Intellectual property assignment

Intellectual property does not move on its own. Under the Copyright, Designs and Patents Act 1988 an employee's work created in the course of employment belongs to the employer by default, but a founder's work before incorporation does not, a contractor's does not, and an agency's does not. Without a written assignment the company has at best an implied licence to use what it paid for, and the person who wrote the code or drew the brand still owns it.

That gap does not hurt until the day someone looks, and the day someone looks is a funding round or a sale. This is the document that closes it.

It is a deed, which changes how it is signed

A deed is binding even where the company pays nothing or a nominal £1, which is why this form is used. The price is that the signing formalities are real. An individual must sign in the physical presence of a witness who then signs as well, and that remains true where the deed is signed electronically, so a witness watching over a video call is not sufficient. A company may instead sign by two directors, or by a director and the company secretary. A deed signed incorrectly is the kind of defect found by someone else's solicitor at the worst moment.

Complete both schedules, particularly the second

Schedule 1 lists the works being assigned, along with registered rights, domain names and accounts. Schedule 2 lists everything the assignor is keeping and every third party or open-source component built into the works. An empty Schedule 2 is the commonest reason an assignment fails at investor due diligence, because it either says nothing was reused, which is rarely true of software, or it says the exercise was never done.

Open source deserves its own line. A component under a copyleft licence built into the product is not a problem in itself, but it is a problem that a buyer wants disclosed rather than discovered.

The optional clauses

Clause 4 offers three consideration options: a nominal £1, a stated sum, or no separate payment because the assignment forms part of an existing engagement. Clause 9 is a licence back, where the assignor needs to keep using something they created, and clause 10 deals with employees. Keep what applies and delete the rest.

Where the assignor is an employee

Works created in the course of employment may already belong to the company by operation of law, so the deed confirms and tidies rather than transfers. That is still worth having, because "in the course of employment" is a question of fact and an employee who built something at home on a Sunday may fall outside it.

Do it early

An assignment signed at incorporation costs nothing. The same assignment sought from a founder who has since left, or a contractor who has moved on, costs whatever they decide to ask for.

Our intellectual property and trade mark solicitors handle assignments and the registered rights that go with them, and our startup team puts the founder set in place before a round.