Chapter 23:TRANSFERRING IP RIGHTS: ADDENDUM TO UNRECORDED ASSIGNMENT OR LICENSE

CHAPTER 23

Transferring IP Rights # 3

ADDENDUM TO UNRECORDED ASSIGNMENT OR LICENSE

THE LAWS OF MANY COUNTRIES require the recording of agreements to assign, license or otherwise transfer some or all rights in IP to another entity or individual. Failure to record can mean that the agreement will be deemed void by the legal forums in the particular country, and therefore unenforceable between the parties to the agreement. In addition, or sometimes alternatively, the agreement can be considered invalid as against third parties (someone who is not a party to the agreement). In either event, if commercial transactions have continued in relation to the IP rights transferred, the IP owner can end up losing the IP rights, or at least be unable to enforce exclusivity in them, because the IP owner will be deemed to have acquiesced in the unauthorized (i.e., infringing) use of the IP. If business operations have continued AND you have an agreement that has not been recorded against your IP registrations, you need to determine whether you can immediately record it. You may be able to record the agreement with payment of a penalty fee, or you may have to execute a new agreement (assuming the other party will consent) and have it recorded. If you can still record the agreement, you may want to execute the Addendum to IP Transfer Agreement shown here in order to “close the gap” between the effective date of the transfer and the recordal date. This Addendum makes no modification of the initial IP Transfer Agreement, but simply requires full disclosure and transfer of IP rights that may be implied by law in the absence of recordal of the IP Transfer Agreement. If the IP Transfer Agreement is an assignment, in which all property rights are transferred without reservation, the disclosures and transfers in this Addendum will be made FROM the former IP owner (assignor) TO the new IP owner (assignee). If the IP Transfer Agreement is a license or other agreement merely giving some property rights (e.g., the right to use the IP) but reserving ownership rights, the disclosures and transfers are made FROM the party who is licensed (authorized user) TO the IP owner (licensor). This form may be adapted for the particular situation of the two parties. You should also consider an immediate survey of the markets to determine whether any third-party infringement is occurring and whether you need to take action. The following form will not resolve a problem with a third-party infringer. It is unlikely that a third-party infringer will quickly bow to your claimed IP rights if you have failed to record the agreement as required by law. You may need to consider other means of enforcement.

Addendum to IP Transfer Agreement

THIS ADDENDUM TO THE [name of IP Transfer Agreement], WHICH IS DATED [date] (HEREINAFTER “THE PRINCIPLE AGREEMENT”), SHALL TAKE EFFECT AS OF [date], BETWEEN [name and address of assignor/licensor], WHICH IS [a/an] [description and nationality] (HEREINAFTER THE [“Assignor”/ “Licensor”]), AND [name and address of assignee/licensee], WHICH IS [a/an] [description and

nationality] (HEREINAFTER THE “ASSIGNEE”/ “LICENSEE”). THIS ADDENDUM IS MADE PURSUANT TO PARAGRAPH [number] OF THE PRINCIPLE AGREEMENT, AND IT IS INTENDED TO CLARIFY THE TERMS OF THE PRINCIPLE AGREEMENT WITH RESPECT TO [country]. COMMENT : The parties identified in the clause should be the same as the parties in the Principle Agreement, and they should also execute the Addendum. The words used to identify each party (e.g., assignor/assignee) should also be the same as the words used to refer to each one in the Principle Agreement. In the last sentence of the above clause, reference should be made to a relevant paragraph in the Principle Agreement that allows amendment or correction of the Agreement by the parties.

THE PARTIES ACKNOWLEDGE THAT THE [Assignee/Licensee] HAS BEEN OPERATING A BUSINESS IN [country] PURSUANT TO THE PRINCIPLE AGREEMENT EXECUTED WITH THE [Assignor/Licensor]; ACCORDINGLY, THE PARTIES AGREE TO BE BOUND BY THE FOLLOWING PROVISIONS:

1. THE PARTIES AGREE THAT THE [Assignee’s/Licensee’s] OPERATIONS IN [country] WILL CONTINUE IN ACCORDANCE WITH THE PRINCIPLE AGREEMENT, BY WHICH THE [if assignment, ASSIGNOR HAS TRANSFERRED TO THE ASSIGNEE ALL RIGHTS, TITLE AND INTEREST IN or if license, LICENSOR HAS TRANSFERRED THE RIGHT TO USE WITHIN (country)] ANY OR ALL OF THE INTELLECTUAL PROPERTY SET FORTH IN EXHIBIT A TO THIS ADDENDUM (HEREINAFTER REFERRED TO AS THE INTELLECTUAL PROPERTY). THE PARTIES FURTHER ACKNOWLEDGE THAT THEY ARE BOUND BY THE TERMS AND CONDITIONS OF THE PRINCIPLE AGREEMENT.

