No Payment for Assignment

Dear Rich: I assigned my copyright for a software app and was supposed to receive half the money up front and the other half within six weeks.  It's been four months and all I get from the company are promises. Can I revoke the assignment and assign it somewhere else? That depends on the agreement, as well as the state law that is used to interpret it. We think you're in a tough spot because revoking assignments requires dealing with issues like those raised in this recent Dear Rich response.
As a General Rule Dept. Signing an assignment for the “promise” of future payments always involves a risk. We used to have a client whose golden rules were, "Get as much as you can before signing the deal," and "Don't give any money back." One reason to get the money upfront is that if the assignee (the person who owes you the money) fails to pay you, you may be trapped in dispute resolution, fighting to get your copyright back. If the assignee insists on a series of payments, there are several solutions, such as establishing an escrow account, transferring partial assignments per payment, or setting up a license agreement that allows for ownership transfer after the final payment. This is a situation where you should consider contacting an attorney (and we hope your assignment agreement has an attorney fees provision).

Should Spouse Sign Invention Assignment?

Dear Rich: I am working with a co-inventor and we're getting ready to assign our patent rights to a company that we created (incorporated in California). The co-inventor is married and so am I. Do we need to have our spouses to sign the assignment as well? Congratulations on doing the right thing -- that is creating an entity and transferring your patent rights to it. Many people proceed informally and fail to properly assign their rights. Don't forget to record your assignments with the USPTO.
Right you had a question. Legal title to an invention is a matter of state law, not federal law. In California, if you filed your patent at the time you were married, a court will presume that your spouse shares an undivided half of your interest (that is, your spouse is co-owner of legal title to the patent). That rule was confirmed in a recent case. To avoid confusion and to be assured that your assign­ment is complete (and your spouse will not later dispute the assignment), you should include a provision in your assignment similar to the one below. This provision protects the assignee (person acquiring the rights to the invention) from later being sued by the spouse of the inventor.  When used in assignments, it usually appears below the signature line for the inventor. (BTW, this provision is not required in license agreements.)
Sample Provision for Spousal Assignment

I am the spouse of Assignor and I acknowledge that I have read and understand this Assignment agreement. I am aware that my spouse agrees to assign his/her interest in the Invention, including any community property interest or other equitable property interest that I may have in it. I consent to the assignment and agree that my interest, if any, in the Invention is subject to the provisions of this Agreement. I will take no action to hinder the Agreement or the underlying assignment of rights.

Spouse’s signature

Assigned RIghts to Employer; Now Wants Them Back

Dear Rich: I did contractor work for a software company and assigned them rights to a program I created back in 2004. In return I got royalty payments for a while and now the company has stopped marketing the software. Is there a way for me to get the rights back to the software without causing a big problem? Okay, we're imagining the two guys shaking hands in the photo are you and your employer after reaching some kind of solution (the guy in the blue shirt is from the Dear Rich Staff). We hope this isn't just wishful thinking on our part because assignments are permanent transfers of ownership and few companies are inclined to return rights after they've paid for them (Just ask Simon & Schuster). We're also not clear what type of assignment you made (you can review the various types here). Three possible ways of getting the rights back include:

• The company gives the rights back voluntarily. If you are still on good terms with the company, it's possible they may work something out with you. They may even allow you to exploit the software in return for a cut of your profits. Or perhaps they'll simply sell it back at a reduced price. You won't know until you ask. And whatever you agree upon, get it in writing, of course.
• The agreement you signed provides for some method of reversion.  Occasionally, an assignment provides for reversion of rights. This is rare because assignments, by their nature, are permanent transfers. But occasionally, a patent or a copyright assignment permits the assignor to re-acquire rights if certain conditions are met -- for example, the assignee stops exploiting the work, or the assignor buys it back for an agreed-upon fee. In any case, you should review the agreement in case it does include a reversion provision. (By the way, there may be confusing tax implications if an assignor reclaims rights after categorizing the assignment payment as capital gains and not as ordinary income.)
• The employer breached the assignment agreement and you can use that breach as the basis for terminating the assignment. We're not sure if you're ready for this approach as it usually involves litigation, but if you can prove a material breach of the assignment agreement,  the rights may be re-assigned to you. You're most likely to achieve this outcome if you can demonstrate that the company induced you to enter the agreement based on fraud. You may also be able to argue that the company materially breached the agreement and failed to cure the breach -- for example, never paid royalties or provided accountings. But this is a tough strategy to implement because a court faced with a failure to pay royalties may allow the company to retain the ownership, provided that damages are paid to the assignor (you).

Keep in mind that if you do get the rights back, you'll also need the cooperation of the company in registering the assignment (whether it is copyright or patent rights) and in transferring rights back to you. 

What's a Reasonable Assignment Provision?

Dear Rich: The other day you criticized a contract clause that a developer sent you because the clause claimed rights to the developer's own software tools. Can you give an example of a clause that wouldn't do that? We usually don't like it when someone responds to a question by saying "Good question." It seems gratuitous and a bit of a stalling tactic, doesn't it? It reminds us of our grandfather (left) who could hear okay but whenever you asked him a hard question, he made you repeat it so that he would have more time to answer.
Right, you had a question.  Flakasoft, one of our favorite app developers, responded to our recent work-for-hire entry and sent us a contract they had just received. It included the following provision.

Ownership of Inventions. To the extent that, in the course of providing the Services, Consultant jointly or solely conceives, develops, or reduces to practice any inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws (collectively, “Company Inventions”), Consultant hereby assigns all rights, titles and interest to such Company Inventions to the Company. “Company Inventions” shall not include any software, owned or developed by, or licensed to Consultant, or methodologies, techniques, software libraries, tools, algorithms, materials, products, ideas, designs, and know-how (including all copies, enhancements, modifications, revisions, and derivative works of any of the foregoing) that existed prior to the date hereof or are acquired by Consultant from a third party thereafter or developed independently and outside the scope of this Agreement.

It's possible to draft a more specific or more favorable clause for protecting developer tools but this will give you a basic idea of what could work in terms of turf protection and fairness. And thanks for the good question!