Licence vs Assignment of IP
Last updated: February 2025
Quick Comparison
| Aspect | Licence | Assignment |
|---|---|---|
| Ownership | Remains with the licensor | Transfers to the assignee |
| Duration | Typically time-limited per the agreement | Permanent unless conditions apply |
| Revenue model | Ongoing royalties or licence fees | Usually a one-off payment |
| Control | Licensor retains control over how IP is used | Assignee has full control |
| Formality | Can be informal for some IP types | Must be in writing and signed under UK law for key IP rights |
What Is a Licence?
A permission granted by the IP owner allowing another party to use the intellectual property under specified conditions, while ownership remains with the licensor.
Key Features
- • Ownership stays with the licensor
- • Can be exclusive, sole, or non-exclusive
- • Typically time-limited and subject to conditions
- • Licensor can grant multiple licences to different parties
Best For
- • Generating recurring revenue from IP without losing ownership
- • Allowing partners or distributors to use your brand
- • Software distribution and SaaS models
What Is a Assignment?
A transfer of ownership of intellectual property from one party (assignor) to another (assignee), giving the assignee full rights to the IP.
Key Features
- • Full ownership transfers to the assignee
- • Must be in writing and signed for copyright, patents, and trademarks
- • Assignee gains all rights to exploit, license, and enforce
- • Can be partial (e.g., for a specific territory or field of use)
Best For
- • Selling IP outright for a lump sum
- • Transferring IP created by contractors or employees to the business
- • M&A transactions where IP needs to change hands
When to Use a Licence
Use a licence when you want to retain ownership of your IP and generate ongoing income. This is ideal for software, brands, patents, and creative works where you want to control how the IP is used.
When to Use a Assignment
Use an assignment when you want to transfer full ownership permanently. This is common when a business acquires IP from a contractor, in M&A deals, or when monetising IP that is no longer core to your business.
Which Does Your Business Need?
If you want ongoing control and recurring revenue, licence your IP. If you want a clean transfer of ownership, assign it. In contractor relationships, always include a clear IP assignment clause to ensure the business owns what it has paid for.
FAQ
Does IP created by a contractor automatically belong to the hiring business?
No. Under UK law, the default position is that the creator owns the IP they create, even if paid to create it. Only employees create IP that automatically belongs to the employer (for copyright and patents made in the course of employment). For contractors, you need an express written assignment.
What is the difference between an exclusive licence and an assignment?
An exclusive licence gives the licensee sole rights to use the IP (even excluding the owner) but ownership remains with the licensor. An assignment transfers ownership entirely. An exclusive licensee under UK law can sue for infringement in their own name.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Consult a solicitor for complex matters.
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