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What are IP contracts?

In a broad sense, contract is an agreement between parties, in which the parties make provisions regarding a specific topic.

Taking into account the specifics of intellectual property (IP), which is an incorporeal right, the following types of contracts are the most widespread.

Contract for the alienation of the exclusive right, where a party (the right holder) shall transfer or undertake a commitment to transfer the exclusive right, belonging to him, for a result of intellectual activity (an artistic, scientific, art, literature, musical work, etc.) or means of individualization (trademark, appellation of origin) in its entirety to the other party (the recipient).

License Contract, under which one party, the holder of an exclusive right to a result of intellectual activity or to means of individualization (the licensor), shall grant or undertake the commitment to grant to the other party (the licensee) the right to use such result or means of individualization within the limits provided for by the contract. It is evident from the definition, that this type of contract is utilized for the provision of limited rights, and not alienation thereof as a whole.

License Contracts are divided as follows:

  • Exclusive license, where the licensee is granted an exclusive right to use a result of intellectual activity or means of individualization.
  • Non-exclusive license (or simple license), where the licensee is granted a non-exclusive right to use a result of intellectual activity or means of individualization; such license can be granted to an unlimited number of persons.
  • Commercial concession (franchising) is an agreement, in which the right holder is obliged to transfer to the other party (the user) the right to use a complex of exclusive rights belonging to the right holder, (including the right to the trade mark and to the servicing mark, as well as the rights to the other objects of exclusive rights stipulated in the co­­ntract, in particular to the commercial designation and to the production secret (to the know-how)) in the user’s business activity for a fee.

Specifically, a whole complex of exclusive rights (e.g. a trademark + an invention +  a know-how) is transferred via this type of contract. This type of contract can also be used to grant business reputation (goodwill), as well as commercial experience of its owner in a particular field. Sometimes consumers have no idea they are entering a shop or a fast food restaurant, for example, Zara, Burger King or Subway, operating under a franchise.

Commission is a contract under which an author undertakes to create a scientific, literary or artistic work stipulated by the contract.

Contract for scientific research – under this contract the contractor undertakes to carry out scientific research, specified by a technical assignment.

Contract for design and development activities — under this contract the contractor is obligated to design a product sample or a technology along with respective design documentation thereon.

It should be noted, that this list contains only the more frequently used types of IP contracts. Keep in mind that parties may include any legal terms and stipulations in an IP contract  regarding the use of results of intellectual activity and means of individualization; this results in a mixed contract.

Is it required to register the contracts?

It depends. In case of a contract for copyright and related rights (rights for a book, a song, etc.), registration is not necessary.

Should the subject matter of the contract apply to inventions, industrial designs or trademarks, the registration of the contract (alienation of an exclusive right, license, franchise) is mandatory. The absence of registration is considered grounds for recognizing of the contract as unconcluded (void).

What does it take?

A correctly concluded and registered contract allows you to accommodate your interest. In practice, the contract is usually created by a single party, most interested in signing it on their own terms.

We believe that it is necessary to negotiate a contract based on the interests of all parties.

Otherwise the conditions, imposed by the other party under the contract, might not be mutually beneficial, oppressive even.

If you have never grappled with intellectual property contracts before, we strongly advise you to seek assistance from a professional law firm to analyze your situation and draft a contract satisfactory for all parties.

Besides, some contracts have to be registered; the absence of said registration will render such contracts void.

Respectively, the registration implies specific procedure, paperwork and fees. Not everybody is ready to spend time and effort researching the fine points of these matters.

The debate regarding the difficulties and complexities of IP contracts can go on forever; when all is said and done the client is the one to make a choice. At least we tried to be convincing.

Fees and pricing

Our prices are listed in ”Price of services“. The final cost will be determined by our specialist after an analysis of your case and documents sent via the feedback form.

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    Help to companies to Protect their Intellectual Property (IP)

    Help to companies to Protect their Intellectual Property (IP)

    DobroZnakЪ LLC glad to inform you, that in this "hard", but interesting Time, we are decided to help to Russian and International companies to Protect their Intellectual Property (IP).