Applicable Form TM P
Assignment - selling your IP
An assignment is an outright sale of your IP in which you transfer your ownership to another person. This can be a viable business strategy if you prefer to receive a substantial up-front lump-sum payment instead of smaller royalty payments throughout the commercialisation period.
When you transfer your IP ownership, you cannot impose any performance obligations on the new owner. This is different to licensing.
The lump-sum payment for an assignment should be regarded as a purchase price. You should factor into the purchase price:
• all costs including direct and indirect costs of research and development, materials, any outsourcing and the cost of protecting the IP
• a profit component
• the potential market value of the technology or IP.
The person purchasing your IP may want to pay royalties instead of a lump sum. This way, the purchaser's initial capital outlay is less and the royalty payment for the IP becomes conditional on the IP product being successful in the market place. In this case, if there is no success there is no payment.
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