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Intellectual Property Assignment Agreements & Licenses

Intellectual property (IP) can be just as valuable as—or even more valuable than—tangible property. Many companies make money exclusively through marketing products based on intellectual property rights. That’s why it is so important to protect your intellectual property through patents, trademarks, copyrights, and other legal devices that keep your intellectual property safe.

However, once you have secured your intellectual property rights, it is sometimes more convenient or valuable to let someone else use them in exchange for a fee, which is why intellectual property agreements and intellectual property contracts exist. These documents are complex agreements that determine the manner in which third parties can use your intellectual property. Intellectual property agreements and intellectual property contracts require careful negotiation, and owners of intellectual property should conduct these negotiations with the support of an experienced intellectual property lawyer. Through Priori, you can connect with a vetted a lawyer who can help you draft and negotiate an intellectual property agreement or an intellectual property contract.

Understanding Intellectual Property Agreements & Intellectual Property Contracts

Because you have the right to confer your intellectual property rights to other parties, intellectual property agreements can take one of two basic form: assignment agreements and IP license agreements.

About Assignment Agreements

Under an intellectual property assignment agreement, you permanently transfer some or all IP rights to the assignee in exchange for a specified sum. Essentially, you sell the rights to a third party the same way that you could sell physical property for a permanent transfer. Generally, you relinquish all control, involvement, and claim on the intellectual property rights transferred.

About Intellectual Property Licensing

Under an intellectual property licensing agreement (also known as an intellectual property license or an intellectual property license agreement), you retain ownership of your patent, copyright, or trademark, but you give another party permission to use some or all of your intellectual property rights for a specific amount of time for a fee or royalty. These intellectual property contracts typically specify termination dates and procedures.

There are several types of intellectual property licenses embodied in a typical intellectual property agreement. The following three are the most common:

• Exclusive License.  You agree not to grant any other licenses of the invention and rights concerned, as well as not to use the technology yourself.
• Sole License . You agree not to grant any other licenses of the invention and rights concerned, but you can use such rights yourself.
• Non-Exclusive License . You agree to give the licensee certain rights, but you also reserve the right to grant licenses of the invention and rights concerned to third parties or to use them yourself.

You can also combine elements of these three types of intellectual property agreements, such as by giving an intellectual property license for exclusive rights in certain geographic areas. You can review a sample patent license agreement in Priori's Document and Form Learning Center . You can also learn more about software licenses here . 

Intellectual Property Assignment Agreement vs. Intellectual Property License

Which is better, an intellectual property assignment agreement or an intellectual property license? The reality is that there are pros and cons to each choice, depending on your needs and interests. Most of the time, IP holders want to maintain control of their IP, and they choose intellectual property licensing. This is advantageous because you can determine the manner in which your IP is used and change partners if a partnership isn’t advantageous. Also, intellectual property licensing allows you to produce a steady income from your IP over a particular time period and possibly confer the same rights to multiple users.

Intellectual property assignment agreements can also have its advantages, however. If you assign intellectual property to a third party, you no longer have any responsibility towards the product. That means you cannot generally be sued for problems relating to your IP and you are not responsible for any maintenance fees. Intellectual property assignment is generally more appropriate when you are selling your business or leaving a field entirely.

Priori Pricing

Depending on the complexity of your needs, the cost of drafting intellectual property licensing or intellectual property assignment agreements may vary. Priori attorneys typically create flat-rate packages ranging from $400 to $1,500 for relatively straightforward intellectual property agreements. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and receive a free price quote from one of our lawyers.

How does an exclusive license differ from an assignment?

While both exclusive intellectual property licenses and intellectual property assignment agreements give exclusive exercise of that right to another person in exchange for monetary compensation, an exclusive license is much more limited than an assignment. If you assign an IP right to another person, you permanently transfer that right and would have to repurchase it in order to use it again.

An IP license is generally subject to a certain term and possible renewal. For that reason, you generally get more money upfront with an assignment. In addition, unless otherwise stated in the contract, an exclusive license cannot generally be handed off to a third party without your permission, but if you assign that right to someone else, they can then license or sell it as they see fit.

What is an implied license?

In certain circumstances, an implied IP license arises without the existence of a formal licensing agreement if the conduct of the parties indicates that the IP right holder intended to license certain rights to the other party. Often, courts grant implied licenses in cases where one party created a copyrighted work at the request of another under a contract that did not explicitly confer the copyright to the purchaser after payment and completion of the work.

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IP Assignment and Licensing

IP rights have essentially transformed intangibles (knowledge, creativity) into valuable assets that you can put to strategic use in your business. You can do this by directly integrating the IP in the production or marketing of your products and services, thereby strengthening their competitiveness. With IP assignement and IP licensing, IP owners can also use your IP rights to create additional revenue streams by selling them out, giving others a permission to use them, and establishing joint ventures or other collaboration agreements with others who have complementary assets.

  Expert tip: Assignment, license and franchising agreements are flexible documents that can be adapted to the needs of the parties. Nevertheless, most countries establish specific requirements for these agreements, e.g. written form, registration with a national IP office or other authority, etc. For more information, consult your IP office .

IP rights assignment

You can sell your IP asset to another person or legal entity.

When all the exclusive rights to a patented invention, registered trademark, design or copyrighted work are transferred by the owner to another person or legal entity, it is said that an assignment of such rights has taken place.

Assignment is the sale of an IP asset. It means that you transfer ownership of an IP asset to another person or legal entity.

IP for Business Guides

Learn more about the commercialization of patents, trademarks, industrial designs, copyright.

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IP licensing

You can authorize someone else to use your IP, while maintaining your ownership, by granting a license in exchange for something of value, such as a monetary lump sum, recurrent payments (royalties), or a combination of these.

Licensing provides you with the valuable opportunity to expand into new markets, add revenue streams through royalties, develop partnerships etc.

If you own a patent, know-how, or other IP assets, but cannot or do not want to be involved in all the commercialization activities (e.g. technology development, manufacturing, market expansion, etc.) you can benefit from the licensing of your IP assets by relying on the capacity, know-how, and management expertise of your partner.

  Expert tip: Licensing can generally be sole, exclusive or non-exclusive, depending on whether the IP owner retains some rights, or on whether the IP rights can be licensed to one or multiple parties.

Technology licensing agreements

Trademark licensing agreements, copyright licensing agreements, franchising agreements, merchande licensing, joint venture agreements, find out more.

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Intellectual Property Assignment Agreement: A Comprehensive Guide for Your Business

LegalGPS : August 2, 2023 at 8:43 AM

Hello there, entrepreneur friend! Today let’s have that coffee chat about Intellectual Property Assignment Agreements. If you're thinking "what's that?" or "why do I need it?" then this is the perfect starting point for you. In today's competitive business world, protecting your intellectual property (IP) is more crucial than ever.

What is An Intellectual Property Assignment Agreement?

An Intellectual Property Assignment Agreement is a legal document that ensures the transfer of an inventor or creator's rights to another person or company. Essentially, it’s a legal way of saying "what’s mine is now yours". These agreements are often used in situations involving startups, company buyouts, or employees creating new works or inventions during their jobs - situations a lot of entrepreneurs find themselves in.

Let's break that down a touch more:

Defining the Purpose

The IP assignment agreement's primary purpose is to help your business prevent future disputes regarding IP ownership. When all parties are clear on who owns the intellectual property, it prevents a whole host of potential issues.

Believe me, the last thing you need or want as an entrepreneur is a legal dispute over who owns an idea, an invention, or any creative output.

And that's where this agreement steps in: it provides legal proof that the ownership has been transferred. So, if ever challenged, you can show the agreement and say "See, it’s mine!" .

Key Elements to Consider for a Properly Drafted Agreement

When it comes to IP assignment agreements, not just any generic contract will do. It's crucial to understand and include some key elements to ensure you're fully protected.

1. Clarity of Transfer

The agreement must clearly define the scope and extent of the transferred rights. To do this, use precise language that leaves no room for confusion. For example, specify whether the IP rights being transferred are exclusive or non-exclusive and if there are any limitations on how the Assignee can use or sublicense the IP. Here's a suggested format:

"The Assignor hereby assigns to the Assignee, its successors and assigns, [exclusive/non-exclusive] rights, title, and interest in and to the Intellectual Property, subject to the following limitations [if any]:"

2. Definition of Transferred Intellectual Property

This section is where you identify the specific Intellectual Property being assigned. Start by describing the IP type (e.g., copyright, patent, trademark), then provide the necessary details:

For a copyright, include the work title and a brief description.

For a patent, mention the patent number and summarize the invention.

For a trademark, provide the trademark name, registration number, and design details.

Remember, the key is to be as detailed and transparent as possible.

3. Compensation and Payment Terms

Just as with any deal, it's important to be crystal clear about the compensation for transferring IP rights. Make sure you consider the following in your agreement:

The total amount payable

The currency

The payment method (e.g., check, wire transfer)

The payment schedule (e.g., lump-sum, installments)

For example: "In consideration for the assignment of rights, the Assignee shall pay the Assignor a total sum of [Amount] in [Currency], through [Payment Method], payable as follows:"

4. Warranties and Representations

Including warranties and representations in the agreement helps provide confidence to both parties. The Assignor should explicitly declare that they:

Are the sole and true owner of the IP

Have the complete right to assign the IP to the Assignee

The IP does not infringe on any third-party rights

A sample clause might look like this:

"The Assignor warrants and represents that they are the true and lawful owner of the Intellectual Property, have full right and authority to enter into this Agreement, and that the Intellectual Property does not infringe upon any third-party rights."

5. Confidentiality Agreements

A crucial aspect of a well-drafted IP Assignment Agreement is protecting sensitive information about the business and the IP itself. Incorporate confidentiality clauses to maintain a secure environment.

