Legal Talk 22: Do I need to sign an IP assignment?
We’re meeting for a quick drink in Farringdon.
One thing that has been puzzling you is that people in TechHub have been talking about IP assignments. You don't really know what this is or why you need it. You were wondering if I could shed a bit of light on this.
Okay, I say. It's pretty simple really. As we have talked about before, IP (or intellectual property) is all of your ideas which you have written down. Some of these written down ideas you might have protected via patents, trade marks, copyright etc. When investors are looking to invest in a company, one of the key concerns is who owns all the ideas, you or your company? The thing is that they are investing in your company and so they will want to see all of the ideas (and all the associated IP) vested in your company, and not vested in you as an individual.
“Why?” You say.
Well, the IP is a company’s brand value and if they are putting money into your company that is what they are paying for and so they want to see that IP in the name of your company.
Also, they want to make sure that if you ever leave your company (on an exit or for any other reason) that you don't walk away with the IP and use it yourself or take it to another company. In order to get this all done legally, they will ask you to sign an IP assignment, which is basically an IP transfer that will transfer the IP ownership from you to your company.
“Got it,” you say. “Do I have to do this?” You actually would like to hold on to your IP if you can.
Unfortunately, investors will most likely insist on this if you want the money.
"Oh," you say. “When should I do this?”
Well, I think the best time to do this is early on because at least when the investors ask you about this point you can say that you have already got it sorted out. There are lots of IP assignment templates on the internet that you can use.
Again, if you use a template, I can cast my eye over it and see if it is okay from a legal perspective. You can then sign it and at least that’s one more thing sorted out. In the meantime, here's some weekend reading that I enjoyed greatly: https://www.rocketlawyer.co.uk/documents-and-forms/assignment-of-intellectual-property.rl#.
“Great, it seems pretty straight forward,” you say.
It's gotten pretty crowded and we say our goodbyes.
Looking forward to hearing how things go with you. Always thinking about how I can help you on your company journey from zero to IPO!
Your Legal Coach
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