Earlier this week I did the following tweet:
Hey IP people. Just saw this: "… all right, title and interest throughout the world in and to all such Intellectual Property rights shall vest solely in such Service Provider …." Aside from the other clutter, why "vest"? Why not just "the Service Provider will own all"?
— Ken Adams (@AdamsDrafting) December 5, 2018
It was prompted by my despair at the umpteen different ways people find to say the same thing. If you strip away the redundancy, your verb structures become much more manageable.
I thought I could do better than cry out into the Twitter wilderness, so I contacted my primary IP resource, Ned Barlas. That’s him to the right. (Ned was in the year below me at Penn Law Review, although I don’t think either of us would claim that our sterling characters were forged in the white-hot heat of Penn Law Review, or some such.)
Here’s what Ned had to say:
“The Service Provider will own …” means the same thing as “shall vest”. (of course, that shall fails the famous MSCD “has a duty” test; we know it really means will). Either way, it’s language of policy. But it falls short, as both formulations aren’t sufficient to give ownership to the party in question.
IP ownership is conferred under a contract in one of two ways: A contract can establish ownership rights through language of assignment (either present assignment using language of performance, as in Acme hereby assigns, or an obligation to assign) or because the contract otherwise meets specific requirements that result in a party owning the IP.
For example, a contract for specific services that meets the statutory requirements for a “work made for hire” agreement under U.S. copyright law will result in the hiring party being the owner and author of the work product (rather than the independent contractor who does the work), even absent words of assignment. If the same work were performed without the contract—or with a contract that doesn’t contain the magic words work made for hire, then the contractor would be the author and, absent an assignment, the owner of the copyright in the work product.
But the scenario in your tweet isn’t that kind of scenario, so instead we need a present assignment. Vest wouldn’t accomplish that, but neither would own. Instead, we need language of performance.
The moral of this story is one you know already, and I’m sure you would have remembered it if you had considered the language in its broader context—when you’re dealing with IP, everything is more complicated than it seems!
So I’m half right, in that we can dispense with vest. But in this game, half right gets you nowhere. Serves me right for looking at a few words in isolation. Excuse me, I now have to go flog myself with a wet noodle.
As a friendly amendment to the advice Ned Barlas gave you, the use of the magic words “work made for hire” (usually in the context of the phrase “will be deemed a work made for hire”) is effective only for one of the nine categories of contract specified in the Copyright Act as qualifying for WMFH status (a very, very limited universe, I might point out). In all other cases, you can forgo the magic words because, as the medicine man in Little Big Man might say, the magic won’t work. In those circumstances you have to rely on an assignment.
Agreed, Vance. I didn’t want to dig into the weeds of the requirements of a work made for hire agreement in my comment to Ken. My short-hand “for specific services” was intended as a vague reference to the statutory requirement that the services be for creating one of 9 specifically enumerated categories of work.
Since everyone seems to love the magic words, I’ve revised typical language to read “will be deemed to be” a WFH with the idea being that (1) the parties will be bound by that agreement to treat the property as a WFH even when the statutory requirements aren’t met and (2) the assignment language I add will do the real work. Is there a better alternative to adjusting the WFH language to try to achieve the desired result?
this is a useful and valuable post.
In general, any appropriate language of performance will suffice to transfer title to an existing thing from Alpha to Bravo: assign, convey, deed, give, grant, transfer, vest.
When the thing is an invention that doesn’t exist yet, and the provision is supposed to determine who owns the invention when it comes into existence, that probably requires language along these lines: ‘Title to any such invention will, immediately upon its invention, vest in Alpha, free of any claim of Bravo to any interest in it’.
I’m sure that formula could be improved, but what I’m shaky about is the category of contract language to which it belongs.
I suppose the ‘free of any claim of Bravo’ part is, and could be recast explicitly as, a kind of waiver, which falls into language of performance if memory serves, or maybe language of declaration (acknowledgment division), but the category of the part that says that Alpha will own the invention ab ovo puzzles me.
If France and China agree by a two-power treaty that any new Pacific islands that volcanic action creates will belong to France and not China, perhaps the key ‘will belong’ language must be a conditional waiver of rights?
Or is the best conceptualization a present grant of potential future rights?
Sorry to use a non-IP example, but my IP knowledge is a tiny riddle inside a still smaller mystery, wrapped in a truly exiguous enigma.
What’s the right category, Ken?