When undergoing a business change which requires the transfer of intellectual property rights (IPR), a key question to consider is whether such changes should be made at once or gradually. Although there are many perceived advantages of each approach, upon a perusal of these, the best approach is often deciding to complete the transfers at the same time.
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Transferring Intellectual Property Rights Gradually
Regardless of the reason for the alteration to IP records, many company stakeholders instinctively prefer the idea of transferring intellectual property rights gradually over time. Generally, the rationale for such a method is that the transfer changes can be filed whenever necessary or along with renewals, so as to save on both time and money.
Advantages
The key perceived advantage of such piecemeal transfers is that there is no immediate need to secure funding for a large-scale project, as each transfer, and approving the funding for such, can be dealt with when the need arises. This rationale speaks particularly to small-scale companies, who would possibly struggle to fund a transfer project in one go.
In addition, another perceived reason that many may prefer the piecemeal route is that undertaking a project to transfer all relevant IPR at the same time appears daunting, whilst transferring gradually is ostensibly a much easier task.
Disadvantages
However, contrary to these perceptions, undertaking transfers on a gradual basis is often costlier than securing the funding to complete them at once.
Indeed, where a company hires external agents to handle these changes, unlike with a project where fixed fees can be agreed at the outset, if the transfers are made gradually over time these agent fees will likely increase. Furthermore, hiring for a project may also lead to negotiations and deals being struck regarding agent fees, resulting in potentially lower costs, something which is not likely with piecemeal transfers.
In addition to the potential increase in costs, these piecemeal transfers may also interfere with the enforcement of IP rights. As property rights relate to their owners, an IPR which is incorrectly recorded as belonging to the wrong owner will potentially encounter great difficulty in enforcing its protection. Beyond this, incorrectly registered ownership details can also jeopardise license or royalty agreements, as well as encountering potential difficulties at customs.
As well as causing problems with existing IPR, this gradual route can also hinder the process of filing for new applications and even renewals of existing ones. Therefore, in addition to potentially being costlier, this gradual route invariably creates more work to complete.
Transferring Intellectual Property Rights Simultaneously
Transferring IP rights simultaneously as a project may ostensibly seem like a more daunting task, but making the effort to undertake this project has many advantages over the gradual route.
Advantages
The most notable advantage of transferring IPR simultaneously is that it does not fall prey to the same disadvantages of the gradual method. Indeed, as previously mentioned, making all transfers at the same time is often cheaper than making gradual changes, and is less likely to interfere with the usual exploitation of the associated rights.
As well as this, however, the key advantage of this method over the gradual route is that undertaking all transfers at once simply deals with the issue once and for all. Completing all necessary IP rights transfers at once at the required time means that no more heed has to be paid to the issue – the company will be content in the knowledge that the IPR has been transferred and no more need be done.
Furthermore, completing these transfers at once results in a much cleaner and more organised IP portfolio than individual transfers would.
Disadvantages
Despite these many advantages, it must be conceded that there are some difficulties with such a method. Namely, as previously mentioned, a key issue is the potentially large budget which would need to be agreed at the outset. For many smaller companies, approving the funding to undertake these transfers at the same time is unlikely.
Another, potential barrier to transferring intellectual property rights at the same time is that it seems like a daunting task requiring the investment of a lot of work. However, it must be borne in mind that, although a one-off transfer may seem like it requires more work than gradual transfers, this organisation at the outset will free the company from any later difficulties and potential additional costs.
