An Intellectual Property Assignment Agreement is a written and enforceable contract effectuating an assignment of intellectual property rights from an “Assignor”, the owner of the rights, to an “Assignee”, the purchaser of the rights, in exchange for valuable consideration. Unlike an Intellectual Property License Agreement, which provides the licensee a right to use, but not to own, certain intellectual property rights, an assignment agreement involves a complete and exclusive sale of the rights, thus giving the assignee complete ownership to exploit the intellectual property rights in whatever way, shape, or form it likes, subject to any limitations listed in the agreement. Usually the assignee will pay the assignor cash or stock consideration in exchange for these rights.

This article will take a look at a traditional IP Assignment Agreement between two companies. In our hypothetical agreement, the assignee is making to the assignor a combination of both stock and cash payments, the details of which will be addressed in the agreement, along with details regarding the transfer of the intellectual property rights, and any other material information in respect to the transactions. The seller of the IP rights is referred to as “Assignor”, while the purchaser is referred to as “Issuer.”

The first section the agreement should provide Definitions of the key terms used in the agreement. Terms that can have more than one meaning, such as “assets”, “business”, “closing”, and of course “intellectual property” should be defined. Next the agreement should address the Issuance of Shares and Transfer of Intellectual Property. The agreement might state that as of the Closing, the Issuer shall sell, assign, transfer, convey and delivery to Assignor the “Assignor Shares and Warrant,” which will be described herein. In return, the Assignor shall sell, assign, transfer, convey and deliver to Issuer all of Assignor’s right, title, and interest in and to Assignor IP rights as defined herein. Then, both the stock to be awarded and the Intellectual Property rights to be transferred should be described in detail. The timing of the payments, be it at the time of closing or at some point thereafter, should also be addressed.

The next paragraph addresses the details of the Closing, such as the location, date, and what each party shall deliver. The deliverables usually include the shares, copyright, trademark, and/or patent certificates, transfer agreement for each, and the IP assignment agreement, and any accompanying agreements. The next paragraph deals with Representations and Warranties, where both parties must warrant that they own that which they purport to transfer to the other party (the stocks and the IP rights), and they are authorized and have the requisite corporate power to execute the transaction documents. Both parties should also warrant that the execution of the agreement will not conflict with any federal, state or local laws, the bylaws of their respective corporation, another agreement, and so on. The parties must lastly promise that the assets to be transferred are own free and clear of any encumbrances, unless provided, and that there are no undisclosed liabilities that could have a material adverse effect on the transaction.

Lastly, the agreement should address general matters in respect to the transaction. The parties should agree that the agreement sets forth the entire understanding of the parties and supersedes all prior agreements; that any amendments must be in writing and signed by both parties; that the agreement shall be binding upon each party’s heirs, legal representatives, successors, and permitted assigns; and that no party may assign the agreement without the other party’s prior written consent. The parties may also want to include a provision recognizing that in these types of arrangements, damages may not be a sufficient remedy in the case of breach, and that the remedies of specific performance orders, restraining orders, and injunctions shall be permitted. Finally, the agreement should also address which law will govern the interpretation of the agreement, whether the agreement may be executed in two or more counterparts, and whether the provisions of the agreement are severable.

These are the key aspects of an Intellectual Property Assignment Agreement. Drafters should be sure to consult Federal intellectual property laws before drafting this type of agreement, and should make sure the parties have a clear understanding of their arrangement. To read and/or download actual Intellectual Property Assignment Agreements, please check out the Agreements section of this website.

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An Intellectual Property License Agreement is an agreement, which provides a licensee certain exclusive or nonexclusive rights to use intellectual property owned by the licensor pursuant to certain agreed upon terms and conditions. The typical Intellectual Property License will include provisions for the payment of compensation, often referred to as a royalty, and will provide for the continued protection of the intellectual property rights to be licensed under the agreement.

The key difference between an Intellectual Property License Agreement and a standard sales contract is the purpose of the agreement. The purpose of an intellectual property license agreement is generally to enable the commercialization of the intellectual property owned by the licensor and to define the terms and conditions of the license grant. In contrast, the purpose of a standard sales contract is typically to sell a good or goods, and to define the terms and conditions of such sale.

