discussing and understanding each party’s needs and concerns up front will help you reach an agreement more quickly and will help you apply the template to reach a fair agreement.

For organisations, particularly SMEs, that do not have any experience of buying or selling IP, this table will help you understand what the key provisions of an assignment agreement are and what you need to think about before you start discussions with the other party.

Further information on how to complete the template is provided with the guide and template agreement. Additional plain English guidance on the meaning of key clauses is provided in a separate annotated version of the template.

• Assignment Agreement template and accompanying plain English guide

This table sets out the key points each party needs to consider when buying or selling IP. Understanding your own key considerations, as well as those of the other party, will help you to negotiate a fair and reasonable agreement that works for both parties. Further guidance on how each of these points is approached in the assignment template is given with the respective template.