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Difference Between an IP Licence vs an Assignment in England

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Your business has valuable intangible assets that you can benefit from financially. Most companies have intellectual property (IP) assets such as copyrighted materials, trade marks, design rights, and patents. You may wish to licence or sell these assets to other businesses or people. This article will explain the difference between an IP licence and an assignment in England.

Intellectual Property Rights

Your IP assets may include your:

  • copyrighted materials, for example, product descriptions and graphics;
  • design rights;
  • trade marks, for example, your business name and any branding elements associated with your company; or
  • patents on any inventions. 

As with any other business asset, you can sell your intellectual property or allow someone else to use it. You can do this with a licence or an assignment. 

Licensing Your IP 

Intellectual property licensing is where you give someone else the right to use your IP asset, but you want to maintain ownership of the asset and continue to use it yourself. The licence agreement will provide the licensee with specific rights to use your IP.  You can grant:

  • a non-exclusive licence where you also want to continue to use the IP; or 
  • an exclusive licence to give exclusive rights to use the IP for the duration of the licence agreement.

You might want to licence your IP rights to another party for several reasons, for example: 

  • you are developing a product you hold patents on or need consultancy advice; or
  • you have obtained a patent for a product but would prefer someone else to make it. 

Licensing your IP rights to others can expand your business into new areas or markets.  

Licences for Patents

A ‘licence of right’ is a specific licence related only to patent rights. It means the patent owner is willing to allow anyone to licence that particular patent upon request. The patent holder would still be able to negotiate the terms of that licence, such as the cost and how long the licence will be for and any limitations on the use, but cannot outright refuse to licence the patent. 

There is a benefit to the patent holder as the IPO halves the annual renewal fees for patents with a licence of right. Also, it is clear to others that you are willing to licence your patent for use by others.

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Assigning Your IP 

If you want to permanently sell or transfer your IP interests to another party, you do this through an assignment. You assign your IP rights in that asset to the other person or business. This means they will now own it, and you will have no right to use that IP. 

You can assign registered and unregistered IP, including copyrights, patents, design rights and trade marks. You should inform the Intellectual Property Office (UK IPO) that you have transferred the rights to a new owner for registered IP, such as patents, design rights, and trade marks.

Which Option is Best for Your Business?

Whether licensing or assigning your IP rights is best for you and your business depends on whether you want to retain ownership of the IP asset in question and why you want to allow someone else to use it. 

For example, if you are considering licensing or assignment to provide business income, you can potentially use a licence to provide ongoing regular income. If you decide on an outright transfer of ownership, it will provide one lump sum. This may be appropriate if you are no longer interested in using the IP asset.

Key Takeaways

If you have valuable business IP assets such as trade marks, patents, design rights or copyrighted materials, you can raise income for your business by licensing or assigning your IP to another party. A licence allows you to grant permission for someone else to use your IP whilst retaining the right to use it yourself. If you no longer want to use your IP at all, you can transfer ownership to someone else through an assignment of your IP.  

If you need help with assigning or licensing your IP rights, our experienced intellectual property lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions

What is an IP licence?

You use an IP licence to grant permission to someone else to use your IP, but you still retain ownership of it and the right to use that IP yourself.  

What is an IP assignment?

An assignment of IP transfers ownership of a particular IP asset to another party. The new owner of the IP will be able to use it and benefit from it as if they were the original owner of that particular IP asset. You will no longer have the right to use the IP asset unless the new owner permits you to use it.

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Rachel King

Rachel King

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