What's inside a founder IP assignment agreement

If you're incorporating and have already built something, such as a prototype, a design, or a domain, your formation documents will include an IP assignment that transfers that work to the company. It is usually a few pages long and often signed alongside a stack of other documents, so founders rarely read it closely. It is also one of the first documents investors' counsel asks for, because it is what shows the company owns its core technology.

A founder IP assignment agreement, often called a technology assignment agreement, transfers to the company everything a founder created for the business before incorporation. It identifies the parties and what the founder receives in return, defines the assigned technology broadly and lists specific items in an exhibit, assigns all rights in that technology using present-tense language, requires the founder to sign any further documents needed to complete the transfer, and includes the founder's statements that they own what they are assigning. It sits alongside two other documents: the restricted stock purchase agreement, where the IP may count toward the share price, and the invention assignment agreement, which covers work created after incorporation.

Below is what each part of the agreement does and what to check before signing.

How the three founder IP documents fit together

Some founders assign pre-incorporation IP inside the stock purchase agreement itself rather than in a separate document. The terms below apply either way.

Parties, date, and consideration

Parties. The founder who created the IP and the company. If two founders built something together, each assigns their own rights in it.

Effective date. The date the agreement is actually signed. The assignment covers work created before that date.

Consideration. What the founder receives for the assignment. When the IP counts toward the purchase price of founder shares, the agreement or the stock purchase agreement says so. Otherwise, a nominal amount or the founder's shares generally serve as consideration.

The definition of assigned technology

This is the most important section. It decides what actually moves to the company.

A broad definition. The agreement typically covers all technology, inventions, code, designs, works of authorship, trade secrets, and other materials the founder created that relate to the company's business, along with all the intellectual property rights in them.

A specific schedule. An exhibit lists concrete items: code repositories, product names, domain names, design files, trademarks or trademark applications, patent applications, and research or data sets. A specific list removes doubt about whether a particular item was included.

All rights, worldwide. The assignment covers copyrights, patent rights, trade secret rights, and trademark rights, with the goodwill attached to any trademarks, in every country.

Moral rights. Where the law allows, the founder waives or agrees not to assert moral rights, such as the right to be named as author, so the company can modify and use the work freely.

Present assignment language

An assignment should transfer rights immediately, using language such as "hereby assigns." A promise to assign in the future may not transfer anything until another document is signed. The US Supreme Court's 2011 decision in Stanford v. Roche turned on this difference, and investors' counsel looks for present-tense wording.

Further assurances and power of attorney

Further assurances. The founder agrees to sign any additional documents the company needs to record or enforce its ownership, such as patent filings, trademark transfers, or domain registrar forms.

Power of attorney. If the founder is unavailable or unwilling to sign those documents later, the agreement appoints the company as the founder's attorney-in-fact to sign them on the founder's behalf. This is what protects the company if a founder leaves on bad terms.

The founder's representations

The founder states facts about the IP they are assigning, and the company relies on those statements.

Ownership. The founder owns the IP and has the right to assign it.

No conflicting claims. No one else, including a former employer, a university, or a co-creator, has a claim to it. A founder who built part of the work while employed elsewhere should check their employment agreement before signing.

Third-party components. Any third-party or open-source code included in the technology is disclosed, so the company knows what licenses it has to comply with.

No conflicting agreements. Signing the assignment doesn't breach any other agreement the founder is bound by.

If a representation isn't true, it should be raised and resolved before signing rather than signed over.

Excluded technology

Founders sometimes have earlier work that is unrelated to the company or that they want to keep. The agreement can list it as excluded. Anything not excluded that relates to the business is assigned. If the company needs to use excluded work, it should get a written license to it.

Governing law and other terms

The agreement states which law governs it, often Delaware or the state where the company operates. It may include confidentiality terms, though those are usually covered in the invention assignment agreement.

Founders outside the US. Local law can add requirements for an assignment to be fully effective in the founder's country. India's copyright law, for example, expects an assignment to state its duration and territory. Founders living outside the US should have the agreement reviewed by counsel in their country.

A worked example

Northwind Labs' CTO, Daniel, built a prototype over four months before incorporation. His technology assignment agreement assigns all technology related to the business he created before the signing date, and its exhibit lists:

Daniel excludes an unrelated open-source library he maintains, and the agreement grants Northwind a license to the parts of it the prototype uses. He signs the assignment, his invention assignment agreement, and his stock purchase agreement on the same day, after the board consent approving his shares.

What to check before signing

The exhibit is specific. Every repository, domain, and design the company relies on is listed.

The language is present tense. The agreement says "hereby assigns," not only "agrees to assign."

Every creator signs. Each founder who built part of the technology assigns their own contribution.

Former employer issues are resolved. Any work built while employed elsewhere has been checked against that employment agreement.

Accounts follow the assignment. Domains, repositories, and other accounts are moved into the company's name, not just assigned on paper.

Dates are in order. The technology assignment and invention assignment agreement are signed on or before the stock purchase agreement, and each carries the date it was actually signed.

The bottom line

A founder IP assignment agreement is short, but each part does a specific job: the definition and exhibit decide what moves to the company, the present-tense language makes the transfer immediate, the further assurances and power of attorney keep it enforceable after a founder leaves, and the representations confirm nobody else has a claim. Reading those sections before signing, and making sure the exhibit actually lists what the company depends on, is what turns the document from a formality into proof of ownership.

Frequently asked questions

What is a technology assignment agreement?

It is the document in which a founder transfers to the company the technology and intellectual property they created before incorporation, such as code, designs, domains, and inventions. It is usually signed at incorporation, alongside the founder's stock purchase agreement.

What should be listed in an IP assignment exhibit?

Every specific item the company relies on: code repositories, domain names, product names, design files, trademarks, patent applications, and data sets. A specific list removes any doubt about whether an item was included.

What is the difference between a technology assignment and a CIIAA?

A technology assignment covers IP a founder created before incorporation. A confidential information and invention assignment agreement covers IP created for the company afterward and also protects confidential information. Founders usually sign both.

Why does an IP assignment include a power of attorney?

It lets the company sign documents needed to record or enforce its ownership, such as patent or trademark filings, if the founder is unavailable or unwilling to sign them later. It protects the company if a founder leaves.

Can a founder keep some of their earlier work?

Yes. Work unrelated to the company, or work the founder wants to keep, can be listed as excluded technology. If the company needs to use it, it should get a written license.

Does an IP assignment need to be notarized?

Not generally, for it to be valid between the founder and the company. Some filings, such as recording a patent assignment, have their own requirements, and founders outside the US may have local formalities to follow.