Try a clause similar to this one: "The parties agree to treat all confidential information related to this Agreement as strictly confidential, and to take all necessary precautions to prevent unauthorized disclosure or use of such information."

6. Governing Law and Dispute Resolution

Last but not least, outline which jurisdiction's laws will govern the agreement. Furthermore, state how any disputes will be resolved, such as through arbitration, mediation, or litigation.

A model clause could be: "This Agreement shall be governed by the laws of the State of [State]. Any dispute arising out of or in connection with this Agreement shall be resolved by [method of dispute resolution]."

Drafting Your IP Assignment Agreement

Let's move on to the most crucial part of our discussion: Creating your Intellectual Property Assignment Agreement. This section intends to make it much clearer and more action-oriented. Your aim? To walk away with enough information to begin drafting your agreement. Let's dive in.

Step 1 - Identify the Parties Involved

Start by clearly naming the parties involved in the agreement.

Who is the 'Assignor' (the party transferring the rights)?

Who is the 'Assignee' (the individual or business entity receiving the rights)? Clearly outline their legal names and any other relevant identifying information, like addresses or official business names. It would typically look like this: "[Full Legal Name], referred to as the "Assignor," and [Full Legal Name], referred to as the "Assignee."

Step 2 - Specify the Assigned Intellectual Property

Here, you need to provide a full and exhaustive description of the intellectual property being transferred. Please don't leave room for vagueness or ambiguity - the more specific, the better. For instance, if it's a patent, include the patent number and a detailed summary of what the patent covers. If it's a copyrighted work, offer the title, the form of the work (e.g., a book, software, music), and a short description of it.

Your entry here might read: "The "Intellectual Property" includes, but is not limited to, [detailed description]."

Step 3 - Describe the Transfer of Rights

This section is all about clearly laying out what you're giving up and what you're gaining. Highlight all rights, titles, and interests being assigned from the Assignor to the Assignee. You could list them out just to ensure nothing falls between the cracks.

It’s vital to be as clear and detailed as possible here. You're specifying the extent of the rights transferred. It could be exclusive, non-exclusive, permanent, temporary, how it can be used, if it can be sold, and more.

Here's an example:

"The Assignor hereby assigns to the Assignee, its successors and assigns, all rights, title, and interest in and to the Intellectual Property, including, without limitation, the right to sue and recover for past, present, and future violations."

Step 4 - Detail Compensation and Payment Terms

Now, let's talk about money. In this step, you need to fully detail the financial exchanges. Include the amount of payment, payment format, and schedule (upfront, lump sum, installments). It wouldn't hurt to clearly lay out what conditions, if any, would lead to a return of the compensation.

This clause might look something like:

"For the assignment of rights under this Agreement, the Assignee shall provide compensation to the Assignor in the amount of [Amount], payable [insert payment method and schedule]".

Step 5 - Include Confidentiality Clauses

Especially with IP, you'll want to build in some safety nets. You can include a confidentiality clause that prevents the involved parties from disclosing sensitive information about the IP.

A basic confidentiality clause may read: "The Assignor agrees to keep confidential all non-public information that the Assignee designates as being confidential, not to disclose it to any other people, and not to use it for any purpose other than the discharge of the Assignor's obligations under this Agreement."

Step 6 - Determine Governing Law and Dispute Resolution Process

Finally, specify which state or country's laws will govern the agreement. This is crucial in the case of any future legal disputes. Additionally, include how disputes over the agreement will be resolved - arbitration, mediation, litigation, etc.

Here is an example:

"This Agreement will be governed by and construed in accordance with the laws of the State of [State]. Any disputes under this Agreement shall be resolved by [method of dispute resolution]."

Tips for Avoiding Common Mistakes and Pitfalls

You're now equipped with all you need to draft an agreement. But before you get started, here are some quick tips to avoid any missteps:

Ensure the agreement is detailed and described correctly

Work with a knowledgeable attorney

Review the final agreement carefully before signing

With these, you're set to protect your business's most valuable assets!

In today's competitive business environment, it's imperative to protect your inventions, your creations - your Intellectual Property. If you're still unsure where to start, check out our professional template for Intellectual Property Assignments!

With an Intellectual Property Assignment Agreement in hand, you're ensuring that ownership of these is well established to prevent future disputes. So here's to smoother operations and peace of mind!

Always remember, we're in this together - as you navigate the business world, consider us your legal co-pilot, happy to guide you on your journey.

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Intellectual Property Assignment Agreement

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another.

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another. The agreement may also be referred to as an intellectual property transfer agreement, an IP assignment agreement or an IP transfer agreement.

When should you use an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement should be used whenever transferring the rights in intellectual property ( IP ). There are a number of situations where you may need to do this. The most common for SMEs is where an individual has done work for a company as a consultant without using a consultancy agreement with the result that the consultant and not the company, owns the IP in the work. It is also necessary to transfer IP where founders create IP before incorporating or being employed by a company and, as a result, title to the IP vests in the founder.  

Why is an Intellectual Property Assignment Agreement important and why should you use it?

Investors in early stage companies will often require the company and key employees to give warranties confirming that the company owns all material IP used by the company. Any IP not owned by the company will need to be transferred to the company before the investment is completed. Failing to transfer the IP can materially impact the valuation of the company or, in extreme cases, lead investors to pull out of the transaction.

It is necessary to use a written agreement for an assignment of certain types of IP (such as copyright) to be effective. Further, it is important to ensure that the agreement is an enforceable contract. For the contract to be enforceable there must be some form of consideration paid in exchange for the IP. The amount of consideration payable will depend on the situation in which the IP is being transferred. If a consultant or founder is transferring IP that should have been owned by the company, the consideration should be a nominal amount, e.g. £1, which is deemed to have been received by the assignor (note that some form of consideration is required for the agreement to be an enforceable contract). The IP can, however, be transferred for valuable consideration or as part of an asset sale.

An IP assignment will also include warranties to confirm that the assignor is the owner of the intellectual property being transferred and that the assignor has the right to transfer the intellectual property. Transferring intellectual property without these assurances means that your company will have limited or no recourse should it transpire that the assignor did not own or have the right to transfer the intellectual property.

What are the common pitfalls of an Intellectual Property Assignment Agreement?

Where possible, it is important to clearly describe the IP being transferred. IP by its nature is not physical so failing to accurately describe the IP can result in disputes about what has been transferred. 

Further, there are several different types of IP (copyright, patents, trade marks and designs). Certain IP rights can also be registered. Depending on what is being transferred it may be necessary to take additional steps to perfect the transfer (for example notifying the appropriate register of the transfer). The agreement should include a requirement that the assignor takes the necessary steps to perfect the transfer and specify which party is required to pay any associated costs (such as registration fees).

In addition where copyright is being transferred, the assignor should also ensure that the assignor waives their moral rights (such as the right to attribution) in respect of the copyrighted work.

Disclaimer: Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

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What are IP Assignment Agreements?

For the high-growth startups we represent (and into which our venture capital clients invest), intellectual property (IP) is typically the core asset driving the company’s value. Ensuring that the company’s IP is properly owned and protected can therefore be the difference between success and failure. It is somewhat surprising then, how often founders fail to ensure that their companies do, in fact, own this critical property. Founders who eschew legal representation in favor of low-cost, automated options tend to fall into this trap most often. Most automated or semi-automated providers of startup legal documentation fail to provide even a basic IP assignment and confidentiality agreement—an essential document that all company personnel (founders included) must sign to ensure that IP is both validly assigned to the Company and protected from disclosure. When used with employees and consultants, IP assignment and confidentiality clauses are typically bundled into a single contract, often called a “Proprietary Information and Inventions Assignment Agreement” or a “Confidential Information and Inventions Assignment Agreement” (though there are many names that can be used here).

What are IP assignment agreements?

IP assignment agreements are contracts between a business and its personnel that transfer ownership of IP created by the personnel during their employment or engagement with the business. IP can include patents, trademarks, copyrights, and trade secrets. The agreement ensures that the business retains ownership of any IP created by the personnel, even after they leave the business. Even if your personnel are not involved in creating IP, it’s advisable to have these agreements in place—you never know where the next great idea might come from, and in any case, it’s easier to get this agreement signed than it is to explain to an investor or acquirer why you didn’t. Without an IP assignment agreement, personnel may be able to claim personal ownership of the IP they created, which can be deadly to a business that relies on IP for its value. If you are missing these agreements, investors and acquirers will notice and it can cause your financing or acquisition to fall through, particularly if the personnel who failed to sign have left or are otherwise unwilling to sign.

What are confidentiality agreements?

Confidentiality agreements, also known as non-disclosure agreements (NDAs), are contracts between a business and its personnel that prevent the personnel from disclosing confidential information about the business. Confidential information can include trade secrets, customer information, financial information, and any other information that is not publicly available. Most founders innately understand the importance of maintaining confidentiality, so rarely fail to have an NDA in place with individuals to whom they provide sensitive information. It should be noted, though, that having confidentiality agreements with your employees and consultants has become particularly important in recent years, as states and the federal government have sought to restrict the use of noncompetition agreements. Having a strong confidentiality agreement can be the key to ensuring that your ex-employees don’t take valuable information to your competitors.

While confidentiality obligations are self-explanatory and a “must-have”, you must also remember that an NDA does not necessarily include an IP assignment agreement. NDAs, particularly those provided by automated/semi-automated document providers, are often designed for use solely during preliminary conversations with potential commercial or collaboration partners. In that context, NDAs do not (and likely should not) have any clauses providing for the transfer of IP ownership. It is therefore critical that you do not simply ask your employees and contractors to sign a “standard” NDA—yes, that agreement will likely prevent those folks from sharing your sensitive information, but if you’re paying them to create IP for you, you’ll also want language that ensures that your company actually owns the work product they create.

