What is a Patent Assignment?
Patents convey the right to exclude others from making, using or selling the inventions claimed in the patents in the country or countries that issued the patents. To enjoy the benefits of these patent rights, your business should own its patents. However, under U.S. law, only an inventor or an assignee can own a patent and businesses cannot be listed as an inventor. Patent assignment is the legal mechanism to transfer ownership from inventors to your business or from one business to another.
Assignment differs from licensing in that an assignment transfers the assignor’s interest in an invention, patent application or patent while licensing grants particular rights to make, use or sell the invention in covered jurisdictions. An assignee receives the original owner’s interest and gains the exclusive rights to pursue patent protection through filing and prosecuting patent applications, and also to license and enforce any patents that may issue or be acquired that are subject to the assignment. In a license agreement, the patent owner grants another entity (the licensee) exclusive or non-exclusive rights to make, use or sell the patented technology, while the patent owner retains ownership.
Assignments typically are made by inventors to their employers as a requirement of employment contracts. Businesses also may assign patents to other businesses to transfer rights in connection with sales of patent portfolios or transfer of intellectual property rights associated with business interests transferred or acquired during mergers or acquisitions.
Clean title to patents including assignments from all inventors and prior owners of patents and patent applications to the current owner is a key factor in maintaining the enforceability and value of the underlying patent assets. Absence of clean and complete title can have significant adverse impacts on portfolio valuations for mergers and acquisitions. To ensure clean title to all patents, all new employees should be required to sign an employment agreement that establishes up front what intellectual property the company owns, which typically should include anything the employee invents while under your employment. In addition to a general assignment of rights in an employment agreement, specific written assignments for each new patent application should be executed by all inventors when it is filed, in order to memorialize ownership of the specific patent property.
To protect and reflect ownership, companies should record all patent assignment with the U.S. Patent and Trademark Office’s Assignment Recordation Branch using the Electronic Patent Assignment System (EPAS) as soon as possible after execution. Failure to promptly record assignments may put the assignee’s claim of ownership at risk. For example, if an assignor were to subsequently improperly assign to another purchaser that is unaware of the previous assignment and the prior assignment had not been recorded with the USPTO, the subsequent purchaser may be able to successfully claim ownership.
Barceló, Harrison & Walker LLP has extensive experience with managing and reviewing patent assignments in a variety of patent prosecution, portfolio management and mergers and acquisitions and can help you make sure you have clear title to all intellectual property that you have developed or acquired.