In a recent judgment, Frischmann v Vaxeal Holdings SA [2023] EWHC 2698, the High Court considered whether an individual can legally assign rights by way of a power of attorney under section 136 of the Law of Property Act 1925 (LPA).
No legal assignment
Section 136 of the LPA requires assignment to be "by writing under the hand of the assignor". In this case, whilst the assignment in question was written, it was signed on behalf of the assignor by an attorney acting under a power of attorney. The Court found that this did not satisfy the requirement for assignment "under the hand of the assignor", and therefore there was no valid legal assignment. There had been, however, an equitable assignment.
Assignment of intellectual property rights
The rights assigned in this case were under loan agreements and a guarantee; intellectual property rights were not the subject matter. It is worth noting that under intellectual property laws like the Copyright, Designs and Patents Act 1988 (CDPA) and the Trade Marks Act 1994 (TMA) the statutes contain specific language regarding the assignment of rights that contemplate assignment via powers of attorney, i.e. assignments are to be signed "by or on behalf of the assignor". On the face of it, Frischmann v Vaxeal Holdings SA would therefore not prevent the assignment of trade marks and copyright by way of power to attorney because the rules of assignment for these rights are not derived from section 136 of the LPA.
The catch
While this decision may not directly apply to the assignment of rights like trade marks and copyright because of the different wording in the relevant laws (TMA and CDPA respectively), assigning intellectual property rights often includes assigning the right to take action in relation to past infringements. This amounts to the assignment of a 'chose in action', which is governed by section 136 of the LPA.
As such, whilst the decision might not prevent the assignment of intellectual property rights themselves via power of attorney, it will prevent assignment via power of attorney of certain ancillary rights that commonly accompany the assignment of intellectual property rights.
Comment
For various businesses, particularly certain creative industries, it has sometimes been customary for attorneys appointed under powers of attorney to sign documents on behalf of assignors. Such business practices may need to be revisited in light of Frischmann v Vaxeal Holdings SA. Where the reason for that has been to drive efficiency and/or streamline operations, particularly for documents that need to be signed as deeds, businesses may now need to consider if there are other options available to them.
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