The two pillars of a deed to transfer or pledge intellectual property rights - IP - are: Just do it and do what you need to do. The general rule of several national laws is that a deed is required to transfer ownership of an IP right – like a trademark, copyright, or patent – or to create a financial security right – like a pledge or a lien – on IP rights.
What is a deed? The purpose of a deed is to provide evidence. A deed provides evidence of the transfer of IP rights or proves that a pledge or lien on an IP right was created. In addition to being a piece of evidence, a deed is – under several national laws, like the laws of The Netherlands – also necessary for a valid transfer of an IP right or the valid creation of a pledge or lien on an IP right, because without a deed, an IP right cannot be transferred or pledged under these national laws. A deed is a signed written document. However, for instance under Dutch law, a deed can also be made and executed in electronic form.
What should the deed include? The deed must provide that the IP rights are transferred or assigned from A to B or that a security right on these rights is actually granted by A to B. If the deed does not make that clear, these rights are not transferred or the pledge or lien is not created. National law, like the laws of The Netherlands, may also require for a valid transfer or pledge, that there is a legal obligation to transfer or to grant a pledge or lien. Even though such an obligation does not have to be agreed in writing, evidence will be required, if that obligation might be disputed. Therefore, it is also the sensible thing to do to include that obligation in the deed as well, so that evidence of the existence of the required obligation will be available.
What can go wrong? A mistake that is often made is that the deed does contain the obligation to transfer or to pledge but fails to actually transfer the rights or to actually create the pledge. Consequently, the legal acts that needed to be done, have not been done and the result is that the transfer or pledge has not happened.
What should the deed contain? The deed must provide that A transfers or assigns to B or that A grants a security right, like a pledge or lien, to B.
What more can be in the deed? Preferably, the deed also provides evidence of the existence of a legal obligation to transfer or to pledge. For that purpose, the following language can be used: A shall transfer to B and hereby transfers to B, who hereby accepts this transfer, … or A shall pledge to B and hereby pledges to B, who hereby accepts this pledge, …
Who needs to sign? The signature of transferor A or pledgor A – the proprietor of the IP rights – is required. Without that signature nothing has happened and nothing is proven. Some laws, like the Dutch Patent Act, also require the signature of transferee B or pledgee B, the party to whom the rights are transferred or pledged. That signature of party B is also needed if the deed is to serve as evidence of the existence of the obligation to transfer or pledge. Practically speaking, both A and B should therefore sign the deed.
What else must be in the deed? The IP rights concerned should be identified in the deed, so that it is clear which IP rights must be transferred or pledged and which IP rights have been transferred or pledged. The deed also has to clearly identify who the parties are, and which persons sign the deed on behalf of the parties as their representatives.
Who feels the pain? When a deed does not meet the requirements for a valid transfer of IP rights or a valid pledge or lien on IP rights, it is the buyer or the lender who is left empty handed. Seeking advice is therefore the prudent thing to do for any buyer of IP rights or any lender accepting IP rights as collateral.