Please remember, have your personnel (employees, contractors and even advisers) sign an IP assignment and confidentiality agreement, ideally on the day that individual first starts working for you. File that agreement away somewhere safe (ideally with your lawyer). These agreements ensure that the business retains ownership of its IP and that confidential information is kept secret. If you need help drafting IP assignment and confidentiality agreements, consult with a qualified attorney with experience in representing high-growth startups (believe it or not, there’s “magic language” needed to ensure these agreements work properly, and even a Supreme Court case about it).

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Contracts and IP ownership

For most companies — especially small businesses, startups, and partnerships — intellectual property (IP) is either the crown jewel of the business or a key asset. For in-house counsel, this means that extra care is needed when preparing any contract that touches on IP ownership. While it seems scary, the basic concepts of IP ownership are relatively straightforward and there is much in-house counsel can do without always resorting to the use of outside counsel — if that’s even an option.

There are, however, certainly times when experienced IP counsel is helpful and necessary. With Practical Law, however, you can learn the basics of IP and IP ownership and have access to a huge library of contract templates, clauses, checklists, practice notes, drafting notes, and toolkits. And, all for far less than the cost of outsourcing all of your intellectual property contracts issues to outside counsel.

What is intellectual property and IP ownership?

There are four types of IP that in-house counsel are concerned about when drafting or reviewing agreements:

• Trade secrets

When preparing or reviewing a contract involving IP ownership, the parties are generally trying to set out the key issues — namely, “who owns what” (ownership) and “how can the IP be used” (license). More about these concepts is laid out below, but without a contract in place stating otherwise, here are the general rules for IP ownership.

Copyrights, or original works of art, are owned by the author who created the work; if multiple authors are involved, they are joint owners with an indivisible interest in the work. Patents — also known as inventions — are owned by the inventor. Trademarks are the marks used in commerce and are owned by the person or business using them to identify their goods or services. Trade secrets, also known as confidential information, are owned by the creator — mostly businesses through their employees. With trade secrets, care must be taken to keep them confidential or they lose their status as trade secrets.

IP contracts establish ownership

Of course, it’s pretty rare that a lawyer will rely on things just working themselves out based on the common law. Instead  and rightfully so, they want to lay out IP ownership in a written agreement that spells out the rights and obligations of each party. This is where the hundreds of IP contract templates in Practical Law can really cut your time, effort, and cost way down. To start, you need to get familiar with the three types of intellectual property agreements: the creation of IP, the licensing of IP, and the purchase/assignment of IP.

How to create intellectual property

You can create intellectual property in a number of ways. For the purposes of most businesses, IP is created by its employees or by third parties, such as contractors hired to create IP based on specifications and direction provided by the business. While businesses own IP created by their employees — if it is part of their job to create such IP — it is not wise to leave ownership to chance.

The typical solution is an invention assignment agreement signed by the employee when they first join the company. Such an agreement covers a range of IP ownership issues, from confidentiality of company trade secrets to the assignment of any intellectual property created on the job or using company resources to the company. These agreements also require employees to disclose any inventions they claim to have invented prior to joining the company so there is no dispute down the road.

When it comes to contractors, their agreements usually contain a “work-for-hire” provision which states that any work product they turn out for the company under the contract belongs to the company. The only exceptions involve IP the contractor brings to the relationship. It continues to belong to the contractor but, if necessary, the contractor provides a license for the company to use that IP to make the work product function properly. These agreements also contain confidentiality and non-disclosure provisions to ensure that neither party reveals the confidential information of the other party.

See the Practical Law practice note  Intellectual Property – Employees and Independent Contractors

Lastly, companies sometimes partner and enter into a joint development agreement to create IP that neither party could easily create on their own. Each party contributes something to the development and then the ownership and use rights are spelled out in the terms of the agreement.

How to license the IP

IP ownership also comes up in the context of licensing the IP. Many companies’ entire business comprises licensing software or other IP they have developed. To do this successfully, they must enter into software/IP licensing agreements with customers. These agreements set out, among other things:

• Ownership of the IP and any modifications or derivatives
• Who may use the licensed IP, in what manner, and is there exclusivity?
• The ability to sublicense
• Where the IP may be used
• The period of time the licensee may use the IP
• Warranties about the software
• Indemnities, primarily from the licensor against IP infringement
• Obligations not to reverse engineer the software or allow unauthorized access
• Permitted uses and prohibited uses of the IP
• How the agreement ends and what happens to the licensee’s ability to use the IP after termination

While software agreements are the obvious IP licensing contracts, intellectual property licensing arises in franchise agreements; entertainment such as movies, music, and art; NFT; and many other contexts. That is, any type of IP is subject to a licensing agreement.

How to purchase or assign intellectual property

Lastly, IP ownership can be purchased or assigned — that is, the inventor or owner of the IP can transfer it to a new owner. Note that the assignment of IP is different than licensing IP. Under an assignment, ownership and all rights are transferred. With a license , there is no transfer of ownership and only limited rights to use the IP are given.

Some common situations involving buying IP include mergers and acquisitions of the company that owns the IP or just a straightforward purchase of the IP asset alone. For example, owners can sell copyrights and trademarks, including web addresses — many so-called patent trolls buy patents out of the bankruptcy estate of a failed business. Here are three things to keep in mind when buying IP:

•   Define the IP properly. What, exactly, are you buying or selling? Words will matter here.
• Representations and warranties. Drafting properly is important, especially representations around ownership of the IP being sold, warranties around non-infringement, and an indemnity if something goes wrong.
• Residual use. Does the seller have any rights to continue to use the IP? If so, what is the scope? What is the price?

Assignment of IP typically takes place when a party is contributing their IP to a joint venture or partnership , or when the founder of a technology business transfers their invention to the new business, which is generally a requirement to attract new investors. Intellectual property may be transferred to satisfy debts or a judgment, or when a subsidiary or division is “spun out” of a parent company and provided with certain IP assets to start their separate business. When assigning IP, consider these three key points in addition to those above:

• Broad assignment rights. Define what is being assigned and ensure you are getting what you think you are getting.
• Power of attorney. Generally, there will be an obligation on the part of the assignor to cooperate in taking any steps necessary to perfect the assigned rights. A power of attorney gives the assignee the ability to perfect those rights even without the assignor’s assistance.
• Dissolution . If the company folds or the joint venture fails, what happens to the IP that was contributed? You need to think this through at the beginning as it is too late to think about it when the problem hits.

Given the importance of IP to businesses — especially small business and partnerships — in-house counsel should be well versed in the contracts that govern its ownership, assignment, and licensing. It may seem daunting at first, but it is a skill you can hone relatively quickly, especially with a resource like Practical Law to back you up.

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Navigating the complex world of ip assignment: tips and best practices.

In today’s fast-paced and innovation-driven world, intellectual property (IP) has become a valuable asset for businesses of all sizes. IP provides companies with the legal protection they need to safeguard their innovations, products, and services from infringement by competitors. However, navigating the complex world of IP assignment can be challenging without proper guidance. In this blog post, we will explore what IP is, the different types of IP that exist, how to assign it properly and provide you with some tips and best practices for successful procurement of an IP Assignment Agreement. If you’re looking to protect your company’s intellectual property assets or trying to understand how best to assign them legally – keep reading!

What is IP?

Intellectual property (IP) refers to the legal rights that individuals or businesses have over creations of their mind. It includes a broad range of intangible assets , such as patents, trademarks, copyrights, trade secrets and more. These assets are critical for businesses because they provide exclusive rights to use and exploit them commercially.

One common form of IP is patents which protect inventions from being copied by competitors. Patent holders can prevent others from making or selling the protected invention without permission. Trademarks are another form of IP that helps identify a business’s products or services in commerce.

Copyrights protect original works like books, music, art forms and more; these give authors exclusive control over how their works are used by others. Trade secrets encompass confidential information about a company’s operations that provides it with an advantage over its competitors.

Intellectual property plays an essential role in today’s business world to safeguard innovations and creative ideas from being copied without authorization.

The Different Types of IP

Intellectual Property (IP) refers to creations of the mind such as inventions, literary and artistic works, designs, symbols or names used in commerce. IP law protects these creations from unauthorized use by others. There are several types of IP that exist today.

Patents are granted for new and useful inventions that have not been previously disclosed or made available to the public. They provide exclusive rights to the inventor for a limited period of time.

Copyrights protect original works of authorship including literary, musical, and dramatic works as well as software code and other creative expressions fixed in a tangible medium.

Trademarks protect words, phrases or symbols that identify goods or services provided by an individual or company while trade secrets refer to confidential business information that gives a competitive advantage over others who do not know it.

Industrial designs refer to aesthetic aspects of articles while geographical indications represent signs indicating products originate from specific geographical locations known for unique qualities .

Knowing what type(s) of IP you own can help you determine how best to assign them in agreements with third parties.

How to Assign IP

Assigning Intellectual Property (IP) can be a complex process, but following best practices can make it easier. The first step is to determine what type of IP needs to be assigned and who owns it. Once this is established, the assignor should draft an assignment agreement that clearly outlines the terms of the transfer.

The agreement should include details such as the specific rights being transferred, any limitations or exclusions on those rights, and whether compensation will be provided for the transfer. It’s important to ensure that all parties involved fully understand and agree to these terms before signing.

To finalize the assignment, both parties should sign and date the agreement in writing. Depending on the type of IP being assigned, additional steps may need to be taken such as registering with government agencies or filing documents with relevant authorities.

Navigating IP assignment requires attention to detail and adherence to legal requirements. By following best practices for drafting agreements and ensuring clear communication between all parties involved , businesses can protect their valuable intellectual property assets while facilitating smooth transfers when necessary.

Tips and Best Practices for IP Assignment

When it comes to IP assignment, there are several tips and best practices that can help you navigate the complex world of intellectual property. One of the most important things to keep in mind is to always have a clear understanding of exactly what type of IP you are dealing with. This will help ensure that you assign ownership rights properly and avoid any potential legal issues down the road.

