About Drafting Intellectual Property (IP) Assignment Provisions

Common Mistakes in Drafting IP Assignment Provisions

I often see provisions that say something like, "Buyer owns the intellectual property that results from the Seller's services under this Agreement."

This approach falls short in a few ways.

First, it doesn't say the vendor assigns the rights. It doesn't even include an agreement to assign in the future. It is just a statement.

Second, the statement refers to the intellectual property (the software code), not the intellectual property rights (the copyright covering the code).

Don't do that.

Best Practices for Strong IP Assignment Clauses

Instead, use explicit and unambiguous language of assignment, such as "Seller hereby assigns all of its Intellectual Property Rights in the Deliverables to Buyer."

You should also consider adding these other concepts:

- an obligation to grant rights created in the future with the language "hereby grants and shall grant,"

- related warranties, including warranties of title and non-infringement, as warranties offer a stronger remedy than a contractual covenant,

- an indemnification for breach of those warranties to ensure that your vendor covers any claims, and

- an exclusion from the cap on damages for liability relating to these IP concepts.