Understanding the significant differences between assignments and licenses can help you decide whether to assign or license technology.

What is the difference between an assignment and a license?

Is it better to license or assign rights?

It depends upon the owner's financial goals and the desire to control use of the technology, competition and the market. The owner of a copyright, trade secret or patent may assign or sell all rights in the technology. Alternatively, the owner of the mark may license specific, limited rights to one or more licensees.

What are the key elements when considering whether to assign or license technology?

Generally, licensing allows an owner to dictate the terms of the technology's use (for access to distribution and support resources, and to maintain product synergies), its market penetration and use by competitors. Licensing usually involves future revenue streams in the form of royalty payments, as well as ongoing obligations of the owner to police the use and integrity of the technology.

Conversely, assignments generally transfer complete ownership of the technology, including all rights and responsibilities, for a one-time payment to the owner. As a result, the owner loses the ability to control the assigned technology's use, its brand recognition, as well as his or her contact with customers.

Must an assignment or license be in writing?

That depends on the nature of the rights at issue and whether the technology is subject to an assignment or a license. For example, a transfer of copyright ownership is generally not valid unless it is in writing and signed by the owner of the rights conveyed. Also, absent a written assignment-of-invention clause in an employment contract for technical employees, an employer has limited or no rights to the technology developed by its employees.