Another key tip for successful IP assignment is to create an agreement that clearly outlines all aspects of the transfer process . This includes details such as which party will retain ownership rights, how payments will be made, and any other relevant terms or conditions.

In addition, it’s essential to conduct thorough due diligence before finalizing any IP assignment agreements. This means taking steps like reviewing existing patents and trademarks, conducting market research on similar products or services, and seeking advice from legal experts as needed.

Other best practices for successful IP assignment include keeping detailed records throughout the process , maintaining open communication with all parties involved, and ensuring that all necessary paperwork is completed accurately and promptly. By following these tips and best practices for IP assignment, you can minimize risk while maximizing your chances for success in this crucial area of business procurement .

Navigating the complex world of IP assignment can be overwhelming for businesses, but with the right knowledge and best practices in place, it doesn’t have to be. Understanding what IP is, the different types that exist and how to assign them are all crucial elements in protecting a company’s valuable assets .

When entering into an IP assignment agreement, it’s important to work with legal professionals who specialize in intellectual property law. Having clear communication between parties and outlining terms such as ownership rights and licensing agreements can help prevent disputes down the line.

By following these tips and best practices for IP assignment, companies can safeguard their intellectual property while also taking advantage of opportunities for growth through partnerships or licensing agreements . Procurement teams should prioritize understanding their company’s unique needs when it comes to protecting its IP as well as ensuring compliance with relevant laws and regulations.

Ultimately, proper management of a business’ intellectual property is essential not only for legal protection but also for maintaining competitiveness in today’s fast-paced global marketplace.

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Taking security over IP: counting the cost

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Martin Yells

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13 January 2020

Intellectual property – commercial drivers

Intellectual property (IP) rights protect a person's ideas and products of their creativity from unauthorised use by another person. IP includes registered rights such as patents and trademarks, and unregistered rights such as copyright and design rights. It has often been classified as a chose in action. However, unlike normal choses which are enforceable against a single debtor, IP consists of absolute rights which may be asserted against anyone.

Lenders wish to take security over the most valuable assets held by the borrower. Traditionally, these assets have been tangible (eg machinery or land). However, within the last few decades there has been a shift in lenders' acceptance towards using intangible assets to form the basis of security, or as part of a package. The IP portfolio of many companies, especially start-up technology companies, forms an important part of their assets.

The World Intellectual Property Office has estimated that global commerce in the IP asset class is worth US $300 billion worldwide annually, and 80% of corporate value is now represented by intangible assets. Digital service providers such as Google, marketplace operators such as Amazon and eBay, and other social networking providers hold no significant real assets, but have shown dramatic value creation over time, due to their intangible assets.

Although IP is becoming increasingly valuable, it is an intangible asset. Particular challenges are therefore presented regarding the security package. In transactions where the IP is of significant value, careful consideration is required as to what, where, when, and how security interests are to be created.

Forms of IP

Patents protect a person's inventions. They are registered rights and are governed by the Patents Act 1977 (PA 1977). In order to be patentable, inventions must:

• be new (not already publicly available)
• involve an inventive step (the invention cannot be obvious to a person skilled in the art, taking into account other inventions and products on the market)
• be capable of industrial application
• not be excluded (exclusions are listed in the PA 1977).

Patents can be used to protect either a product or a process. They provide the owner with 20 years of protection (subject to annual renewal), during which time nobody else can produce the product or make use of the process that is protected.

A patent must be registered to be valid. The inventor (or company if the invention was generated in the course of an employee's employment) will apply for the patent to be registered in their name.

Due to the registered nature of patents and the length of protection they grant the owner, patents can be highly valuable. It is therefore common to take security over them.

Trademarks are another form of registered IP right. Trademarks may be registered over logos, words, numerals, colours, letters, shapes, packaging and even sounds and smells. They are governed by the Trade Marks Act 1994 (TMA 1994).

Registration under the TMA 1994 gives the owner of the relevant trademark an indefinite monopoly on its use (subject to renewal every 10 years). However, registration of trademarks is not mandatory. Unregistered trademark rights are inextricably linked with goodwill. However, in the UK unregistered trademarks can only be enforced and protected under the common law tort of passing-off.

A downside of using trademarks as security is that their value will be utterly dependent on the borrower's business value.

Copyright and design rights

Copyright is an unregistered IP right and rests in original works (eg music, art, books, articles, computer programmes) arising on creation of the work.

Copyright gives the relevant author a monopoly on the substantial copying of that work, and can generate royalties for the owner on exploitation (eg by way of licence).

Design rights protect the appearance of a product, and can include the 3D shape as well as the 2D surface decoration. They can be registered or unregistered. The latter in the UK is a species of copyright.

Exploitation of IP

To increase the value of IP and generate revenue, the owner of IP has various options. It can:

• License the IP: this gives the licensee the right to use the owner's IP. Licences can be exclusive or non-exclusive; perpetual or limited; for a one-off fee rather than a royalty stream.
• Sell/assign the IP: this will transfer the ownership of the IP to the buyer, usually for a fee
• Use the IP as security: if of sufficient value, it could be used as security for a loan.

Due diligence

At the initial stage of a transaction, the lender must satisfy itself that the borrower's IP portfolio constitutes a viable asset on which a loan can be secured. It will therefore require the borrower to produce a detailed schedule of its IP assets.

At the same time, the lender will also carry out an independent IP audit, to verify the assets owned by the borrower; and, if any, the assets licensed by the borrower. It can be a useful starting point to conduct searches of IP databases to see what rights are registered, eg the UK IPO for trademarks and design rights, Espacenet/EPO for patents, and the EUIPO register for EU registered rights (also known as OHIM).

For unregistered IP rights, such as copyright, the verification process is more difficult. The lender's best bet may be to take representations from the borrower in the loan agreement concerning its ownership of unregistered rights.

All relevant registrations will need to be checked to ensure that they are up-to-date.

A prudent lender should also determine whether there are any infringement claims or actions affecting the value of IP. Some of the most valuable forms of IP, such as patents, may be most likely to be those subject to infringement proceedings.

The lender should beware of external contractors and consultants being used by the borrower to create (eg software). Unless their work is expressly assigned to the borrower, they may be the owner of any copyright.

A lender should confirm that there are no earlier security interests registered against the assets, or any licences (particularly exclusive licences). This would significantly impact on the resale value of the IP should the lender's security need to be realised.

Lenders must also be wary of collaboration agreements (where multiple businesses work together to create new IP). There is often confusion over who owns the IP in the deliverables created by the collaboration, and who therefore has the right to grant security over it.

Considerations following due diligence

If the borrower is a licensee of various valuable IP rights, it would be prudent for the lender to consider entering into a tripartite agreement between themselves, the borrower and the licensor (owner) of the IP. This guarantees that the owner has provided express consent for the borrower to use the IP as security.

Certain valuable rights may need to be registered, and these registrations will also need to be maintained. If IP is assigned to the lender as part of the security package (see below), this may fall to the lender. If the borrower remains responsible for maintaining the relevant IP registrations, this can increase the risk to the lender, as the borrower may not renew IP and its value may reduce.

Taking security over IP: difficulties

As the value and potential of IP grows, lenders are beginning to be more confident with taking security over this asset class. However, there are many general issues and considerations which must be taken into account when determining whether a lender should seek to take security over a borrower's IP.

Firstly, the value of the IP must be ascertained to determine whether it will be a good basis for providing security. This is difficult, as IP can have a different value to different entities; a lender may not have the skills/expertise to use IP if they need to enforce it. IP specific to a particular industry may be enormously valuable to the borrower but of little value to a lender who does not trade within that industry.

We also note that a considerable gap exists between the value of IP assets examined for a collateralisation or internal evaluation and the value attached to IP assets in an actual transaction. Low creditor confidence in intellectual property as security and the lack of standards in the valuation of IP assets are two major impediments to the continued growth of IP financing.

Maintenance

Maintaining IP rights requires constant vigilance. Trademarks and patent registrations will lapse permanently if not renewed. Unregistered trademarks and copyright will become worthless if a third party successfully claims that its rights have been infringed. A failure to defend valuable IP by taking legal action against bootleggers and piracy may lead to the same outcome.

International considerations

Companies operating in a global market will often have a multi-jurisdictional IP portfolio. While security can be taken over the entirety of the portfolio by a single English law security agreement, there are a number of issues that will arise:

• Some jurisdictions do not recognise the concept of a charge. Under Norwegian law, security may only be taken over IP registered in the jurisdiction by way of a mortgage or as part of a floating charge over the borrower's assets.
• Recording the lender's security interest may not be possible in all jurisdictions, even those where the concept of a charge is recognised.
• The cost of recording security interests in a number of jurisdictions can be prohibitively expensive.
• There is no concept of 'equity' in civil law jurisdictions. In countries such as Spain, where it may not be possible to record the lender's security interest, while this will be recognised as a contractual right as between lender and borrower, enforcing the security against third parties (even those with prior knowledge of the transaction) will not be possible.

Types of Security

A mortgage is generally the preferred route, and if the IP right is unregistered, a legal mortgage is desirable. This is effected by way of an assignment by way of security. The assignment should include warranties that the borrower owns the IP, there are no claims for infringement against the borrower or prior security interests, and all renewals are up-to-date. Legal title to the IP will be transferred to the lender, while simultaneously the borrower will retain a beneficial equitable interest in the mortgaged IP (the equity of redemption).

The borrower will be entitled to the re-conveyance of the legal title upon the full discharge of its debt. At the same time, a licence will be granted back to the borrower, to allow it to use the IP. Licence-back should be an exclusive or sole licence, which is royalty-free, limited, and revocable. It should contain an obligation on the borrower not to do anything which may damage or reduce the value of goodwill in the IP. The lender should also be permitted to terminate the licence if the borrower defaults on the loan.

