To License or To Assign? Which Should You Opt For?

When dealing with intellectual property rights under UK law, agreements and negotiations would often make use of keywords that carry distinct legal and commercial consequences. Two important terms are assignment, and licensing and both relate to the economic rights within a particular piece of intellectual property (for the purposes of this distinction, moral rights would sit outside this framework).

Assignment

The simplest way to view an assignment of rights is that the rights contained within a particular property are transferred, from one person to another. An assignment can deal with part of the rights associated with the property, but may also deal with a full assignment of rights.

This assignment route is usually the route to go for when selling a particular piece of property with the new owner of the work wanting to become the ultimate owner of all the economic rights contained within the works.

An assignment of rights will generally need to be in writing under UK law, however this would ultimately depend on the particular intellectual property right being assigned as well as the applicable statutory requirements. The assignment is generally considered to be final once validly executed.

Licence

A licence on the other hand does not transfer all of the rights to the third party, but rather ensures that the owner retains the rights associated within that work. Instead, the owner provides a licence to the third party, to make use of the property in a manner that’s specified as detailed by the owner. Licences can be exclusive or non-exclusive and can also be a sole licence.

The benefits of opting for a licence would be that the owner of the property may impose restrictions on the use of the property and may limit the usage to certain aspects. A licence may be limited in relation to a number of different factors, including territory (in use within the UK or elsewhere), time (perpetual or time-limited) and whether the licence can be revoked (when can the licence be terminated).

Whilst a licence does not always need to be in writing, it is always suggested that an agreement is drafted and reviewed by a specialised IP solicitor in order to ensure that your rights are adequately protected.

When should you opt for a licence over an assignment (or vice-versa)?

The route you should opt for, would often depend on several factors, including whether you would want to make use or specify any limitations on the work being licensed to the third party, or whether the third party would want to own the intellectual property out right.

Payment is also an important factor as whilst an assignment of rights is usually dealt with through a one-off payment for the assignment to be completed, a licence may include clauses dealing with payment, possibly including royalties or different consideration structures.

Should you require any assistance, our solicitors would be very well positioned to provide you with advice in relation to which route to go for in order to accurately reflect the commercial reality of the transaction, but also to protect your position within that transaction.

If you are currently thinking of licensing or assigning any intellectual property, get in touch with us at info@briffa.com and our specialist solicitors would be more than happy to assist you!