Assignment agreement
Article 1234 of the Russian Federation Civil Code regulates the terms for agreements on alienation of the exclusive right to the result of intellectual activities or means of individualization, when one party (a right holder) assigns or undertakes to assign its exclusive right to another party (an assignee) in full.
As the right holder acts a person, who possesses an exclusive right. Initially, the author has this exclusive right; however it can transfer to other persons by act of law or agreements. In certain cases several persons can posses the exclusive right to the result of intellectual activities or means of individualization, there is multiplicity of persons as the right holder when concluding an agreement to the respect of such item.
With the Article 1234 of the Russian Federation Civil Code this standard the legislator introduces the type of an agreement, applicable for the majority of intellectual property items, excluding company names, protected designations of origin, business names, collective trademark.
The alienation agreement is consensual, i.e. it is considered to be concluded, if the parties have come to an agreement on the_essential terms thereof in writing.
If the transfer of exclusive rights based on assignment agreement is not subject to mandatory state registration (e.g. transfer of rights based on agreement on alienation of copyright), it takes effect from the date of its conclusion. If the transfer of exclusive rights based on assignment agreement is subject to state registration (e.g. transfer of rights based on agreement on alienation of trademark rights) the exclusive right transfers to the assignee at the moment of state registration thereof.
The agreement contents are known asterms or clauses. Essential termsare those which are necessaryand sufficientfor the agreement conclusion. If the agreement_has not been reached on the essential terms thereof, the agreement is considered as unconcluded. The essential term of the agreementon alienation of the exclusive right is its subject matter, which shall be maximally defined by way of indication of the intellectual property right, the number of state registration, and the registration date.
If the agreement does not specify that it is without compensation, the amount of compensation is the essential term of the agreement on alienation of the exclusive right. Subject to part 2 paragraph 3 article 1234 of the Russian Federation Civil Code, if the agreement on alienation of the exclusive right concluded on a compensation basis does not comprise a clause concerning the amount of fee or procedure for its determining, such agreement shall be deemed unconcluded. Sometimes the parties decide to keep the financial terms of the agreement in a secret and specify in the agreement the presence of special supplementary agreement, which identifies the financial terms. However, considering that the transfer of rights under the agreement, which is subject to the state registration, is deemed invalid without registration, in case of litigation, the court shall be entitled to ignore the supplementary financial agreement, which is not registered in accordance with the established procedure, and proclaim the agreement unconcluded due to absence of the specific essential term.
The agreement on alienation of the exclusive right shall be concluded in written form. If it is an agreement on alienation of the exclusive right concerning inventions, utility models, industrial models, trademarks, transfer of rights under the agreement is subject to state registration. The legal consequence of non-compliance of the written form of the agreement and requirements of state registration of transfer of rights is its invalidity of the agreement.
The right holder may entitle the right to exercise the exclusive right to the third party, i.e. either by concluding license agreements or concluding the pledge agreement of the exclusive right. The right holder shall be entitled to conclude the agreement on alienation of the exclusive right, burdened with license agreements. In case of transfer of the right under the agreement on alienation of the exclusive right license agreements remain valid (paragraph 7, article 1235). In the event of the conclusion of the agreement on alienation of the exclusive right, burdened with license contract, there is no need in the licensee’s consent. Subject to paragraph 7 article 1235 the transfer of the exclusive right is not a cause for alteration or termination of the license agreement, concluded by the preceding right holder. However the right holder shall inform the licensee about the right alienation.
If the right holder concludes the agreement on alienation, burdened with pledge of the exclusive right, without pledgee’s consent, pursuant to article 168 of the Russian Federation Civil Code the agreement on alienation shall be proclaimed invalid, therefore the consequences of the agreement invalidity shall be applied.
Paragraph 5 article 1234 of the Code provides the consequences if the assignee fails to pay a compensation. If the right was transferred to the assignee under the agreement, the previous right holder, when his/her right for compensation was significantly violated, shall be entitled to claim in court that the rights of the assignee of the exclusive right be assigned to the previous right holder and also a payment of damages.
If the exclusive right has not been transferred to the assignee then, if he/she has failed to execute his/her duty to pay within the term set by the agreement a compensation for the acquisition of the exclusive right the right holder may waive the contract unilaterally and claim a payment of damages due to the agreement rescission.
