From my IP perspective, there are two kinds of contract categories that I encounter in provding transaction support. The first is your basic, non-IP focused contract, such as a share purchase agreement, in which an IP person may be called in to give advice on specific sections, most typically IP representations and warranties. The second is to provide IP-related documents that support the main agreement, most frequently in the form of assignment of IP rights.
But sometimes these two contact categories overlap in a way that creates contractual uncertainty. Perhaps the most recurrent example involves an IP assignment document that is attached as an exhibit to the main agreement which provides for an assignment of IP rights. The main agreement may provide something like this: "The Seller undertakes to assign and does hereby assign the IP Rights". Let's assume that "IP Rights" is a defined term that itself is defined something like the following--"IP Rights shall mean all Patent, Copyright, Trademarks and Know-How, as those terms are defined in the contract."
Now comes my question (actually, questions). What is the legal force of such a clause? Does it merely constitute an undertaking to assign the IP rights whereby, despite the declaration--"and does hereby assign", no actual assignment is effected? Or does the provision constitute both an undertaking to assign and, in addition, the actual assignment of such IP rights?
If the first alternative is the case, then the provision is either legally ineffective as an assignment of IP rights or, at best, it constitutes an equitable assignment in those jursdictions that recognize equitable rights in property. At stake is the validity of the purported assignment of IP rights. If the second alternative is the better position, then there still remains the evidentiary question of what IP rights have been assigned.
One way to solve this problem is to provide an exhibit to each of the defined IP Rights that describes with particularity the IP rights of the assignor that are being assigned. But it is not always the case that the definitions provide such specification of IP rights. Instead, the agreement goes on to provide that the parties will execute the attached form of IP assignment and transfer document.
In that event, unless a fully executed IP assignment document is attached to the main agreement, the attachment of a mere form of IP assignment would seem to have the legal effect of rendering the assignment clause in the main agreement--"The Seller undertakes to assign and does hereby assign the IP Rights", solely an undertaking to assign the IP rights, irrespective of the language that purports to assign these IP rights. Or maybe not. Perhaps the legal effect of the form of IP assignment in such a situation is merely evidentiary, such that the main agreement does constitutes a valid assigmnment of IP rights. Or maybe not.
The best way to handle this is to provide only for the undertaking of the assignment in the main agreement, subject to the execution of the assignment document pursuant to an attached form of assignment. In that case, however, care needs to be taken with respect to the IP assignment document so that it is consistent with the main agreement. In particular, the IP assignment document can incorporate by reference from the main agreement all the relevant definitions. However, not infrequently, the assignment document is based on whatever is the form assignment used by the attorneys involved (usually the assignor's attorneys) and care is not always taken to make the assignment conform with the provisions of the main agreement. In such a situation, the subject-matter of the IP assignment may not be consistent with the IP provisions of the main agreement.
It is roughly at this point that the transaction and IP lawyers go, hand in hand, to their litigation partner down the corridor for urgent advice.