Meaning
A specific contractual phrasing instantly transfers future intellectual property rights at the moment of creation. The present assignment clause uses the phrase hereby assigns to effect an immediate transfer of rights. This is distinct from a promise to assign in the future, which does not automatically transfer ownership when the invention is made.
It ensures that the corporate entity holds title to the technology from the moment of inception.
Language Discrepancy
Using the correct phrasing is critical because the difference between hereby assigns and agree to assign is significant in court. If the agreement uses the latter phrase, the transfer is not automatic, leaving the startup vulnerable to competing claims. This makes the wording of invention assignments a high-priority detail for startup lawyers.
Precedent Case
Federal circuit court decisions have confirmed that a promise to assign allows inventors to transfer the same rights to a third party. If a founder signs an agreement to assign and later sells the rights to another company, the second transaction may take precedence. This risk is entirely eliminated by using a present assignment clause.
Risk Mitigation
Reviewing employee agreements for this specific phrasing is an essential task for venture capital lawyers. During due diligence, they will check the language of all invention assignments to ensure they use present-tense verbs. This protects the investor’s equity by ensuring the startup’s patents are secure.
