Structuring Present Assignment Clauses and Power of Attorney in Hardware PIIA Agreements
Present assignment clauses and irrevocable powers of attorney in hardware PIIAs secure immediate IP ownership and enable unilateral patent filings.
Executory Promise
Meaning
Contractual obligation where the performance or the transfer of an interest is scheduled to occur at a future time. An executory promise exists when a founder agrees to assign future inventions to a company but has not yet created the technology. The legal weight of this commitment depends on the specific language used in the agreement.
It represents a potential right rather than a completed transfer.
Contractual Obligation
A signed agreement containing an executory promise creates a binding duty for the parties to act when the specified conditions are met. If a developer creates a new software tool, the prior commitment to assign that tool becomes an active obligation. The courts generally enforce these promises if they are supported by adequate consideration.
This structure allows companies to secure rights to work that has not yet begun.
Assignment Trigger
The moment an invention is conceived, an executory promise provides the legal basis for the company to claim ownership. However, the company may still need to execute a separate assignment document to perfect its title. This secondary step confirms that the future interest has become a present reality.
Investors look for these triggers to ensure the company can actually capture the value of its research.
Future Interest
Holding an executory promise gives an entity a claim over assets that do not yet exist. This interest is speculative until the moment of creation. If the promisor leaves the company before inventing anything, the promise remains unfulfilled.
The value of the asset is realized only when the development phase is successfully completed.