The benefits of taking a mortgage include:

• preserving priority for the lender
• lender protection from disposal of the IP right by the borrower
• lender ease in enforcing any default by the borrower by selling or licensing the IP without the need for borrower consent.

The disadvantages of taking a mortgage include:

• higher maintenance costs (although an agent can be appointed to manage the IP portfolio)
• the lender being required to be a named party in infringement proceedings
• the mortgage not applying to future IP; and complex documentation will be involved, which will be costly and cause the process to be longer.

As patents and trademarks are registered IP rights, and can have a high value, a mortgage should be taken over these. Equally, lenders seeking to take security over unregistered IP of commercial value (for example, copyright in the computer programmes developed by an IT company) should do so by way of a legal mortgage.

Fixed charge

General charging wording in a security document will usually be enough to cover IP where security is taken over a number of assets of the borrower, which will include the IP. The usual wording includes a charge over present and future IP rights concerning the portfolio of the borrower's IP rights.

If the borrower's IP is the main or only asset over which security is taken, any charging provisions should be revised so they are specific to the IP that security is being taken over. The same applies to the warranties and representations in the security documentation e.g. covenants requiring the borrower to maintain the IP, and a warranty that no other parties have any claims over or security interests in the IP.

If a fixed charge is being taken, the charging provisions must contain information in relation to how the lender will control the IP. If these arrangements are absent, the security will be considered to be a floating charge. The lender should consider taking an assignment of the IP, which agreement would be held in escrow by the lender, to be used if the borrower defaults and enforcement is required.

Alternatively, the lender could obtain a power of attorney from the borrower to enable it to enforce security should the need arise. By way of example in relation to software being charged, sometimes the lender and the borrower enter into an escrow arrangement whereby an escrow agent agrees to hold the software in escrow and to release it to the lender in the case of enforcement. This process can be costly and an administrative burden, since it needs to be maintained during the life of the security.

However, it can be beneficial for borrowers sensitive to disclosing their software to any third parties. Lenders will also require a copy of the software to be given to them (and further copies, each time such software is updated) along with copies of relevant user guides. This would ensure that any receiver would have a copy of the software. Whether this is appropriate would depend on how sensitive a borrower is to allowing such information to remain in the possession of the lender.

The benefits of a fixed charge include:

• no maintenance requirements for the lender as the lender does not own the IP
• priority over other lenders
• simpler and quicker to put into place
• applies to future rights
• the lender retains control of the secured IP and can sell the IP, appoint a receiver, or receive royalties.

However, one major disadvantage of taking a fixed charge over IP is that the borrower could sell the IP to an assignee without notice.

Floating charge

A floating charge will only be relevant if the IP assets of the borrower can only be identified as a group, not as an individual asset.

For example, the borrowers 'brand' could be secured by way of a floating charge. This would include unregistered trademarks, and copyright in the logo, domain name, or website. The lender will not have any maintenance requirements over the IP. However, the borrower could sell the IP without notice, and the lender will fall lower in the order of priority.

Perfection and registration of security

If a lender takes an assignment, licence or security interest in a registered IP right this will need to be registered at the appropriate registry as soon as possible after the transaction.

Security should also be registered with the Registrar of Companies. If the lender takes an assignment of a patent or trade mark as part of its security package, a lender that fails to register the assignment six months from the date of the underlying transaction would not be able to claim damages for infringements occurring whilst the assignment is unregistered. This lender will only be able to claim damages or an account of profits in respect of infringement as from the date its ownership is recorded.

Further, if not recorded in a register, relevant documents may not be useful as evidence of title in a court of law. Registration may assist in fending off a third party purchaser.

Enforcement

A lender taking security over IP must be aware of enforcement routes, should it need to enforce following a default by the borrower.

If the lender has taken a mortgage over IP it will own the IP, and will therefore be able to sell the IP, grant a licence to a third party and terminate the licence to the borrower, or exploit the IP itself.

If a fixed charge has been taken, the lender will take ownership of the IP by dating the assignment it is holding in escrow, or the lender can exercise the power of attorney it has been granted, to assign the IP. Once the IP has been assigned the lender can sell it, grant a licence over it, or exploit the IP itself.

Alternatively, the lender could appoint a receiver to take possession of the IP or sell the IP and this may be a convenient route if the security covers other assets of the business. Without an express power of sale, the lender will have to apply to court for an order of sale or the appointment of a receiver.

If a floating charge has been taken, the lender will only be able to exercise their right to appoint an administrator, who would likely sell the borrower's business and use the sale proceeds towards repayment of the debt.

IP rights are a commercially valuable asset to any business that derives goodwill from its brand or associated IP interests, and so too may it be to a lender. Because IP is intangible, it poses particular challenges for a lender wishing to take security over it. IP specific to a particular industry may be valuable to the borrower but of little value to a lender who does not trade within that industry.

Consequently, it is often of indeterminate resale value, and therefore, as discussed in this article, before taking a security interest over IP (be that by mortgage, fixed charge, or floating charge) the lender should explore how it would exploit that IP if it had to enforce its interest, and be mindful of the practical steps needed to make good that security, such as registration formalities (both at Companies House and the UK/EU Intellectual Property Office).

Nevertheless, when presented with an IP-rich borrower, taking security over IP should be a key consideration when acting for either borrower or lender.

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© Taylor Wessing

This intellectual property agreement  is between , an individual a(n) (the " Assignor ") and  , an individual a(n) (the " Assignee ").

The Assignor has full interest in the intellectual property listed in Exhibit A and described in section 1 below.

The Assignor wishes to transfer to the Assignee, and the Assignee wishes to purchase and receive from the Assignor, all of its interest in the Intellectual Property.

The parties therefore agree as follows:

1. ASSIGNMENT OF INTELLECTUAL PROPERTY.

The Assignor assigns to the Assignee, and the Assignee accepts the assignment of, all of the Assignor's interest in the following in the United States and its territories and throughout the world:

• (a) the intellectual property rights related to the intellectual property listed in Exhibit A ;
• (b) all precursors, portions, and works in progress with respect to that intellectual property and all inventions, works of authorship, mask works, technology, information, know-how, materials, and tools relating to those or to the development, support, or maintenance of those;
• (c) all copyrights, patent rights, trade dress, trade names, business names, other indicia of origin, trade secret rights, trademark rights, mask works rights, and all other intellectual property rights and all business, contract rights, and goodwill in, incorporated, or embodied in, used to develop, or related to any of those; and
• (d) the registrations and applications for registrations of the foregoing (collectively, the" Intellectual Property ").

2. PURCHASE PRICE.

The Assignee shall pay the Assignor a flat fee of $ as full payment for all rights granted under this agreement. The Assignee shall complete this payment no later than .

3. RECORDATION.  

In order to record this assignment with all relevant government agencies, within hours of the effective date of this assignment, the parties shall sign the form of intellectual property assignment agreement attached as Exhibit B . The is solely responsible for filing the assignment and paying any associated fees of the transfer.

4. NO EARLY ASSIGNMENT.

The Assignee shall not assign or otherwise encumber its interest in the Intellectual Property or any associated registrations until it has paid to the Assignor the full consideration provided for in this assignment. Any assignment or encumbrance contrary to this provision shall be void.

5. ASSIGNOR'S REPRESENTATIONS.

The Assignor hereby represents and warrants to the Assignee that it:

• (a) is the sole owner of all interest in the Intellectual Property;
• (b) has not transferred, exclusively licensed, or encumbered any Intellectual Property or agreed to do so;
• (c) is not aware of any violation, infringement, or misappropriation of any third party's rights (or any claim of those) by the Intellectual Property;
• (d) is not aware of any third-party consents, assignments, or licenses that are necessary to perform under this assignment;
• (e) was not acting within the scope of employment of any third party when conceiving, creating, or otherwise performing any activity with respect to any item of Intellectual Property.

The Assignor shall immediately notify the Assignee in writing if any facts or circumstances arise that would make any of the representations in this assignment inaccurate.

6. INDEMNIFICATION. The Assignor shall indemnify the Assignee against:

• (a) any claim by a third party that the Intellectual Property or its use, manufacture, sale, distribution, or reproduction infringes on or misappropriates any copyrights, trade secrets, patents, or other intellectual property;
• (b) any claim by a third party that this assignment conflicts with, violates, or breaches any contract, assignment, license, sublicense, security interest, encumbrance, or other obligation to which the Assignor is a party or of which it has knowledge;
• (c) any claim relating to any past, present, or future use, licensing, sublicensing, distribution, marketing, disclosure, or commercialization of any of the Intellectual Property by the Assignor; and
• (i) the Assignee promptly notifies the Assignor of that claim;
• (ii) the Assignor controls the defense and settlement of that claim;
• (iii) the Assignee fully cooperates with the Assignor in connection with its defense and settlement of that claim; and
• (iv) the Assignee stops all sales, distribution, and public use of the infringing Intellectual Property, if requested by the Assignor.
• (i) obtain the right for the Assignee to continue to use the infringing Intellectual Property;
• (ii) modify the infringing Intellectual Property to eliminate the infringement;
• (iii) provide substitute noninfringing intellectual property to the Assignee pursuant to this assignment; or
• (iv) refund to the Assignee the amount paid under this assignment for the infringing Intellectual Property.
• (c) No Other Obligations. The Assignor shall have no other obligations or liability if infringement occurs, and shall have no other obligation of indemnification or to defend relating to infringement. The Assignor shall not be liable for any costs or expenses incurred without its prior written authorization and shall have no obligation of indemnification or any liability if the infringement is based on (i) any modified form of the Intellectual Property not made by the Assignor, (ii) any finding or ruling after the effective date of this assignment, or (iii) the laws of any country other than the United States of America or its states.

