Assigning Product Designs and Tooling to the Entity Not the Founder
Assigning CAD files and physical tooling directly to the corporate entity at legal incorporation eliminates co-founder title disputes and secures unencumbered assets.
Present Assignment Language
Meaning
Specific phrasing in an employment or consulting agreement effects the immediate transfer of ownership of intellectual property the moment it is created. This present assignment language uses the words hereby assigns rather than a promise to assign in the future. It ensures that the employer gains legal title to inventions and designs automatically, without the need for a second document to be signed after the work is completed.
Legal Precedent
Decisions by high courts have highlighted the importance of this distinction in determining the ownership of patents. If an agreement only states that an employee will assign their rights, the ownership stays with the individual until a formal transfer occurs. Using present assignment language prevents the inventor from transferring the same rights to a third party before the employer can record their interest.
Security and Finance
Investors and acquirers look for this specific wording during the due diligence process to confirm that the company actually owns its core technology. The absence of present assignment language can create a significant cloud on the title of a patent portfolio. This risk can lead to a reduction in the valuation of the firm or even the cancellation of an investment round.
A failure to include these words may necessitate the execution of confirmatory assignments from every current and former employee.
Drafting Standard
Modern templates for technology companies include these phrases as a requirement for all staff and contractors. By making the transfer automatic upon creation, the firm avoids the administrative burden of chasing former employees for signatures years later. This practice provides a clear and uninterrupted chain of title for every piece of code and every mechanical design produced for the business.