How Do You Transfer IP?

The purchase or sale of most businesses will involve transferring intellectual property ("IP") rights - i.e., patents, trademarks, service marks, copyrights, or trade secrets. Transferring these intangible assets may require some work most people aren't aware of.

Your purchase agreement should clearly identify the IP being transferred. It also should assign the IP to the buyer. In addition, you should consider having separate "assignment" documents signed at closing (I'll tell you why below). Finally, you need to record the assignment in the appropriate government office if the IP is registered (e.g., a registered patent, trademark, service mark, or copyright).

If a patent is registered with the US Patent & Trademark Office ("PTO") , shortly after closing, you need to record the assignment with the PTO by filing the appropriate form, providing a copy of the transfer document, and paying the applicable fee.

If a trademark or service mark is registered with the PTO , shortly after closing, you need to record the assignment with the PTO by filing the appropriate form, providing a copy of the transfer document, and paying the applicable fee.

If a copyright is registered with the US Copyright Office, shortly after closing, you need to record the assignment with the Copyright Office by filing the appropriate form, providing a copy of the transfer document, and paying the applicable fee.

You get the idea.

Trade secrets cannot be registered, so you don't record their assignment with any government agency.

Filings are public record. You create separate assignment documents for each type of IP so that you don't have to record (and disclose) your purchase agreement with all its confidential terms (e.g., purchase price) with these agencies (and ultimately, the public).

Filing correctly ensures that the chain of title for each type of IP reflects the transfer - similar to how the ownership of a house can be traced backward through the chain of title to show how the buyer has good title to the property. Recording transfer documents can be evidence against conflicting transfers of IP.

So, when you're buying or selling IP, be aware that there is more to it than just signing a purchase agreement.