7. GOVERNING LAW.

• (a) Choice of Law. The laws of the state of  govern this agreement (without giving effect to its conflicts of law principles).
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .

8. AMENDMENTS.

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

9. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. Neither party may assign any of its rights under this assignment, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. Neither party may delegate any performance under this assignment, except with the prior written consent of the other party.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.

10. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this assignment in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This assignment, agreements ancillary to this assignment, and related documents entered into in connection with this assignment are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

11. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

12. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Assignor: 
• If to the Assignee: 
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

13. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

14. ENTIRE AGREEMENT.

This assignment constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this assignment. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this assignment are expressly merged into and superseded by this assignment. The provisions of this assignment may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this assignment by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this assignment. Except as set forth expressly in this assignment, there are no conditions precedent to this assignment's effectiveness.

15. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this assignment's construction or interpretation.

16. EFFECTIVENESS.

This assignment will become effective when all parties have signed it. The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

17. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to betaken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature. 

[PAGE BREAK HERE] EXHIBIT A LIST OF INTELLECTUAL PROPERTY

[PAGE BREAK HERE] EXHIBIT B FORM OF RECORDABLE INTELLECTUAL PROPERTY ASSIGNMENT For good and valuable consideration, the receipt of which is hereby acknowledged, an individual a(n) (the " Assignor ") hereby assigns to an individual a(n) (the " Assignee ") all of the Assignor's interest in the Intellectual Property identified in Attachment A to this assignment, and the Assignee accepts this assignment.

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

ATTACHMENT A INTELLECTUAL PROPERTY

Free Intellectual Property Assignment Agreement Template

Safeguard the sale or purchase of assets with an intellectual property assignment agreement. transfer the ownership of patents, trademarks, software, and other critical assets easily..

Complete your document with ease

What's an intellectual property assignment agreement?

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IP Budgeting Challenges: Estimating and Analyzing IP Costs

Ip cost management, april 22, 2024.

Tags: IP Cost Estimator, Global IP Estimator

With rising workloads and reduced budgets, IP professionals are constantly faced with the need to re-evaluate IP spending and reprioritize budgets. According to the Thomson Reuters Legal Department Operations Index 2023, 66% of legal professionals reported flat or decreasing budgets .

Companies are increasingly operating in multiple regions of the world, leading to an increase in global IP filings. Accurate IP cost estimates are more than ever a necessity to manage a growing IP portfolio effectively within budget. However, this is easier said than done. IP budgeting is a time-consuming and complex task.

The Complexity of Budgeting in Multiple Jurisdictions

One of the most demanding aspects of IP budgeting is the need to protect your IP assets across different jurisdictions, which requires skillful navigation through a labyrinth of national and regional legislation.

Every jurisdiction has a unique set of procedures from filing through grant and maintenance. In addition, the fees and rules for different jurisdictions are constantly updated, making it difficult to rely on past data. Further complexities arise when you need to choose a specific route for your international filing strategies among various options available, such as the Patent Cooperation Treaty (PCT), Paris Convention, Unified Patent Court (UPC), and European Patent (EP) validation.

Key considerations for IP budgeting

An i ntellectual p roperty budget is like a complex jigsaw puzzle; fitting the pieces together can be a challenge even for the most experienced professionals. There are four main considerations: o fficial fees , a ttorney charges , t ranslation costs , and i n- h ouse fees . These, in turn, are spread across the different stages of the i ntellectual p roperty lifecycle: filing, examination, prosecution, grant, and annuities.  

Official Fee Variables Across Jurisdictions

The official fees for patents depend on a myriad of variables, such as the number of pages, the number of claims, and the number of priorities claimed. For biotech inventions, you also need to account for the number of pages of sequence listings. The mode of filing, such as electronic or paper filing, the type of applicant, the selected International Searching Authority, and the International Preliminary Examining Authority under the PCT also impact the official fees.

For example, the Japan Patent Office charges a basic fee of around $15.5 US dollars for rewriting data into electronic format and an additional fee of around $5 US dollars per sheet. The State Intellectual Property Office of China, the Indian Patent Office, and the European Patent Office charge fees for excess claims and excess pages (over 30 pages and 10 claims in both China and India and over 35 pages and 15 claims in Europe).

In addition, translating a patent application into languages such as Chinese, Japanese, Korean, or Russian accounts for a large portion of the total cost, approximately 65% to 80% (Data received from internal Anaqua analysis) .

Predicting IP Budgets Using Spreadsheets Makes It Difficult to Control Your Budget

With so many variables, developing IP costs from a simple spreadsheet or estimating future budgets based on past data can be inaccurate and time-consuming. As a result, IP professionals regularly see a wide variance between the budgeted spend and the actual spend.

Relying on historical data to predict future IP cost estimates may not prove accurate, since there are regular updates in IP costs and rules across geographies. New routes and regional agreements make it even tougher to quickly perform a cost-benefit analysis between different global IP filing scenarios.

To accurately estimate your IP cost forecasts, you need automated tools with up-to-date costs and rules of different jurisdictions. The tool should generate cost estimate reports quickly and in a presentable format so you can easily make strategic IP decisions.

How Anaqua’s Global IP Estimator Can Help with Cost Estimates

Anaqua’s Global IP Estimator® collects IP cost data from a worldwide network of intellectual property law firms and official offices. For over 30 years, Global IP Estimator has helped IP professionals obtain accurate, up-to-date IP filing cost estimates for their patents or trademarks.

Global IP Estimato r provides accurate and detailed cost and timeline estimates for the filing of a single IP asset. You can generate estimates for more than 150 countries by choosing your preferred filing route, such as PCT, UPC, or national application. The cost estimates provide a detailed and in-depth analysis as they are broken down by filing stage and cost category, such as official, translation, annuity, or in-house for each country.

Global IP Estimator is integrated with Anaqua’s automated IP docketing platform, PATTSY WAVE ®, so you can generate filing cost estimates directly from any patent or trademark record. Simply enter the basic details of the filing application, select the desired countries and routes, and generate detailed cost estimate reports in formats that can be easily shared with clients and decision-makers.

"If you don’t have tools like the Global IP Estimator or PATTSY WAVE for annuities, then you’re stuck with going to foreign websites and looking up the costs for every single case. This process can be time consuming and brings with it a heightened risk of inaccuracy without software like Global IP Estimator." Joshua Gibbs, National Intellectual Property Manager at DLA Piper

Simplify Your IP Budgeting Processes

Finding precision and accuracy in your IP budgeting can be a challenge for most IP teams. IP costs are constantly changing, and IP portfolio data can be spread across multiple systems or spreadsheets. When you need to be able to provide accurate IP cost estimates to finance and your business leaders, IP budgeting software can provide you with the accuracy you need to control costs and make portfolio decisions. G lobal IP E stimator simplifies the entire IP budgeting process and has helped corporations and law firms to get the planned budget within 1% of actual spend, making it the preferred solution for IP budgeting.

Interested to learn more?

Additional Reading:

• How Can IP Teams Simplify International Patent Filing?
• Achieve IP Operations Excellence and Cost Efficiency with PATTSY WAVE
• End-to-End IP Financial Management
• Five Minutes with Joshua Gibbs, DLA Piper
• Patent, Trademark, IP Portfolio Tools - Quantify IP

Sources: Thomson Reuters Legal Department Operations Index 2023 (p.4)

Further Reading

A license is a grant (assignment) to the licensee of various licensed rights.  The situation can be further obscured by the fact that one can assign the licensed rights from one entity to another.  Thus, the first recordation of a license may be recorded as a “license,” while the assignment of those same licensed rights to another entity may be recorded as an “assignment.”  The only way to really understand the situation is to review the actual documents, which are all readily available from the recordation branch of the patent office.

Note that the patent office sometimes refers to licenses as a species of assignment.  That is correct, because one is assigning license rights.

Not necessarily.  Assignments are only needed if you are contractually obligated, by employment or otherwise, to make the assignment.

An important corollary is that an inventor can merely license his patent rights to a company that is exploiting the invention, and keep title to those rights in his own name.  Investors are usually unhappy with that arrangement, but there can be significant advantages.  One major advantage is that the patent holder is a “necessary and indispensable” to any litigation over patent validity.  Any competitor trying to invalidate the patent must file the action in the district where the inventor resides.

Assignments of provisionals have substantially the same pros and cons as assigning formal utility and design applications.  See the previous FAQ.

Since there are costs attending the handling and recording of assignments, many inventors and companies prefer to hold off on assigning provisional applications until filing of the corresponding formal (utility or PCT) applications.  That is a dangerous strategy.  In the interim between filing the provisional and the formal applications, there are all sorts of unfortunate events that can make later assignments difficult or impossible, including death or disability of an inventor, reluctance of an inventor to file an assignment due to a separation from a company, or divorce.

It is not technically necessary to re-file assignments for divisional or straight continuation applications.  A properly worded prior assignment recorded against the original application is automatically effective because the assignment recorded against the parent application gives the assignee rights to the subject matter common to both applications.

In the case of a substitute or continuation-in-part application, a prior assignment of the original application is not applied to the substitute or continuation-in-part application because the assignment recorded against the original application gives the assignee rights to only the subject matter common to both applications.  Substitute or continuation-in-part applications require the recordation of a new assignment if they are to be issued to an assignee.

Absolutely.  Indeed, it is a very common occurrence that an inventor will assign his invention to a company, and then the company will re-assign the rights after the patent issues.

Assignment is technically free, but it costs about $100 ($40 in filing costs and about $60 in paralegal time) to record the assignment at the U.S. patent office.

Note that the office charges US$ 40 for each patent or patent application listed on the recorda­tion form.  Thus, if an assignment references a family of 5 patent applications, the recorda­tion fee is US$ 200.  Of course paralegal charges would also apply, and possibly attorney time.

