Intellectual Property rights can be complex. Transfers even moreso.
In 1996, Prince created tracks for Apogee’s Duke Nukem 3D. Rather than buy these tracks, Apogee licensed them from Prince. This meant that Prince retained ownership.
Fast forward to 2010, Apogee, and all its IP, is sold to Gearbox. Since Apogee had only licensed Prince’s music, Apogee never owned this music, and thus a transfer of Apogee’s IP rights did NOT include an ownership right in Prince’s work. It only included the same license that Prince and Apogee had previously agreed to.
As a result, Gearbox did not own the music in Duke Nukem 3D, even though it had bought all the rights that Apogee had from them. This meant that Gearbox must continue paying Prince in accordance with the licensing agreement.
As the Duke Nukem case illustrates, even a transfer of rights “free and clear” – may not actually be free and clear. The more authors, the more owners, and the more transfers there are, the higher the likelihood of a zombie claim having some merit crawling up from the cracks of these contracts (or perhaps as the result of a dispute that wasn’t previously settled).
Many small businesses don’t track the rights and interests in the ownership of their IP. Some businesses lack proper “Work for Hire” clauses or assignment clauses. These are all issues that can come back to haunt you years later. It is always best to get everything in writing and agreed upon when parties are friendly and amicable, before any disputes arise.
If you have any concerns over your IP rights or contracts, we can help. Call or text Arabi Law at 657-333-6264 or email us at firstname.lastname@example.org for a quick response.