What is an Intellectual Property agreement and when might you need one?

Many activities which include a component of Intellectual Property (IP), including patents, trade marks, registered and unregistered designs, copyright, trade secrets and know how, will also involve interactions with other parties. These can arise for example with simple licence arrangements, as part of a commercial sale of a product or a service, or through a collaborative program with a research partner. In these and similar cases, management of IP is important and there are certain risks to be mitigated and pitfalls to be avoided. This article gives an overview of common types of interactions which involve IP and the types of contractual arrangements which can be used to ensure that the parties involved are suitably protected.    

It is common for two parties to begin any negotiations by holding discussions to find common ground and goals. A Non-Disclosure Agreement (NDA) or Confidentiality Agreement (CA) can be used to make sure that information exchanged in such discussions remains confidential and therefore capable of being protected. Obligations on each party to keep information secret and controls on use are common.  

An IP owner may wish to licence IP rights, for example to allow another party to manufacture or sell certain goods or provide services. A Licence Agreement can be used to specify which rights are being licensed and the obligations on the parties. In a patent licence for example, the agreement may specify which products can be produced and where they can be manufactured and sold. A trade mark licence may spell out how the trade mark must be used and on which types of products and where. IP licences can also limit the pool of those who can use the IP rights (exclusive, sole or non-exclusive) and importantly, set out details of royalty payments and how these are to be managed.

IP rights may be sold or transferred from one owner to another. This may be as an transfer of individual rights, a single patent or a trade mark for example, or as part of the sale of whole business. An Assignment Agreement will detail the rights to be transferred, any payments or costs due and arrangements for ongoing responsibilities for the rights concerned. Many IP rights are territorial and so it is possible for an owner to assign rights only for certain parts of the world while keeping rights, or licensing to another party, in others. As with any commercial sale, it is important to ensure that any contracts are between the correct legal entities and to ensure that all legal formalities for the relevant jurisdiction are complied with.

It is common for two or more parties to come together to undertake research and development and so potentially produce IP. For example, an industrial company may partner with a university or participate in a research consortium involving several commercial and academic partners. Issues around IP rights in these circumstances can be complex. Each party will have its own commercial needs which may often overlap with others. It is critically important that the rights that each party has in any IP generated are clearly defined and agreed in advance. A well-drafted Research and Development (R&D) Agreement will specify matters such as which party owns which IP rights, whether other parties have any rights (e.g., by way of a licence) in any IP that they do not own, who is responsible for drafting and prosecuting applications for IP protection, who pays, and how enforcement of any IP rights is to be managed. 

IP Agreements may be stand-alone contracts, for example a simple NDA, trade mark licence or copyright assignment, but often they form part of a wider commercial contract. A product sales contract may for example include provisions on trade mark use and issues relating to copyright are commonly present in contracts relating to media, publishing, and music. The sale or transfer of an entire business by way of a takeover or merger for example will likely involve the sale or transfer of numerous different types of IP right, all of which need to be carefully considered. It is also common for a number of the types of agreement described above to be present a single agreement. For example, an R&D Agreement will often also include non-disclosure or confidentiality provisions and a patent licence agreement may include a trade mark licence too.

Our attorneys at Mathisen and Macara have wide experience of drafting and negotiating all types of IP agreement. We will work with you to understand your requirements and to ensure that any IP agreements that you enter into are fit for purpose and provide you with the protection you need. We understand that issues around IP rights and IP agreements can feel daunting so please get in touch if you have any questions.