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This post will cover the key provisions of an agreement to distribute filmed entertainment, usually made between a producer or licensor (”Producer”) of a motion picture and a distributor (”Distributor”).

Picture: This provision covers the specifications of the film to be delivered by the producer to the distributor. For instance, how long or short must the film be? What type of film, in terms of content and intended audience, will be delivered?

Territory: What is the scope of the agreement? Some distribution agreements are for worldwide rights to distribute the film; others cover just domestic or foreign rights.

Term: The parties must agree as to how long the distributor’s exclusive rights will last.

Rights Granted: This provision will spell out whether or not the distributor’s rights are exclusive. The scope of rights given to the distributor will vary from agreement to agreement, but are usually exclusive within a given territory.

Definition and Disposition of Gross Receipts: “Gross receipts” is a term used in the film industry to measure the success of a film. While there is a generally accepted definition of gross receipts, the agreement should nonetheless define the term. Generally speaking, the term “net receipts” is defined as gross receipts minus all distribution expenses.

Motion Picture distribution agreements will vary, but every agreement will cover these provisions in detail. Both producers and distributors are wise to consult an experienced entertainment attorney before signing a distribution agreement.

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This article will cover the key provisions of an agreement to distribute filmed entertainment, usually made between a producer or licensor (”Producer”) of a motion picture and a distributor (”Distributor”). These agreements are critical to the process of filmmaking; without them, films would not be viewed by the public.

1) Picture

This provision covers the specifications of the film to be delivered by the producer to the distributor. Will it be a color picture or black and white? What type of film will be used? (35 mm vs. 16 mm) How long or short must the film be? For feature films, it is typical for the distributor to require that the film be no shorter than 90 minutes and no longer than either 105 or 120 minutes. Producers with a bigger name, and hence more leverage, however, may be able to negotiate for more freedom when it comes to the acceptable length of the film. Lastly, the distributor will often require that the film be capable of receiving an MPAA rating of no more restrictive than an “R”, or “PG-13″, depending on the type and intended audience of the picture.

2) Territory

It is important for the parties to agree on what territory or territories the distribution agreement covers. Some distribution agreements are for worldwide rights to distribute the film; others cover just domestic or foreign rights. This provision can also cover whether or not the producer is obliged to deliver a subtitled version of the film so it can be shown in foreign markets.

3) Term

The parties must agree as to how long the distributor’s exclusive rights will last. This term is measured from the date of delivery. The distributor may also want to negotiate for a right to match any offer as to extending or renewal of the term.

4) Rights Granted

Here is where the agreement will lay out that whether or not the distributor is receiving the exclusive right under copyright and otherwise to exhibit, distribute, advertise, promote, publicize, market, sell, manufacture, license and otherwise exploit the picture in the territory during the term, in all forms of theatrical, free television, pay cable, subscription cable, and any other medium agreed upon by the parties. The scope of rights given to the distributor will vary from agreement to agreement. However, usually the right to advertise the film through commercials and billboards accompanies the right to distribute it.

5) Definition and Disposition of Gross Receipts

“Gross receipts” is a term used in the film industry to measure the success of a film. While there is a generally accepted definition of gross receipts, the agreement should nonetheless define the term. Usually gross receipts means “any and all gross sums actually received by the distributor, arising out of or in connection with the exercise of any of the rights herein contained.” Minimum guarantee payments, advances, and/or security deposits are usually included in gross receipts. By contrast, “net receipts” should be defined as well. Generally speaking, the term “net receipts” is defined as gross receipts minus all distribution expenses.

After providing these definitions, the agreement must spell out what percentage of the gross or net receipts the producer is entitled to and what percentage the distributor will keep. For instance, a common arrangement is for the producer to be entitled to 80% of the net receipts, and distributor entitled to 20%. This split is obviously negotiated by the parties.

These are the most important provisions of a film distribution agreement. Other provisions covering distribution expenses, credits, representations and warranties, and termination rights should also be covered. But it is most important for the producers and distributors to first agree on the territory, the term, the specification of the picture, the rights granted, and the disposition of gross or net receipts between the two parties.

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