Assignment vs Licensing: 6 benefits of both when it comes to your IP (Incl. Templates)
When it comes to intellectual property (IP), there are two main ways in which an owner can share their creation with another party; assignment and licensing. While these two terms are often used interchangeably, they are actually very different, and if you’re an IP owner, it’s important to understand the difference between them to ensure you’re taking full advantage of your IP.
What is intellectual property?
Intellectual property refers to creations of the mind, such as inventions, literary and artistic works, brands, names, symbols and designs. Different types of creations can be protected by different types of intellectual property rights, for example, by copyright, trade marks, patents and design rights.
For more information about the different types of IP rights, check out our intellectual property rights: A complete guide for businesses blog.
So now you’ve got the basics covered, how can an IP owner use their IP rights to their advantage?
The rights to IP can be bought or sold (by way of assignment) or licensed. Both assignment and licensing give owners an opportunity to permit another business or person to use their creations.
Assignment involves a transfer of ownership and control, while licensing involves the grant of a right to use IP without transferring ownership. In the same way you can with tangible property; licensing is like renting the IP and assignment is selling the IP to a new owner.
Assignment of Intellectual Property
Assignment of intellectual property is the transfer of ownership of IP from one party to another. This means that the original owner is no longer the owner of the IP, so the transfer is permanent. The new owner will have full ownership and control over the IP. Assigning IP is almost like selling a house - when you sell a house, the buyer becomes the new owner, and the buyer will have the right to use, sell, or lease the property as they see fit. Similarly, when you assign your IP rights, you are transferring ownership of the IP to another party, and they now have full control over it.
There are several benefits of assigning intellectual property, including:
1. Clear ownership: When intellectual property is assigned, the ownership rights are transferred from one party to another, providing clarity and certainty about who owns the IP. This can be particularly important in situations where there may be multiple parties claiming ownership or where ownership is in dispute.
2. Financial gain: Assigning intellectual property can also provide the potential for greater returns on the investment in developing or acquiring the IP. By transferring ownership to another party, the owner may be able to sell the IP for a lump-sum payment. This can be particularly useful for companies that have IP that is no longer relevant to their current business model.
3. Mitigate risk and reduce costs: Certain types of IP can be costly to maintain and can be a risk if it is not being actively used or protected. Assigning IP to a new owner can help to mitigate this risk by reducing the number of assets that need to be monitored.
If you’re looking to assign IP, check out our fully customisable assignment of IP templates:
- Assignment of Copyright (deed)
- Assignment of Trade Marks (deed)
- Assignment of Patents (deed)
- Assignment of Intellectual Property (deed) (which can be used where more than one IP right is being assigned)
Licensing Intellectual Property
Licensing of intellectual property, on the other hand, is the grant of a right to use IP without transferring ownership. The owner of the IP retains ownership but gives another party permission to use it under specific conditions.
For this reason, licensing IP is like renting a house - when you rent a house, you don't own it, but you have the right to use it for a specified period of time, subject to certain conditions set by the owner. Similarly, when you license your IP, you are allowing another party to use it for a specified period of time and under specific terms that you set.
Licensing intellectual property can have several benefits for IP owners, including:
1. Generating revenue: One of the primary benefits of licensing intellectual property is the potential to generate revenue. By licensing their intellectual property, the owner can grant others the right to use it in exchange for a fee or royalty. This can be a significant source of income for the owner, particularly if their intellectual property is highly valuable.
2. Expansion of brand reach: By licensing their IP to others, the owner can expand the reach of their product or technology beyond their own resources. This can help to increase the visibility and reputation of their IP. This may also give the IP owner access to new markets and customers that they may not have been able to reach on their own.
3. Control over the use of your IP: Licensing intellectual property gives the owner control over how the intellectual property is used, which helps to ensure that the IP is used in ways that align with the owner of the IP's goals and values. Additionally, under the conditions of the licence, IP owners can establish relationships with potential partners, which can lead to new opportunities for growth and development.
If you’re licensing intellectual property, check out our IP licence templates:
- Intellectual Property Licence (for use where both copyright and trade marks are being licensed)
Assignment and licensing are two very distinct methods to exercise IP rights, each giving owners an opportunity to permit another party to use the IP.
How can Docue help businesses or individuals when it comes to intellectual property?
Lawyer-grade templates: Without knowledge of both licensing and assignment, IP owners could end up navigating tricky waters if their intended IP contracts didn’t assign or licence their IP as they had intended. That’s why at Docue, we’ve worked hard to provide accessible and affordable IP templates with helpful information boxes, created by qualified lawyers to guide you through the process at the click of a button.
E-signatures: With Docue’s ultra-modern contract drafting technology, you can complete the document and send it for signature in minutes.
Secure storage: Once signed, you can store all of your contracts in Docue’s storage vault with easy access for your chosen admins, so you’ll never lose a contract again.
Start a free, no risk trial today and see why our customers love using Docue.