What happens to intellectual property after incorporation?


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If two people are working together on a project, and create things like logos, brands, etc, and then at a later point they incorporate the business, what happens to the intellectual property?

Would the rights of the logo, for example, be automatically transferred to the corporation, or would the rights remain with the person that originally created it?

What about work done after incorporation? I assume that work belongs to the corporation?

Incorporation Intellectual Property

asked Nov 24 '13 at 07:09
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Sherwin Flight
104 points

1 Answer


-1

Would the rights of the logo, for example, be automatically
transferred to the corporation, or would the rights remain with the
person that originally created it?

Nothing is transferred automatically. Usually, what is happening is that the founders assign (actively, as part of the incorporation process) all the IP relevant to the company.

What about work done after incorporation? I assume that work belongs
to the corporation?

That should be explicitly mentioned in the employment contract, so that the corporation would retain the IP created by its employers. Nothing is happening automatically.

These are all legal issues which may become very hard to solve if not addressed properly from the start. You may end up having an individual owning this piece of IP, another owning that piece of IP, and both "blackmailing" you for licensing fees or share of profits - all just because you didn't put the right sentence in the right agreement.

Please do yourself a favor and have a lawyer with experience in startups' incorporating draft all the relevant papers for you. Don't do it yourself, not worth the money saved.

answered Nov 24 '13 at 09:58
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Littleadv
5,090 points
  • So even something like a logo, wouldn't be transferred automatically? Not sure there is ever a case where it would make sense for a partner to retain the rights to something like this after incorporation. – Sherwin Flight 6 years ago
  • @SherwinFlight as an insurance for the future? No, nothing is transferred automatically. Not a single thing. – Littleadv 6 years ago
  • My original question was a very simplified version of a legal matter that will be heading to court in the near future. I was just interested to see what others thought. (FYI, this is not a legal issue of mine, just someone I know. This question was more out of curiosity.) – Sherwin Flight 6 years ago
  • @SherwinFlight simplifying usually omits things and thus changes the context. I'm sure that the legal issue is more complicated than your question and thus the answer would also be more complex. I'm not sure if it was you who downvoted or not, but I definitely don't appreciate dowvnotes without explanation. – Littleadv 6 years ago

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Incorporation Intellectual Property