Copyright Assignment Agreements
Copyright assignment agreements or licences are routine in Internet business but they can be one of the more difficult aspects of a copyright infringement case for an intellectual property lawyer to prosecute. There are many other issues that can quickly become tricky such as what works are being relied upon as infringed, what rights are granted and being alleged as infringed, who made them exactly, when and in what circumstances where they made, in which jurisdiction and where they made by a UK citizen, and who owns them? Take a look at s1(3) and s153 of the Copyright, Designs and Patents Act 1988 for some of the issues which are periphery but still relevant in bringing a successful case (the “Act”). There are several concepts (below) that will give you a point of entry into a more comprehensive understanding of copyright law, when dealing with copyright assignment agreements.
1. A copyright assignment in copyright assignment agreements can be total or partial. So the person making the assignment -the Assignor -can transfer all of the exclusive rights his or her grants, just one of them or any number he or she likes.
2. copyright assignment agreements can be limited in terms of duration. The author of a literary work could, for example, assign their right to reproduce it in the UK, France, Switzerland and Spain for 4 years.
3. copyright assignment agreements can be reversionary, in other words, the rights can revert back to the assignor on the occurrence of an uncertain event, such as an unremedied breach of contract. (c.f. Crosstown Music Ltd Co. I, LLC v. Rive Droite Music Ltd (CA)  EWCA Civ 1222 and this applies to non-UK copyrights as well as UK copyrights where the agreement deals with foreign copyrights as well as UK copyrights and has an express English Law clause and exclusive English Courts jurisdiction clause (c.f. Griggs Group Ltd v. Evans (No.2) 2004 WL 1074401  Ch. 153,  F.S.R 48,  EWHC 1088).
4. For copyright assignment agreements to be effective, they must be in writing and be signed by or on behalf of the assignor S90(3) CDPA 1988. Effective here suggests a constructive action, that is to give effect to the assignment so that the right(s) are transferred over. This must be read in conjunction with s90(1) CDPA 1988 which states that copyright is “transmissible by assignment, by testamentary disposition,…operation of law, as personal or moveable property”. In other words copyright is capable of being transmitted by operation of law, testamentary disposition or by assignment but to give effect to that transmission there must be a written agreement signed by the assignor. Can you therefore have an oral agreement to assign copyright under operation of English contract law principles? It is trite English contract law that a verbal agreement to which both parties have agreed all the terms (i.e. has reached completion) is legally binding. It follows then that a verbal agreement to assign, provided there is no dispute as to the terms of the assignment between the assignor and assignee, is valid – copyright is transmissible by operation of basic contractual principle under s90(1). Going further, to give effect to that verbal assignment there must be a written agreement signed by the assignor to satisfy s90(3) CDPA 1988, which can be done by way of a confirmatory assignment agreement which refers retrospectively to the earlier assignment. In the United States the position is crystal clear, a right to sue for copyright can be assigned retrospectively. An oral transfer of copyright was held to be validated by the execution of a written “Memorandum of Assignment”, even though it was executed some 9 years after the alleged transfer occurred, 17 U.S. Code § 204 – Execution of transfers of copyright ownership – allows subsequent writing to give effect to an earlier oral transfer and imposes no limit on the period in which the written agreement must be executed. There cannot be any suggestion of fraud since the prevention of fraud is to prevent enforcement of non-existent obligations or where the evidence was misremembered. There is no requirement for the writing to created or signed contemporaneously with the original transfer if there was no dispute between the transferor and transferee (Case: Barefoot Architect, Inc. v. Bunge, 632 F.3d 822, 826 (3d Cir. 2011)).
5. Title to property in England, including copyright is a matter to be determined by English law, Failure to comply with assignment formalities in a foreign state where the copyright originated was not of itself deny the assignee the right to ownership of the UK copyright (c.f Peer International. Corpn v Termidor Music Publishers Ltd 2002 WL 31676375 (ChD) 2002)).
