What Is the Difference Between an IP License and an Assignment?

An IP license and an IP assignment are two distinct legal mechanisms used to grant or transfer intellectual property rights. While both involve the use of intellectual property, the key difference lies in the nature of the rights transferred and the level of control maintained by the original owner. Understanding these differences is essential for businesses and individuals who wish to make the most of their IP assets.

Key Differences Between an IP License and an Assignment:

Ownership and Control:

IP License: An IP license allows the IP owner (licensor) to retain ownership of the intellectual property while granting the licensee the right to use the IP under specific terms and conditions. The licensor maintains control over the IP and can continue to use it or license it to others.

IP Assignment: An IP assignment is a transfer of ownership, meaning the assignor (IP owner) fully transfers their rights in the IP to the assignee (the new owner). The assignee gains complete control over the IP, including the right to use, sell, or license it without any further involvement from the original owner.

Duration and Scope:

IP License: A license agreement typically has a specified duration and can be exclusive or non-exclusive. The license may be limited to certain geographic regions or specific uses, and the terms can be negotiated based on the needs of both parties.

IP Assignment: An assignment is usually permanent and cannot be undone. Once the IP is assigned, the original owner loses all rights and control over the IP, unless otherwise specified in the agreement.

Revenue Generation:

IP License: In a licensing agreement, the licensee pays the IP owner (licensor) royalties or fees for the right to use the IP. The licensor continues to receive a revenue stream as long as the license is active.

IP Assignment: With an assignment, the assignor typically receives a lump sum payment in exchange for transferring the rights to the assignee. There are no ongoing royalty payments or revenue sharing after the transfer is completed.

Flexibility and Use:

IP License: The licensor retains the right to use and license the IP to other parties, providing greater flexibility to generate additional revenue streams from the same intellectual property.

IP Assignment: The assignee becomes the new owner of the IP and has full discretion to use or license the IP as they see fit. The original owner no longer has the ability to control or benefit from the IP.

Legal Implications:

IP License: An IP license does not transfer ownership of the IP, and the licensor can continue to enforce the IP rights as the owner. However, the licensee gains legal rights to use the IP as outlined in the agreement.

IP Assignment: An IP assignment involves the complete transfer of ownership, meaning the assignor has no further legal rights over the IP once the assignment is complete. The assignee becomes the new owner and has the full legal right to enforce the IP rights.

Example:

IP License: A software company (licensor) licenses its software code to another company (licensee) for use in a specific market. The software company retains ownership of the code and can license it to other companies in different regions, while the licensee can only use it as per the terms of the agreement.

IP Assignment: A writer assigns the copyright of a book to a publisher. The writer no longer retains any rights to the book, and the publisher becomes the full owner of the copyright, having the right to adapt, sell, or distribute the book as they choose.