What is IP Assignment Agreement and Why is it Crucial for Every Business


What is IP Assignment Agreement and Why is it Crucial for Every Business

What is IP Assignment Agreement and Why is it Crucial for Every Business


You may be starting or acquiring a company. Then you need the Intellectual Property Assignment Agreement (IP) to transfer intellectual property. These include innovation patents, source code, and customer lists.


In a technology business, what the investor finances is often the IP assets.



Your products and services depend on certain critical IP assets. Then an investor will undertake due diligence. It will help him to understand your right to use such assets.


In this post, we will tell you why an IP assignment agreement is required. So, we will also list out the steps to draw such an agreement.


What is Intellectual Property Assignment Agreement?

An IP assignment agreement is a contract.


It transfers the rights to the intellectual property from the creator. The rights go to another entity, such as an acquiring company.


You may (and should) ask your employees to sign the IP agreement. Additionally, this will assign to your company any ideas, work products, or inventions of the business.


Type of Intellectual Property Assignment Agreement


  • Technology assignment agreement

This assigns your startup any intellectual property before you form the company.


The developer(s) may keep individual intellectual property rights under certain circumstances. Hence, they may even sell the rights to you for equity or cash.


  • Invention assignment agreement

This assigns new company ownership of any relevant intellectual property created by employees. 


The agreement includes the founder(s) and employees as signatories. So, they become parties to a confidentiality agreement and an invention assignment agreement.


Checklist for Intellectual Property Assignment Agreement

You should include a couple of critical points in the agreement.


  • The employee must disclose to your company any inventions, ideas, and products of the firm. These must have been made during the period of employment.


  • Your company is the owner of inventions, ideas, discoveries, and work product.


Key Clauses of Intellectual Property Assignment Agreement


  • Assignment Clause

This requires employees to assign their inventions to your company. This will ensure you have total ownership of the intellectual property.


This could be narrowed to employee inventions only. It could be broadened to include anything the employee creates.


Therefore, your IP lawyer should include the following assignment clause into the IP agreement:


  • The actual assignment


  • The timing of the assignment


  • Already owned IP


  • “All things necessary.”


  • Moral Rights


  • Third-Party Confidentiality/Trust


  • Warranty Clause


Your IP lawyer should include the following warranties into the IP agreement:


The Assignor represents and warrants that:


  • It is the absolute owner of the Property;


  • It has the authority to assign the Property in full;


  • The Assignor has not licensed any right, title, or interest in the Property to any third party;


  • It has procured consent on the infringement of the Moral Rights of every author of the Property.


  • The Property does not infringe any Intellectual Property rights or Moral Rights.


  • The Assignor has no other obligations to any party inconsistent with the Agreement.


  • Power of Attorney Clause


You can get this clause added to the agreement. This is so that the firm can administer the ownership rights without the employee. So, this is regardless of whether the employee is willing and able to assist.



An IP assignment agreement assures investors that the IP has been transferred. It consists of the intellectual property that is required to run the business.


Engage qualified IP counsel at the outset of your company. So, this ensures that you have the freedom to operate your business with your inventions.


Make sure that your business can meet investors’ due diligence requirements. You can also take a look at our Venture Capital Pre Screening Assessment to evaluate your business. This will also help you in getting funding for your business in just 5 steps.

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