6. s91 CDPA 1988 provides for copyright in a work or class of works as yet unmade but which will upon coming into being enjoy copyright protection can be assigned in whole or in part. The relevant copyright will then rest in the assignee or his successors upon the work coming into being. (c.f. Quickdraw LP v. Global Live Events LLP & Ors  EWHC 233). There is no general principle in English law that a reversionary clause automatically indicates an assignment (c.f. JHP Ltd v. BBC Worldwide Ltd, 2008 WL 1737241).
7. In the case of both licences and assignments, any grant by the copyright owner binds every successor in title except a bona-fide purchaser for value without notice (actual or constructive).
8. Calling an agreement a licence when it is in practice an assignment does not make it a licence.
9. When transferring data base rights (e.g. you want to buy a business but are only or particularly interested in the data base) reference should be made to The Copyright and Rights in Databases Regulations 1997 (S.I. 3032/1997) as amended by The Copyright and Rights in Databases (Amendment) Regulations 2003 (GB132) (the “Regulations”).
10. The position on transfers of title to database rights is stated to be the same as that granting copyright or by operation of law under the Regulations.
If you are thinking of bringing any type of intellectual property infringement case or are in any market where you think that your competitors might infringe on your intellectual property then it is crucial that you get specialist advice early on in your projects.
If you like this article on copyright assignment agreements then you might like our articles on:
Copyright infringement on You Tube
To book a face to face consultation for legal advice about drafting copyright assignments contact a lawyer that specialises in copyright assignments (charge rates may apply and may vary).
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The following template agreement is suitable to use and adapt when you are working with an individual freelancer or corporate contractor on a project and wish to have an assignment of the intellectual property rights (including copyright, patents, trade marks and design rights) granted to the business that instructed the freelancer/contractor:
IPR Assignment Template
Where you see capitalised text in square brackets this indicates areas where you need to remove the text and brackets and insert the relevant party names and other information in normally formatted text to match the rest of the document.
The agreement can be signed and exchanged at the end of a project as a condition to be met before payment for the work is made. You could also use it to confirm a transfer of ownership that was previously intended but not recorded in writing, or to transfer ownership of intellectual property when joining a very early-stage startup company as a co-founder or other key position (which may also involve other agreements such as share options, vesting of shares, consulting and employment contracts).
One clause that might also be needed is a global, perpetual royalty free licence (with an ability to sub-license) for all intellectual property rights where the freelancer wants to retain ownership themselves of certain key rights (that are key to their ability to be able to trade independently), but that the company that has commissioned them to do the work require the freedom to use and commercialise such rights as they choose in the future without recourse to the freelancer.
It is important to note that some kinds of intellectual property rights have different transfer requirements. For example, where you have contractual licences of intellectual property rights then such licences will need to be novated rather than assigned. Rather than assigning only the rights to another party, novation creates a new contract as it requires the consent of all parties to replace the original party to the contract, whereas assignment doesn’t require the consent of the non-assigning party. Also, an assignment of registered IP rights should itself be registered with the appropriate regulatory authorities. For instance, an assignment of a UK registered trade mark should be registered with the UK IPO (using Form TM 16 – Application to record a change of ownership).
An assignment must be executed as a deed (the signatures need witnessing) if there is no consideration for the assignment or it contains the grant of a power of attorney, as our example template does. This power of attorney ensures that the assignee can, itself, execute and sign any necessary documents (without the assignor’s assistance) which may be required to enable it to enjoy the full benefit of the rights assigned by the agreement. A power of attorney would therefore be useful if the assignor were to refuse to help, or become untraceable.
The assignee may also want to ask for warranties from the assignor. These will force the assignor to disclose more information about the rights being assigned, such as whether any third parties have been granted any licences to use any of the rights. The assignee may use the information to adjust the price. If the assignor doesn’t disclose relevant information against the warranties then the warranties will provide the assignee with financial compensation if a warranty is breached (damages for breach of warranty generally being calculated on a contractual basis).
DISCLAIMER: This document may not be suitable for your circumstances and we recommend you seek legal advice before using it. Jonathan Lea Limited does not take any responsibility for any events that arise as a result of your use of this document.
Tags: Copyright, Intellectual Property, Patents, Trade Marks