IP Assignment Agreement: How to Transfer Intellectual Property Rights

IP Assignment vs IP License

Types of IP That Can Be Assigned

• Copyright: Software code, content, designs, music, films. Governed by the Copyright Act 1957. Assignment must be in writing (Section 18).
• Trademarks: Brand names, logos, trade dress. Governed by the Trade Marks Act 1999. Can be assigned with or without goodwill.
• Patents: Inventions and processes. Governed by the Patents Act 1970. Assignment must be in writing and registered with the Patent Office.
• Designs: Product designs. Governed by the Designs Act 2000.
• Trade Secrets: No registration system. Protected through NDAs and contractual obligations.

Employee IP: Who Owns What?

Under the Copyright Act 1957 (Section 17):

• ✅ Work done during employment in the course of employment → employer owns the copyright by default
• ✅ Work done by freelancers/contractors → the creator owns the copyright unless assigned in writing
• ⚠️ "Course of employment" is narrow: Personal projects, side work, and work outside job scope may belong to the employee

Critical for startups: If your co-founder built the product before incorporation, the co-founder owns the IP, not the company. You need a written IP assignment to transfer it to the company.

7 Essential Clauses in an IP Assignment Agreement

1. Description of IP: Precisely describe what IP is being assigned, code repositories, design files, patents, trademarks, trade secrets. Be exhaustive.
2. Scope of Assignment: All rights, title, and interest. Worldwide. Perpetual. In all media and formats, now known or later developed.
3. Consideration: What the assignor receives in return. Can be monetary or equity. Must be explicitly stated for enforceability.
4. Warranties: Assignor warrants they own the IP, it doesn't infringe third-party rights, and no prior assignments or licenses exist.
5. Moral Rights Waiver: Under Indian copyright law, moral rights (Section 57) cannot be fully waived but can be addressed by agreeing not to assert them.
6. Future IP: Cover work in progress, future improvements, and derivative works. "All IP created in relation to [project] during and after the term."
7. Cooperation Clause: Assignor agrees to execute any further documents, provide source materials, and assist with IP registration filings.

Common IP Assignment Pitfalls

• ❌ No written agreement with freelancers: They own the copyright by default
• ❌ Pre-incorporation IP not assigned: Founders' work before company formation stays with the founder
• ❌ Using open-source without checking licenses: Some licenses (GPL) require all derivative work to be open-sourced
• ❌ Not recording the assignment: Patent assignments must be recorded with the IP office to be effective against third parties
• ❌ Vague IP description: "All intellectual property" without specifics creates enforcement problems

Key Takeaways

• ✅ Assignment = ownership transfer; License = permission to use
• ✅ Freelancer/contractor work requires a written assignment agreement
• ✅ Employee work in the course of employment belongs to the employer by default
• ✅ Pre-incorporation founder IP must be formally assigned to the company
• ✅ Patent assignments must be recorded with the IP office
• ✅ Always describe the IP being assigned in precise detail