Under U.S. law, assignments must be recorded to be effective as against third parties who do not have actual knowledge of the assignment.  The statute is similar to recording statutes used for recording real property.  Thus, although there is no requirement to record an assignment, it is foolish not to do so.

Note that absent some unusual circumstance, patent assignments do not have to be notarized for use within the United States.

Preparing assignments is usually a simple matter of filling in the blanks of a form.  Assignment forms (inventor to company and company to company) and guidelines for preparing such forms can be found in  Strategic Patenting .

Note also that it is important to clearly identify whether the document being recorded is an assignment, license, or other document.  The recording branch does not generally read the documents to verify the content.

The Patent office will proceed as if the signature had been procured from the inventor, but only after establishing that the entity pursuing the application has colorable rights, and only after establishing that the inventor cannot be reached.  Thus, the patent office will need a copy of the employee agreement, assignment, or other documentary evidence establishing those rights.

In the case of a deceased inventor, the patent office will insist upon a statement from the executor of the estate, or an heir if probate is finished.  Where the inventor refuses to sign, or cannot be found, the patent office will insist upon seeing the letters, emails and faxes sent to the inventor, and will need a declaration from the person trying to make contact.

One simply records a certificate of name change or other formal document with the USPTO, using the assignment recordation form.

In foreign countries, name changes can be a real problem, and can cost anywhere from several hundred to a thousand dollars (mostly in attorneys fees).

It depends on the wording of the assignment and the recordation laws of the foreign countries.  Most assignments transfer all rights, title, and interest to U.S. patents and applications, and to corresponding foreign patents and applications.  Even so, the assignments might not be legally effective in a given country until the assignment is recorded in that country.

Some countries insist on a specific assignment that expressly lists that country. Canada, for example, typically requires its own assignments.

Patent infringement damages accrue in some countries only from the date the assignment was actually recorded at the relevant patent office.  Thus, delay in registering can cost a patent holder dearly in reduced patent infringement damages.

The main disadvantage to recording assignments is that many countries (including most or all of Europe) consider assignment of a patent or application to be a taxable transfer, and charge VAT (Value Added Tax) on the estimated value of the application or patent.  Since the value is often low in the early days, and can rise considerably during the life of the patent, the disadvantage of recordation can be mitigated by registering early.

Assignments records at the USPTO are available for  public inspection , but only for patents and published applications.  One can search by reel/frame number, patent or publication number, and assignor or assignee name.

The underlying documents are not available for download, but can be ordered from the assignment branch.  Paper mail requests can take months, but faxed requests are usually filled within a day or two.

No.  One should never rely upon the designation of “assignee” as set forth on the face of a patent.  First, the patent office obtains the “assignment” information directly from the issue fee transmittal form, and there is no verification whatsoever that such information is, or even ever was, correct.  The entry could well have been an error on the part of an attorney, paralegal, or secretary, and the issue fee transmittal form even warns that designation of an assignee of that form does not, in and of itself, affect an assignment.  Second, the patent is never altered after it is published.  Information that was correct at one point in time may well be superseded down the road.  Third, even if the “assignee” information is correct, one cannot know from the face of the patent what rights were assigned.  It might well be that only licensed rights were assigned, or that such rights are subject to a reversion.

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IP Subnet Calculator

This calculator returns a variety of information regarding Internet Protocol version 4 (IPv4) and IPv6 subnets including possible network addresses, usable host ranges, subnet mask, and IP class, among others.

IPv4 Subnet Calculator

Ipv6 subnet calculator.

Related Bandwidth Calculator | Binary Calculator

A subnet is a division of an IP network (internet protocol suite), where an IP network is a set of communications protocols used on the Internet and other similar networks. It is commonly known as TCP/IP (Transmission Control Protocol/Internet Protocol).

The act of dividing a network into at least two separate networks is called subnetting, and routers are devices that allow traffic exchange between subnetworks, serving as a physical boundary. IPv4 is the most common network addressing architecture used, though the use of IPv6 has been growing since 2006.

An IP address is comprised of a network number (routing prefix) and a rest field (host identifier). A rest field is an identifier that is specific to a given host or network interface. A routing prefix is often expressed using Classless Inter-Domain Routing (CIDR) notation for both IPv4 and IPv6. CIDR is a method used to create unique identifiers for networks, as well as individual devices. For IPv4, networks can also be characterized using a subnet mask, which is sometimes expressed in dot-decimal notation, as shown in the "Subnet" field in the calculator. All hosts on a subnetwork have the same network prefix, unlike the host identifier, which is a unique local identification. In IPv4, these subnet masks are used to differentiate the network number and host identifier. In IPv6, the network prefix performs a similar function as the subnet mask in IPv4, with the prefix length representing the number of bits in the address.

Prior to the introduction of CIDR, IPv4 network prefixes could be directly obtained from the IP address based on the class (A, B, or C, which vary based on the range of IP addresses they include) of the address and the network mask. Since the introduction of CIDRs, however, assigning an IP address to a network interface requires both an address and its network mask.

Below is a table providing typical subnets for IPv4.

'ZDNET Recommends': What exactly does it mean?

ZDNET's recommendations are based on many hours of testing, research, and comparison shopping. We gather data from the best available sources, including vendor and retailer listings as well as other relevant and independent reviews sites. And we pore over customer reviews to find out what matters to real people who already own and use the products and services we’re assessing.

When you click through from our site to a retailer and buy a product or service, we may earn affiliate commissions. This helps support our work, but does not affect what we cover or how, and it does not affect the price you pay. Neither ZDNET nor the author are compensated for these independent reviews. Indeed, we follow strict guidelines that ensure our editorial content is never influenced by advertisers.

ZDNET's editorial team writes on behalf of you, our reader. Our goal is to deliver the most accurate information and the most knowledgeable advice possible in order to help you make smarter buying decisions on tech gear and a wide array of products and services. Our editors thoroughly review and fact-check every article to ensure that our content meets the highest standards. If we have made an error or published misleading information, we will correct or clarify the article. If you see inaccuracies in our content, please report the mistake via this form .

How to change your IP address, why you'd want to - and when you shouldn't

Security and privacy have been hot topics for a long time (and that's not going to change any time soon). One means of achieving privacy on the internet is to either change or obfuscate your IP address, so evildoers and/or third parties aren't able to track you or keep a history of your browsing traffic.

Also: This Linksys Wi-Fi 7 mesh router makes reliable wireless throughout your home so very easy

Changing your IP address might sound like a task that requires a computer science degree -- but it's not. It's easier than you think. I want to show you how you can accomplish this without a struggle.

Before we get started, some explanation is in order

Different IP addresses

One of the first things to understand is the difference between an internal and external IP address. On your home network, you have one external IP address (which is assigned to the modem/router your service provider gave you). This IP address is what you see if you open a browser and go to  What Is My IP Address . 

This address is the one seen by the outside world -- and it's one you cannot change  permanently . However, you can make it  appear  to be different from what it is. Why would you want to do that? Changing the IP address as seen by the outside world makes it harder for others to track you, especially if you change it randomly. Perhaps you need to transmit sensitive data and you want the IP address to appear as though it's in a different location  -- even a different country.

On the other hand, you have several internal IP addresses -- the addresses assigned by your router \to the various devices on your network (desktops, laptops, phones, tablets, TVs, etc.). You can change those addresses manually. If you have the skill (and the ability to access your router's configuration window), you can even change the IP address scheme from something like 192.168.1.0 to 10.0.1.0. 

Also:  This is the fastest and most expensive Wi-Fi router I've ever tested

Changing your internal IP address isn't nearly as important as how your device is seen by the outside world via your external IP address. Why would you want to change an internal IP address? In a word, convenience. Here's a personal example: I have a Samba share on my network and I want to ensure that this machine has an IP address that I can easily remember  and  an address that won't ever change.  

A caution is in order: It's not always a good idea to change these internal IP addresses. There's a little thing called an IP address conflict, which happens when more than one device on a network has the same address. When this happens, a device might have difficulty accessing the internet or it could cause slowdowns on your network.

Your internal IP addresses are assigned by your router. Unless you configure your router manually to only assign from a specific pool of addresses (say 192.168.1.1-192.168.1.50) and then only configure manual addresses from 192.168.1.51 and up, you might run into IP address conflicts. To that end, it's best to only change internal IP addresses if you know what you're doing. 

Also:  What is 5G home internet? Here's what to know before you sign up

So, read on!

Changing your internal IP address manually

Here are the steps for different operating systems.

How you do this will depend on your desktop environment, so I'll walk you through how it's done on the GNOME desktop environment (which will be similar to other desktops) :

• Open the Settings app.
• Locate Network.
• Click the gear icon associated with either Wired or Wireless.
• Select the IPv4 tab.
• Click Manual.
• Fill out the necessary information (Address, Netmask, Gateway, DNS) and click Apply.
• Open System Settings.
• Go to Wi-Fi (if connected wirelessly).
• Locate your current wireless connection and click Details.
• Click TCP/IP.
• Select Manually from the Configure IPv4 drop-down.
• Open Settings.
• Go to Network & Internet.
• Select your connection type (Ethernet or Wi-Fi).
• Click Manage and then click Edit.
• Select Manual under Edit Network IP.
• Click Save.
• Tap Network & Internet.
• Tap the gear icon associated with the wireless network you're using.
• Tap the pencil icon in the upper right corner.
• Tap Advanced options.
• Select Static from the IP Settings drop-down.
• Select Wi-Fi
• Tap the icon to the right of the wireless network you're using.
• Select Manual from the Configure IP drop-down.

Remember, changing your internal IP address does nothing to your external address.

Changing your external IP address

As I mentioned, you won't be doing this manually or permanently. What you can do, however, is use a service to masquerade your true external IP address as something else. For this, you can obfuscate your external IP address in three different ways.

