The IP assignment agreement, and the words that decide whether it worked

An assignment sells the right. A licence rents it.

An assignment moves ownership. Once it takes effect the assignor holds nothing except what the document reserves, and the assignee can register the right, sell it on, license it to whoever it likes, and sue infringers in its own name. A licence does none of that. Ownership stays where it was; the licensee gets permission, bounded by the grant — field, territory, term, exclusivity — and losable on breach or expiry.

The test for which one you need is not how much you paid. It is whether you need to stop the creator doing something with the work in five years — including selling it to your competitor. Most arguments that begin "but we own our logo" are about which of those two things happened. Paying the invoice, taking the source files and using the work unchallenged for six years all look like ownership from the inside, and none of them are. Nor does a work-for-hire clause: for a contractor it only bites on nine statutory categories, which exclude logos, websites, software and commissioned photographs — who owns the work has the list, and who owns your logo the design-studio version. For most commissioned output the assignment is not a backstop. It is the operative instrument. Exclusive vs non-exclusive licence covers how far the other instrument stretches.

Why "will assign" loses to "hereby assigns"

This is the most consequential piece of drafting in the document, and it is invisible to anyone reading for meaning rather than tense.

A Stanford researcher signed two agreements covering the same future inventions. Stanford's said he agreed to assign. A visiting agreement with Cetus, whose rights passed to Roche, said he would assign and did hereby assign. The Federal Circuit read the first as a promise to act later and the second as a transfer that took effect on signature and attached to the invention the moment it was conceived. Roche ended up co-owning the patents; the Supreme Court affirmed in 2011.

A decade later the same court read a University of Michigan bylaw saying patents "shall be the property of the University" the same way. In Omni MedSci v Apple, decided in August 2021, that was a statement of intended disposition and a promise of a future assignment — not a present transfer. Title had never left the inventor, so his company was free to sue Apple.

A promise to assign is still a contract, and a court can order somebody to keep it. But it fails in three practical ways, all at the wrong moment:

• It needs a second signature. If the person has resigned, been dismissed, died or simply stopped answering, that signature becomes a negotiation.
• It loses a race. Someone who later takes a present assignment from the same person can end up with title first — nothing stopped them granting it.
• Registries want an executed transfer. You cannot record a promise; a patent or trade mark office needs a document that has already moved title.

The verb decides when. The definition decides what.

A correct present-tense assignment attached to an uncontrolled definition is the most common defective clause in circulation. "All intellectual property created by the Contractor in connection with the Services" reads as reasonable and, taken literally, sweeps in the contractor's own framework, presets, internal notes, the concepts you rejected and tooling built years before they met you.

Employees have a statutory floor in some states. California Labor Code section 2870 stops an employer requiring assignment of an invention developed entirely on the employee's own time, without the employer's equipment, supplies, facilities or trade secret information, unless it relates to the employer's business or came out of work done for them — and a clause overriding that is expressly unenforceable. Several states have equivalents. Texas does not, which is why the same side project can belong to different people depending on where it was written.

Moral rights are the part nobody can sell you

Separate from copyright, authors in most of the world hold rights to be identified as the author and to object to derogatory treatment of the work. They do not travel with an assignment, because they are not property in the ordinary sense.

Consideration, deeds, and the assignment signed too late

An assignment is a contract, and in common-law systems a contract needs something given in exchange — hence the nominal sum recited alongside the real bargain. The problem is not the size of the figure but the timing. An assignment signed months after the work was delivered and paid for rests on consideration that has already passed, which is a recognised weakness. Two fixes: recite fresh consideration actually paid at the time, or, in England and Wales, execute the assignment as a deed, which needs no consideration provided the execution formalities are met.

The other timing question is the trigger. Creators want title to pass on payment in full, clients on creation. Payment in full is fairer and costs a paying client nothing — but while the final invoice is disputed, the client holds a deliverable it does not own.

The founder assignment every diligence pack asks for

The pattern is almost universal. The prototype, the domain, the name and the first version of the product all exist before the company does. The company is then incorporated and everybody proceeds as though the assets came with it. They did not: the individuals who made them own them, and incorporation changes nothing.

It surfaces at the first serious financing, when someone asks for the chain of title. The gaps are predictable:

• Pre-incorporation work created by founders personally, with no assignment into the company afterwards.
• Prior-employer exposure where a founder built the early version while employed elsewhere, on that employer's equipment or in its field.
• A departed co-founder who never signed anything and now has both a grievance and a bargaining position — or an agency whose own contractor assignments were never taken, so it could not have passed title on.

The fix at formation is one document per founder and one per contractor, signed before anyone writes anything: the IP assignment agreement with the independent contractor agreement. Where the asset moves between companies rather than from a person, a technology transfer agreement carries schedules a bare assignment does not.

Recording it: three registries, three different clocks

Signing settles ownership between the two of you. Recording settles it against everyone else, and the periods differ by right.

• Copyright, US Copyright Office. Between conflicting transfers the earlier prevails if recorded within one month of execution in the US, two months if executed abroad, or before the later one is recorded.
• Patents, USPTO. An assignment is void against a later purchaser for value without notice unless recorded within three months of its date, or before that purchase.
• Trade marks, USPTO. The mark must be assigned with the goodwill of the business it symbolises, and an intent-to-use application generally cannot be assigned until use has been filed. So a brand name cannot be sold as a bare asset detached from the business behind it.

Paid in full, and they still own it

The failure mode is always the same shape, and never dramatic at the time. A contractor is engaged, paid on time, thanked, and the relationship ends well. Three years later the company is acquired, a diligence lawyer asks for the assignment, and the answer is a paid invoice and a work-for-hire clause that never applied. The contractor is now a stranger with a veto, priced at whatever the transaction timetable is worth.

None of this is difficult: one document, signed before the work starts, in the present tense, with the assigned IP defined and the background carved out. What makes it so consistently skipped is that nothing goes wrong for years — and by the time anything does, the cheapest moment to fix it has passed.