Assignment of royalties

An assignment of royalties is the transfer of the right to receive future royalty payments, for example under a patent, trademark, copyright or resource licence, in exchange for a lump sum or other consideration. The assignor usually keeps the underlying intellectual property and the licence relationship, while the assignee receives the payment stream.

How BC law treats it

In BC, an assignment of royalties is an assignment of a contractual right to payment. A legal assignment must be in writing signed by the assignor with written notice to the payor (Law and Equity Act, RSBC 1996, c 253, s. 36), and the licence should be checked for any restriction on assignment.

What it means for your business

Selling a royalty stream can raise capital without selling the underlying asset, but the tax treatment of the lump sum should be reviewed with an accountant.

Risks and common mistakes

If the licence terminates or the licensee defaults, the royalty stream may end, so the assignee should negotiate protection against those events.

For the full explanation, see our entry on Assignment of contract.

General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.