There are certain kinds of documents that are used in IP practice, but which do not seem to have any clear statutory basis. One of the most notable examples is the so-called confirmatory assignment. For readers who may not be familiar with a confirmatory assignment, it is a form of document whereby the parties refer to the “confirmation” of an unwritten assignment of IP rights that purportedly took place at some prior point in time. For example, due diligence of a proposed transaction may disclose that the patent rights claimed by the target were obtained by assignment, but no written evidence can be adduced to evidence the transaction. As a result, the target sometimes undertakes to provide a document that will “confirm” the assignment as a condition to be fulfilled before the closing of the transaction. Other examples are the situation where the assignment contains sensitive financial or other information that the parties do not want to reduce to writing, or where the assignment is provided for by law, such as in the employer-employee relationship.
What is the legal significance of such a confirmation? When it comes to an assignment, all IP practitioners know that it is grounded in the law of the particular IP right involved and that it provides for the transfer of ownership of the IP right from the assignor to the assignee. While courts may sometimes be called up to rule on various aspects of such an assignment, the underlying contours of the relationship are common ground. Not so regarding a confirmatory assignment. There does not appear to be reference to a confirmatory assignment in any of the relevant international IP treaties or arrangements nor do any local statutes make mention.
Despite this absence of any clear statutory basis, and recognizing that practitioners nevertheless make use of a confirmatory assignment in various settings, questions abound regarding this form of document. Among the most salient unresolved issues are the following:
1. What is meant by “confirmation” of an unwritten assignment of IP rights?
2. In particular, does the confirmatory assignment have the effect of ratifying the transfer of an IP right that took place some point of time prior to the execution date of the confirmatory assignment?
3. If so--
a. Under the relevant national IP and contract law, and the law of equity, if appropriate, to what extent and under what circumstances can an unwritten agreement validly assign IP rights?
b. Assuming that an unwritten assignment may be valid, what evidentiary showing is required?
c. Can one record an unwritten assignment on the appropriate IP registry, such as the patent or trademark registry?
4. If the confirmatory assignment does not serve to ratify the earlier unwritten assignment of the IP right, can it serve as evidence of the transfer of rights effective as of its execution date?
Given all the uncertainty about the validity of a confirmatory assignment, the best advice is simply to do whatever is required to ensure that a written assignment is put in place at the time of the transfer. If not, as once expressed to me by a prominent practitioner in the area of IP commercial transactions, beware—“no one should believe that the law will come to their rescue.”