2. [If assignment, THE ASSIGNOR ACKNOWLEDGES AND AGREES THAT IT HAS ASSIGNED TO THE ASSIGNEE ALL RIGHTS AND INTEREST, INCLUDING GOOD WILL, IN THE INTELLECTUAL PROPERTY PURSUANT TO THE PRINCIPLE AGREEMENT. ALL USES OF THE INTELLECTUAL PROPERTY IN (country) SHALL INURE TO THE BENEFIT OF ASSIGNEE or if license, THE LICENSEE ACKNOWLEDGES AND AGREES THAT IT HAS ACQUIRED NO RIGHTS WHATSOEVER, WHETHER BY USAGE OR OTHERWISE, OVER THE LICENSOR’S INTELLECTUAL PROPERTY OTHER THAN THE LICENSING RIGHTS GRANTED PURSUANT TO THE PRINCIPLE AGREEMENT. ALL USES OF THE LICENSOR’S INTELLECTUAL PROPERTY BY THE LICENSEE SHALL INURE TO THE BENEFIT OF LICENSOR.] 3. [If assignment, THE ASSIGNOR ACKNOWLEDGES THAT THE ASSIGNEE HOLDS EXCLUSIVE RIGHT, TITLE, AND INTEREST IN AND TO THE INTELLECTUAL PROPERTY, AND THE ASSIGNOR AGREES THAT IT SHALL NOT AT ANY TIME ACT OR CAUSE ANY ACTION CONTESTING, IMPAIRING, OR TENDING TO IMPAIR ANY PART OF THE ASSIGNEE’S RIGHT, TITLE AND INTEREST, or if license, THE LICENSEE ACKNOWLEDGES THAT THE LICENSOR HOLDS EXCLUSIVE RIGHT, TITLE, AND INTEREST IN AND TO THE LICENSOR’S INTELLECTUAL PROPERTY, AND THE LICENSEE AGREES THAT IT SHALL NOT AT ANY TIME ACT OR CAUSE

ANY ACTION CONTESTING, IMPAIRING, OR TENDING TO IMPAIR ANY PART OF THE LICENSOR’S RIGHT, TITLE AND INTEREST.] 4. [If assignment, THE ASSIGNOR SHALL NOT IN ANY MANNER REPRESENT THAT IT HAS ANY OWNERSHIP IN THE INTELLECTUAL PROPERTY, or if license THE LICENSEE SHALL NOT IN ANY MANNER REPRESENT THAT IT HAS ANY OWNERSHIP IN THE LICENSOR’S INTELLECTUAL PROPERTY OR REGISTRATION THEREOF.] 5. IN THE EVENT THAT THE PRINCIPLE AGREEMENT IS SET ASIDE OR OTHERWISE INVALIDATED FOR ANY REASON WHATSOEVER, THIS ADDENDUM SHALL TERMINATE AT THE SAME TIME, AND THE PARTIES SHALL COMPLY FULLY WITH THE TERMINATION PROVISIONS OF THE PRINCIPLE AGREEMENT.

