A recent posting on the Solo IP blog, subsequently reported by IPKat, raised several questions about the valid execution of IP assignments (and specifically trade mark assignments) as deeds.
IP Draughts would like to offer some thoughts on the points raised. As he understands the position under UK laws:
- Methods of transfer of ownership of IP. The main method of transfer of ownership of IP is by an assignment. There are a couple of other methods, mainly automatic transfer to a dead person’s executors, and subequent transfer to a beneficiary in a will or on intestacy. See eg section 24(1) of the Trade Marks Act 1994, and section 30(2) and (3) of the Patents Act 1977.
- Formalities for assignment. Assignments of UK intellectual property must be in writing, and executed by the assignor. See eg section 24(3) of TMA 1994. Unlike the position under some former IP laws (eg, as IP Draughts understands it, the Patents Act 1949), there is no need under present UK IP laws for the assignment to be executed as a deed. Nor is there any need under IP laws (but see below) for consideration to be given for an IP assignment to be valid or for the assignment to be registered at the UK IPO.
- Underlying contract? Many IP assignments are made as part of a larger commercial transaction or relationship, eg if a consultant develops software for a principal, and assigns copyright in the software to the principal. Where an assignment forms part of a contract, the IP lawyer will typically be concerned to ensure that the contract is valid. One of the requirements for a binding contract under English law is that consideration should be given, or the contract should be executed as a deed. In the latter case, consideration is not required. If it is unclear what consideration is being given for an assignment that is part of a commercial transaction, a party’s lawyer will sometimes either (a) insert a nominal consideration in the written contract or assignment, or (b) execute the contract or assignment as a deed. Alternatively consideration may be found in the underlying relationship, eg if an assignment is made pursuant to an obligation in a binding consultancy agrement.
- Transfer of property by gift. However, it is not necessary for there to be a contract in order to pass title to personal property (including intellectual property). The transfer of property could be a gift. Dredging up his memories of undergraduate law, for a gift to be valid there must be an intention to give and an act of giving. The act of giving IP would seem to be demonstrated by signature and delivery of the assignment. In this situation, consideration would seem to be irrelevant. A cursory examination of the law in this area suggests that the donee must also accept the gift. This seems like a good reason to have the assignee execute the assignment as well as the assignor, even though this is not required by UK IP laws, so as to provide evidence of acceptance. In any case, in international IP assignments, many countries require the assignee also to execute the assignment (eg this is a requirement for assigning an EPC patent application).
- Execution of an IP assignment as a deed. Parties sometimes choose to execute their IP assignment as a deed, eg because of concerns about consideration as mentioned above. As IP Draughts understands current law, a deed is a method of execution of a contract or other instrument. It is, perhaps, misleading to think of a deed as a different type of instrument; rather, it is a different means of executing the instrument, and involves different formalities, eg as to use of a seal (in a few cases), who must sign, requirement for formal delivery, etc. Clearly, if parties do intend to execute their assignment as a deed, they should comply with these formalities. It is no longer a surprise to IP Draughts how often reputable City law firms present deeds for execution that have incorrect signature blocks for universities, charities, government bodies and other “unusual” parties. In many cases, these bodies must use their official seal, even though the requirement to use a seal was abolished for Companies Acts companies and for individuals back in the 1980s. An illustration of this mistake can be seen in the very recent High Court case of Briggs v Gleeds, where the drafter of some pension deeds failed to use the correct signature blocks for execution by partners in a traditional partnership.
- Partial execution as a deed. Although he has no authority for this proposition, it seems to IP Draughts that one can have an instrument (eg assignment or contract) that is intended to be executed, and is validly executed, by one party as a deed and by the other party by simple signature (eg to acknowledge receipt). One would need to analyse the underlying transaction to know whether it is necessary for both parties to execute the instrument as a deed.
- Effect of failure to comply with formalities for deeds. There are two, different problems that can arise: (1) the wrong signature blocks are used (as mentioned above), or (2) the right signature blocks are used, but the parties don’t complete them correctly, eg the space for a witness to sign is left blank, or the witness signs after the party signs, and without actually witnessing their signature. The latter class of problems tends to occur where a party doesn’t involve their lawyer in the signing process. As the discussion of earlier case law in the case of Briggs v Deeds, linked above, illustrates, such failures may or may not be fatal to the validity of the instrument. There is also a strand of case law in relation to “equitable assignments” of IP that don’t comply with the formalities, which may provide an escape route in some cases. IP Draughts would generally be very cautious about allowing a defective deed to be left unchallenged.