Assignment of intellectual property

How BC law treats it

There is no 'Intellectual Property Act'. Each type of IP has its own federal statute. Under the Copyright Act, RSC 1985, c C-42, an assignment is valid only if it is in writing signed by the owner (s. 13(4)), and an unregistered assignment can be defeated by a later assignee for value without notice who registers first (s. 57(3)). Moral rights cannot be assigned, but the author can waive them (s. 14.1). Patents and patent applications are transferable under s. 49 of the Patent Act, RSC 1985, c P-4, and a transfer that is not recorded with CIPO is void against a later transferee whose transfer is recorded (s. 49(4)), so patent assignments should be made in writing and recorded promptly. Trademarks are transferable and the Registrar registers the transfer of a registered trademark on request under the Trademarks Act, RSC 1985, c T-13, s. 48. Industrial designs are transferable under the Industrial Design Act, RSC 1985, c I-9, s. 13, and an unregistered transfer of a registered design is void against a later transferee who registers. Trade secrets, know-how and confidential information are not property under a statute. They are transferred by contract, together with confidentiality obligations, and protected by the law of breach of confidence. Domain names are transferred under the registrar's procedures and the registry's rules, and website content is assigned as copyright. For startups, ownership often turns on who created the work. Copyright in work made by an employee in the course of employment generally belongs to the employer, but work by founders before incorporation and by independent contractors belongs to them unless they assign it in writing. Investors and buyers check for signed IP assignments from every founder, employee and contractor who contributed to the product.

What it means for your business

A startup that cannot prove it owns its code, brand and designs will struggle to raise money or sell. Missing assignments from a departed co-founder or an overseas contractor are among the most common due diligence problems and can be costly to fix later. Founders should sign IP assignment agreements at incorporation, contractors should assign before they are paid, and registered rights should be recorded with CIPO promptly after any transfer. Example: Before a seed round, a Vancouver app startup discovers that a freelance developer wrote its core code without a written assignment. The company negotiates a signed copyright assignment and moral rights waiver from the developer so that investors can close.

Risks and common mistakes

Assuming the company owns code written by contractors or by founders before incorporation without a written assignment. Relying on an email or verbal agreement, when copyright assignments must be in writing signed by the owner. Failing to record patent and trademark assignments with CIPO after closing. Forgetting to obtain moral rights waivers, since moral rights cannot be assigned. Transferring trade secrets without confidentiality obligations that keep them secret.