6. THE [Assignor/Licensee] AGREES TO COMPLETE, SIGN, AND FILE ALL DOCUMENTS AND AGREEMENTS NECESSARY TO COMPLETE THE REGISTRATION OF THE PRINCIPLE AGREEMENT IN [country]. 7. [If license, include THE LICENSEE WARRANTS THAT IT HAS USED THE INTELLECTUAL PROPERTY ONLY WITHIN THE PROVISIONS OF THE PRINCIPLE AGREEMENT AND THAT IT HAS NOT APPLIED, REGISTERED, OR USED ANY INTELLECTUAL PROPERTY IDENTICAL OR SIMILAR TO THE INTELLECTUAL PROPERTY EXCEPT WITHIN THE PROVISIONS OF THE PRINCIPLE AGREEMENT. MOREOVER, THE LICENSEE WARRANTS THAT IT HAS NOT TAKEN ANY ACTION THAT WOULD OR MIGHT INVALIDATE OR DILUTE THE INTELLECTUAL PROPERTY REGISTRATIONS OR TITLE TO THE LICENSOR’S INTELLECTUAL PROPERTY.] 8. [If license, include THE LICENSEE DECLARES THAT ANY REGISTRATION OR USAGE OF THE INTELLECTUAL PROPERTY HAS NOT AND WILL NOT CREATE JOINT RIGHTS OF OWNERSHIP BETWEEN THE PARTIES IN THE INTELLECTUAL PROPERTY. THE LICENSEE HEREBY WAIVES ANY AND ALL CLAIMS THAT IT COULD ASSERT IN THE INTELLECTUAL PROPERTY OTHER THAN BASED ON ITS LICENSING RIGHTS GRANTED BY, AND EXERCISED IN COMPLIANCE WITH, THE PRINCIPLE AGREEMENT. THE LICENSEE WILL NOT ATTEMPT TO VARY OR CANCEL ANY REGISTRATIONS OF THE INTELLECTUAL PROPERTY IN (country) OR ANY OTHER COUNTRY, NOR ASSIST ANY OTHER PERSON OR ENTITY TO DO SO.] 9. [If assignment, include THE ASSIGNOR SHALL NOT ATTEMPT TO CAUSE THE PRINCIPAL AGREEMENT TO BE SET ASIDE OR OTHERWISE INVALIDATED MERELY ON THE GROUND THAT THE PRINCIPLE AGREEMENT HAS NOT BEEN RECORDED AGAINST THE INTELLECTUAL PROPERTY.] 10. ANY BREACH OR OTHER VIOLATION OF THIS ADDENDUM WILL RESULT IN IMMEDIATE TERMINATION OF THE ADDENDUM AND THE PRINCIPLE AGREEMENT, UNLESS THE BREACH OR VIOLATION IS WAIVED BY THE OTHER PARTY IN WRITING. THE PARTIES ACKNOWLEDGE THAT ANY BREACH OR OTHER VIOLATION OF THIS ADDENDUM WILL RESULT IN THE DILUTION OR DESTRUCTION OF VALUABLE RIGHTS IN THE INTELLECTUAL PROPERTY, REPUTATION, AND GOODWILL AND WILL CAUSE GREAT AND IRREPARABLE HARM TO THE OTHER PARTY. THESE DAMAGES WILL BE IMPRACTICAL OR IMPOSSIBLE TO MEASURE, AND THEREFORE MONETARY DAMAGES WILL NOT BE ADEQUATE COMPENSATION FOR THE HARM. THEREFORE, REGARDLESS OF WHETHER THE BREACH OR OTHER VIOLATION OCCURS BEFORE OR AFTER TERMINATION OF THIS ADDENDUM, THE [Assignor/Licensee] ACKNOWLEDGES THAT THE OTHER PARTY SHALL BE ENTITLED TO APPLY FOR AND RECEIVE FROM ANY COURT OF COMPETENT JURISDICTION A TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, AND/OR PERMANENT INJUNCTION WITHOUT HAVING TO PROVE DAMAGES OR POST ANY BOND OR OTHER SECURITY, AND THE [Assignor/Licensee] SHALL STIPULATE TO BEING

ENJOINED FROM FURTHER BREACH OR OTHER VIOLATION OF THIS ADDENDUM AND/OR FURTHER INFRINGEMENT OR IMPAIRMENT OF SUCH RIGHTS. THIS RELIEF SHALL BE IN ADDITION TO AND NOT IN SUBSTITUTION OF ANY OTHER REMEDIES AVAILABLE.

11. [If license, include THE LICENSEE WARRANTS THAT IT IS IN FULL COMPLIANCE WITH ALL LAWS GOVERNING TAXATION, LICENSING, IMMIGRATION, LABOR, AND BUSINESS OPERATIONS.] 12. TO THE EXTENT THAT PROVISIONS IN THE PRINCIPLE AGREEMENT CONFLICT WITH PROVISIONS IN THIS ADDENDUM, THE PROVISIONS IN THIS ADDENDUM ARE DEEMED TO BE CONTROLLING.

13. IF ANY MATERIAL PROVISION OF THIS ADDENDUM SHOULD BE HELD INVALID, VOID, OR OTHERWISE UNENFORCEABLE BY A COURT OF COMPETENT JURISDICTION, EITHER PARTY SHALL HAVE THE RIGHT TO TERMINATE THIS ADDENDUM IMMEDIATELY.

IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS ADDENDUM TO BE EXECUTED AS OF THE DAY AND YEAR FIRST WRITTEN AT THE BEGINNING OF THIS ADDENDUM.

ASSIGNOR/LICENSOR: [Company Name] BY: [signature] [typed name] [title]

ASSIGNEE/LICENSEE: [Company Name] BY: [signature] [typed name] [title]