Most modern VPN services not only mask your external IP address but also encrypt your traffic. This is probably the easiest method to hide your external IP address . You'll find VPN services for every platform you use (Linux, MacOS, Windows, Android, and iOS ). Popular VPNs include NordVPN , ExpressVPN , Surfshark VPN , Private Internet Access , and Proton VPN . You can read more about how these services rate (and what features they offer) here . Most VPNs do have an associated cost.

Also: The best VPN services: Expert tested

2. Tor Browser

If you don't want to have to either pay for a VPN or go through the process of installing and configuring such a service, you could always use Tor Browser. Tor Browser does everything a VPN does, only with more layers of security. The only caveat to using Tor Browser is that it only works for your web browser traffic, which means it won't obfuscate your external IP address for other network-based services.

Also: How to use Tor browser (and why you should)

3. Proxy Server

This is the most complicated process because it requires installing and configuring the service, which is often more challenging than using either a VPN or Tor Browser. On top of that, if you opt for a Proxy Server, you also have to configure any machine on your network to connect through the proxy server. I wouldn't recommend going this route as the complications it adds can be quite frustrating. 

And there you have it: The various ways you can change your internal and external IP address. Do keep in mind that when changing your internal IP address you want to make sure you're not changing it to one that is already in use (otherwise, you'll wind up with IP Address conflict errors). As for your external address, your best bet is to go with either a VPN or Tor Browser to obfuscate your external address, which not only prevents third parties from locating (and even tracking) you but also encrypts your network traffic.

The best VPNs for iPhone and iPad: Expert tested

How much you should pay for internet (and how you can lower costs), the best free vpns: expert tested.

IP Assignment Agreement Pricing

Learn about contracts, other buying and selling businesses docs pricing.

• Business Purchase Agreement
• Co-ownership Agreement
• Indemnification Agreement
• Memorandum of Understanding
• Non-Compete Agreement
• Non-Competition Agreement
• Non-Solicitation Agreement
• Purchase Agreement
• Trademark Assignment Agreement

OTHER Docs Pricing

• Accounting Services Agreement
• Addendum to Lease
• Advisory Agreement
• Affidavit of Ownership
• Affiliate Program Agreement
• Art Consignment Agreement
• Artist Management Agreement
• Author Agreement
• Bill of Sale
• Book Publishing Agreement
• Building Lease
• Business Contract
• Business Plan
• Buying Agency Agreement
• Cancellation Of Lease
• Cease and Desist Letter
• Certificate of Good Standing
• Channel Partner Agreement
• Cloud Services Agreement
• Coaching Agreement
• Commercial Lease
• Common Stock Purchase Agreement
• Confidential Settlement Agreement
• Confidentiality Agreement
• Construction Services Agreement
• Consulting Services Contract
• Content Creator Agreement
• Content License Agreement
• Contract Manufacturing Agreement
• Convertible Note
• Copyright License Agreement
• Copyright Transfer Agreement
• Custodial Agreement
• Deed of Trust
• Demand Letter
• Design-Build Contract
• Developer Agreement
• Development Services Agreement
• Earn Out Agreement
• Egg/Embryo Donation Contract
• Endorsement Agreement
• Equipment Purchase Agreement
• Event Services Agreement
• Event Space Rental Agreement
• Exclusive Agency Agreement
• Exclusive Distribution Agreement
• Fee Retainer Agreement
• Financial Affidavit
• Form 1120-S
• Franchise Agreement
• Freelance Contract
• GDPR Compliance
• General Contractor Contract
• Graphic Design Agreement
• Ground Lease
• HVAC Contract
• Healthcare Proxy
• Home Improvement Contract
• Hosted Services Agreement
• Intellectual Property License Agreement
• Intellectual Property Transfer Agreement
• International Distribution Agreement
• Invention Assignment Agreement
• Investment Advisory Contract
• Investment Contract
• Investment Management Agreement
• Joint Development Agreement
• Joint Marketing Agreement
• Joint Purchase Agreement
• Joint Venture Agreement
• LLC Subscription Agreement
• Land Lease Agreement
• Land Sales Agreement
• Land Use Restriction Agreement
• Landscaping Contract
• Lease Agreement
• Lease Modification Agreement
• Lease Purchase Agreement
• Lease Termination Letter
• Legal Services Agreement
• Licensing Agreement
• Listing Agreement
• Loan Agreement
• Marketing Agent Agreement
• Multi Member LLC Operating Agreement
• Music License Agreement
• Non-Circumvention Agreement
• Non-Disclosure Agreement
• Note Payable
• Notice to Vacate
• Offering Memorandum
• OnlyFans Management Contract
• Operating Agreement
• Options Contract
• Parking Agreement
• Partnership Agreement
• Patent Assignment Agreement
• Patent License Agreement
• Photography License Agreement
• Photography Service Agreement
• Photography Usage Rights Agreement
• Plumbing Contract
• Podcast Contract
• Power Purchase Agreement
• Power of Attorney
• Privacy Policy
• Private Placement Memorandum
• Producer Agreement
• Product Licensing Agreement
• Production Services Agreement
• Professional Services Agreement
• Promissory Note Agreement
• Property Deed
• Property Management Agreement
• Purchase Contract
• Quitclaim Deed
• Real Estate Option Agreement
• Real Estate Purchase Agreement
• Real Estate Sale Agreement
• Recruiting Services Agreement
• Release Form
• Release of Lien
• Renovation Contract
• Rental Agreement
• Rental Lease Agreement
• Repayment Agreement
• Residential Listing Agreement
• Residential Service Contract
• Retainer Agreement
• Revenue Sharing Agreement
• Roofing Contract
• Royalty Agreement
• S-Corp Formation
• Shareholder Agreement
• Single Member LLC Operating Agreement
• Social Media Marketing Agreement
• Solar Panel Lease Agreement
• Sperm Donor Contract
• Stock Purchase Agreement
• Stock Subscription Agreement
• Stock Warrant
• Storage Lease Agreement
• Subcontractor Agreement
• Sublease Agreement
• Subordination Agreement
• Subscription Agreement
• Surrogacy Contract
• Terms of Service
• Translation Services Agreement
• Vendor Agreement
• Venue Rental Agreement
• Video License Agreement
• Website Design Agreement
• Website Hosting Agreement
• Wedding Contract
• Wholesaler Agreement

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Watch CBS News

How airline "drip pricing" can disguise the true cost of flying

By Megan Cerullo

Edited By Alain Sherter

Updated on: April 24, 2024 / 2:47 PM EDT / CBS News

With many airlines now hawking "unbundled" fares, it's easy for travelers to mistake low advertised prices for cheap plane tickets . But for consumers eager to get the best deal on flights heading into the summer travel season, it pays to learn how "drip pricing" can make airfare more expensive.

Indeed, selecting the cheapest base fare is no longer the best way to get a good deal, according to travel experts. That's because airlines now routinely charge more money for "extras" such as seat assignments,  checked bags , snacks or wifi. 

"Nobody likes feeling nickel-and-dimed, like the price they saw for a flight was a bait and switch," Scott Keyes, founder and CEO of travel site Going.com, told CBS MoneyWatch.

Here's what to consider. At first glance, the initial pricing for a flight you find on an online travel site might seem temptingly low. But after factoring in the cost of selecting your seat, checking bags and other add-ons, the fare can end up being much higher — as much or more than an all-inclusive fare.

This model, commonly referred to as drip pricing, can certainly boost an airline's revenue, and proponents say it benefits consumers by allowing them to pay only for the perks they truly value. For their part, critics say it makes it harder to determine the true cost of flying and to compare prices among airlines.

Keyes traces drip pricing back to 2008, when airlines began charging passengers to check second bags. That allowed full-service carriers to offer a lower-cost, no-frills ticket in order to compete with budget carriers.

"That lower headline price brought people in — then they started adding seat-selection fees," Keyes said. "It's an innovation from the budget airlines that the entire industry has copied and that full-service airlines have adopted for themselves."

"It makes it very difficult"

For consumers, however, the problem with unbundling fares is it makes it trickier to compare what different airlines charge for tickets, experts told CBS MoneyWatch. 

"It makes it very difficult to find out what the all-in price will be," said Columbia Business School marketing professor Vicki Morwitz, who authored a  report on how consumers react to drip pricing.

Her research shows that consumers tend to book the ticket option that looks cheaper upfront, but costs more once add-ons are factored in.  "Consumers make a mistake and spend more money than they needed to spend," she explained. 

Jay Sorensen, president of IdeaWorks, a consultancy that has advised U.S. airlines, agrees that drip pricing makes comparing airline ticket prices more complicated. But he still thinks it can benefit consumers by letting them pay for the extras they want, while leaving behind those that aren't important to them. 

"The outcome is of course that it's more difficult to compare between different products and airlines," he said. "While that's true, airlines, as profit-seeking companies, are under no obligation to make it easier to compare with their competitors."

Sorensen compared the experience of booking airfare today to shopping for groceries.

"You roll in with your shopping cart, and as you walk through the aisles you toss stuff in your cart," he said. "You buy a base fare, and as you go through the booking path you add things to the cart, like a checked bag, seat assignment, or pay to book a meal or other services," he said. "That's dramatically different from the way travel was once sold in U.S."

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.

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Justice Department Backs Push to Lower Phone Costs in Prisons

By Danielle Kaye

The federal government should take more steps to rein in the cost of calls from prisons and jails by promoting competition among providers, the US Justice Department argued in a comment to the Federal Communications Commission.

The FCC is considering public input on how to implement a law enacted in 2023 meant to curb excessive fees on calls placed from correctional and detention facilities.

Incarcerated individuals and their families typically must rely on prison communications providers, since personal devices are confiscated. The DOJ’s Antitrust Division called on the FCC to further scrutinize two elements of the market: the commissions that ...

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