How to Transfer Intellectual Property to Beneficiaries
If you hold intellectual property rights, you may wish to transfer them to someone else. This is most commonly done through the execution of an intellectual property license agreement. License agreements are quite flexible. The intellectual property rights that you transfer may be exclusive or non-exclusive, temporary or perpetual, and worldwide or limited to a specific geographical area. The specific content of a license agreement will also depend on which type of intellectual property rights you hold.
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Instructions
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Secure legal rights to the intellectual property that you possess. Although copyrights attach as soon as an original work is reduced to a tangible medium (including software source code), and rights to original trademarks attach as soon as the marks are used in business, patent rights do not attach until a patent application is approved. Further, copyrights and trademarks should be registered with appropriate authorities to obtain full legal protection. If you have already taken these steps, make sure you comply with all required renewal formalities so that your intellectual property rights do not lapse.
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Download a sample license agreement (see Resources section) and use it as a general guideline for drafting your license agreement. Do not over-rely on it, however, because each license agreement is different.
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Specifically describe the intellectual property you are transferring in the license agreement, to the extent that this can be done without compromising confidentiality. If the property has been registered, identify it through its registration number.
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Add a royalty clause. Royalties may be paid in lump sum (as is typical for a perpetual license), or in installments (typical for intellectual property used in products sold to end users). If royalties are to be paid in installments based on sales volume, insert a minimum royalty clause to give your licensee an incentive to aggressively market it.
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Determine the scope of your grant of license. Perpetual, non-exclusive rights are generally the most profitable. You may want to consider limiting the geographic scope of the grant of license if you are granting multiple non-exclusive licenses, so that each licensee will enjoy a monopoly in a particular location.
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Include a confidentiality clause in order to head off third-party infringement. This clause should provide for high liquidated damages in the event of breach of confidentiality. If you are licensing computer software, you need to prevent your licensees from transferring source code to subsidiaries and affiliated companies. Confidentiality is less important for patented inventions, because details of the invention are published by the patent office prior to patent approval.
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Insert a clause dealing with the licensee's rights to transfer the intellectual property, sub-license it to a third party, modify it, or combine it with other products.
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Include any warranties you are willing to offer, and add language limiting your liability for special damages (lost sales if a software malfunction causes the licensee's factory to shut down, for example)
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Add housekeeping provisions common to all business contracts ("boilerplate") such as dispute resolution and governing law.
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Tips & Warnings
It is possible to sell your intellectual property rights outright instead of licensing them. In this case, however, you would have to change the name on the patent or on the copyright or trademark registrations.
Do not sign a license agreement until an experienced attorney has looked over it and approved it. The attorney should be someone who is representing you, not the licensee.
