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Agreement / sale of intellectual property

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Category:Intellectual Property

Memorandum of agreement setting out the details of assignment of intellectual property rights with all the necessary clauses including: assignment, breach, warranty, governing law etc.



1. INTRODUCTION


The creativity and ingenuity which flows from human intellect continuously expands the realm of human knowledge and experience. Such creativity and ingenuity can be in the form of a groundbreaking new legal theory, a new mathematical procedure, or an exciting new novel. This resulted in the development of the concept of intellectual property.

Only certain forms of human creativity are deemed of sufficient importance to qualify for legal protection. This article will provide the legal framework surrounding intellectual property as well as the legal basis for selling intellectual property.

2. THE VALUE OF INTELLECTUAL PROPERTY


The South African Constitution specifically entrenches the right to property. Section 25(1) provides that “no one may be deprived of property except in terms of the law of general application, and no law may permit arbitrary deprivation of property.” Although the Constitution does not specifically refer to intellectual property it is convincingly arguable that such property is to be regarded as property under this section. The effect is that intellectual property rights are protectable under Section 25 provided that they constitute “property.”

It must be accepted that intellectual property is often closely related to actual financial benefit. Only a small fraction of society at large is creative and therefore proper acknowledgment will serve as appreciation for the achievement of the person involved.

3. TRADEMARKS, COPYRIGHTS, AND PATENTS


When intellectual property is involved it is important to understand the law behind trademarks, copyrights and patents.

3.1 Trademarks: Trademarks are concerned with the marketing of products and the provision of services. A trader uses a trademark in relation to his/her goods or services to identify or distinguish them from similar goods or services. It is generally accepted that a trademark is the legal object of an intellectual property right.

In South Africa trademarks are governed by the Trade Marks Act and applies to all new applications filed, and to opposition, cancellation and infringement proceedings which commenced on or after the 01st of May 1995.

Proprietors of trademarks may choose whether or not to register their trademarks. If a trademark is registered the proprietor enjoys protection under the Trade Marks Act as well as the common law. If the trademark is not registered, protection will be restricted to common law only.

3.2 Copyright: Copyright law protects the material expression of ideas apart from the physical embodiment of the work in which they are expressed. All matters relating to copyright are regulated by the Copyright Act.

The Copyright Act extends copyright protection to the
following range of works:
• Literary work;
• Musical work;
• Artistic work;
• Sound recording;
• Cinematograph film;
• Broadcast;
• Programme-carrying signal;
• Published edition;
• Computer program.
3.3 Patents:

In relation to patentability, the concept of invention generally involves some form of technological progress. In terms of Section 25(1) of the Patents Act a patentable invention is specified as subject matter that is new and results from inventive activity.

A patentable invention must be capable of being used in trade, industry or agriculture to qualify for protection under the Patents Act.

4. INTELLECTUAL PROPERTY ASSIGNMENT AND LICENSING


An intellectual property assignment is the permanent transfer of an intellectual property right, such as a patent, trade mark or copyright, from the assignor (seller) to the assignee (buyer). Consequently the assignee becomes the new owner of the intellectual property.

Intellectual property assignments transfer the title of intellectual property rights and therefore assignments are equivalent to sale agreements for tangible goods.

In distinction to the assignment of intellectual property is the licensing of intellectual property. In terms of a licensing agreement the owner of the intellectual property retains ownership thereof but grants another party (licensee) permission to use the intellectual property right for a specific amount of time and a specific amount of money.

4.1 Assignment and licensing of a trade mark:
• The rights in a registered trade mark may be assigned or transferred by way of an agreement. It is important to note that the assignment of a registered trade mark is only of force or effect if it is in writing and signed by or on behalf of the assignor.

When a person becomes entitled to a registered trademark by assignment or transfer, he/she must apply to the registrar of trademarks, in the prescribed form, to register his/her title.

• A trademark license is an authorisation granted by the trademark proprietor (licensor) giving the user (licensee) the right to use the trademark so licensed.

4.2 Assignment and licensing of copyright: • Copyright is transferrable as movable property by assignment, testamentary disposition (transfer of property upon death of the testator) or operation of law.
An assignment of copyright must be in writing and signed by or on behalf of the assignor, and the work to be assigned needs to be clearly identified in order for the assignment to be enforceable.

• A copyright license is an agreement in terms of which the copyright owner grants the licensee permission to perform an act or exercise a right in relation to the property. There are two types of copyright licensing, non- exclusive and exclusive licensing.
A non-exclusive license may be written, oral or inferred by conduct (the conduct of the parties may have indicated that an agreement exists). An exclusive license must be in writing and signed by or on behalf of the licensor to have any effect.

4.3 Assignment and licensing of patents: • The rights under a patent can be transferred to another party by way of a written cession(the formal giving up of rights), which process is known as an assignment in terms of the Patents Act. Assignment often follows a contractual route, with the cession of the rights being incorporated into the contract.
• Should a patent-rights holder not desire to transfer the patented invention to another person he/she can license the invention to another who then has the right to make, use, or dispose of the invention.
It is not a strict requirement for the license agreement to be in writing.

5. HOW TO ESTABLISH AN ASSIGNMENT


5.1 The “in writing” requirement – in order to be valid and binding the assignment must be in a written form and signed by both the assignor and the assignee or an agent of either party.

5.2 Payment – generally, assignments are made by paying a once-off sum of money, however, the parties can agree upon a different form of payment in the assignment contract.

5.3 Identification of the intellectual property – it is essential that the intellectual property right which is being transferred is clearly identified. 5.4 The law regulating the contract – in the event of conflict between the parties, it is important to establish the law governing the interpretation of the contract and to establish the correct court to deal with the dispute.

6. INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS


Once intellectual property rights are protected it is also important to be aware of how to enforce these rights.

6.1 Trademark infringement: In the event of a trademark infringement, civil law proceedings can be initiated against the counterfeiters if the trademark is registered or well-known. The trademark proprietor will be entitled to the following relief:

• an interdict preventing the continued use of the trademark;
• damages or a reasonable royalty which would have been payable by a licensee for the use of the trademark;
• an order for the removal of the infringing mark, or the surrender of the offending goods.

6.2 copyright infringement :
In the case of copyright infringement civil law proceedings can be instituted. In certain circumstances, copyright infringement can be a criminal offence and criminal charges can be laid against the infringer, which can give rise to severe penalties being imposed.

6.3 Patent infringement: Infringement of a patent is in essence a delict and therefore the remedies are primarily the remedies under the law of delict, which includes a claim for an interdict, surrender of the infringing goods, or damages.

7. CONCLUSION


Owing to the ever-expanding application of human creative endeavour it has become a necessity to protect the rights involved in intellectual property. A better understanding of the nuances and dynamics of intellectual property is essential to creating policy frameworks and management practices that balance intellectual property protection and access in such a way that people can harness intellectual property as a tool to facilitate economic and creative growth. ___________________________________________________________
Hi, I’m Kailash Pillay, an attorney from the city of Johannesburg. My passion for the law stems from a desire to improve upon the lives of the vulnerable who fall prey to a corrupt system.
I studied at the University of Johannesburg where I obtained my Bachelor of Laws degree, the starting point to the long journey of becoming a legal practitioner. This profession has taught me to persevere through the complexities of the law and to continually develop my skills as a legal professional.





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