An assignment changes the ownership (title) to a right, while a license grants rights without changing ownership (title). The terms are easily confused in the context of patents because the USPTO one actually records a license as a type of assignment. The only way to really understand which entity has which rights is to review the relevant documents, which are all available from the recordation branch of the patent office.
Recording assignments and looking up already-recorded assignments can be accomplished at the USPTO assignment center.
Not necessarily. It often depends on what entity is supposed to own the patent rights. In many instances an invention is made by an employee of a company in the course of his/her employment, and in that case the employee usually has an obligation to assign the patent rights to the employer. The same is usually try of graduate students at a university – although undergraduates typically are under no obligation to assign their patent rights.
An important corollary is that an inventor can merely license his patent rights to a company that is exploiting the invention, and keep title to those rights in his own name. Investors are usually unhappy with that arrangement, but there can be significant advantages. One major advantage is that the patent holder is a “necessary and indispensable” to any litigation over patent validity. Any competitor trying to invalidate the patent must file the action in the district where the inventor resides.
Assignments of provisionals have substantially the same pros and cons as assigning formal utility and design applications. See the previous FAQ.
Since there are costs attending the handling and recording of assignments, many inventors and companies prefer to hold off on assigning provisional applications until filing of the corresponding formal (utility or PCT) applications. That is a dangerous strategy. In the interim between filing the provisional and the formal applications, there are all sorts of unfortunate events that can make later assignments difficult or impossible, including death or disability of an inventor, reluctance of an inventor to file an assignment due to a separation from a company, or divorce. In general, it’s better to assign right away, either along with the filing of a provisional, or shortly thereafter.
It is not technically necessary to re-file assignments for divisional or straight continuation applications. A properly worded prior assignment recorded against the original application is automatically effective because the assignment recorded against the parent application gives the assignee rights to child applications.
In the case of a continuation-in-part application (CIP), a prior assignment of the original application is not necessarily sufficient. For example, a CIP might have an additional inventor who was not named on the parent patent application, so the added inventor would need to assign his/her rights.
Absolutely. Indeed, it is a very common occurrence that an inventor will assign his invention to a company, and then the company will re-assign the rights to some other entity after the patent issues. Note that recordation of patent assignments follows similar rules to recordation of sale of real property. An assignment is only effective against a subsequent taker without notice if the assignment had been recorded. This is why real estate transactions are recorded the same day as the sale.
The USPTO charges $38 per patent or application to record an assignment. Thus, if an assignment references a family of 5 patent applications, the recordation fee is US$ 190. Of course, paralegal charges would also apply, and possibly attorney time. A law firm will typically add on an extra $100 to handle the filing.
Do I need to record an assignment?
Under U.S. law, assignments must be recorded to be effective as against third parties who do not have actual knowledge of the assignment. The statute is similar to recording statutes used for recording real property. Thus, although there is no requirement to record an assignment, it is foolish not to do so.
Note that absent some unusual circumstance, patent assignments do not have to be notarized for use within the United States. It is advisable to have both assignor and assignee execute the assignment, because if the assignment covers foreign patent rights, some foreign jurisdictions require execution by the assignee.
Under U.S. law, assignments must be recorded to be effective as against third parties who do not have actual knowledge of the assignment. The statute is similar to recording statutes used for recording real property. Thus, although there is no requirement to record an assignment, it is foolish not to do so.
Note that absent some unusual circumstance, patent assignments do not have to be notarized for use within the United States.
Preparing assignments is usually a simple matter of filling in the blanks of a form. Assignment forms (inventor to company and company to company) and guidelines for preparing such forms can be found in the Green Fields Patenting book.
Note that it is important to clearly identify whether the document being recorded is an assignment, license, or other document. The recording branch does not generally read the documents to verify the content.
The patent office will proceed as if the signature had been procured from the inventor, but only after establishing that the entity pursuing the application has colorable rights, and only after establishing that the inventor cannot be reached. If the inventor was an employee, the patent office will typically need a copy of the employee agreement, or other documentary evidence establishing those rights.
In the case of a deceased inventor, the patent office will insist upon a statement from the executor of the estate, or an heir if probate is finished. Where an inventor cannot be found, the patent office will insist upon seeing the letters, emails and faxes sent to the inventor, and will need a declaration from the person trying to make contact.
One simply records a certificate of name change or other formal document with the USPTO, using the assignment recordation form.
In foreign countries, name changes can be a real problem, and can cost anywhere from several hundred to several thousand dollars due to VAT taxes. Also beware that foreign attorneys often use fixed fees for each patent assigned. Thus, a foreign law firm might charge $500 to file an assignment for one patent, they might charge $10,000 to file an assignment for 20 patents, even though doing so only adds an additional 10 minutes of work.
It depends on the wording of the assignment, and the recordation laws of the foreign countries. Most assignments transfer all rights, title, and interest to U.S. patents and applications, and to corresponding foreign patents and applications. Even so, the assignments might not be legally effective in a given country until the assignment is recorded in that country. For foreign countries, be sure to have both assignors and assignee execute the assignment.
Many countries insist on a specific assignment that expressly lists that country. Thus, even though you have a fully executed assignment that covers all countries, you might STILL have to file additional assignments in foreign countries – an in several instances those additional assignments need to be notarized and apostilled! Apostilling can best be handled through a company called Parasec, https://www.parasec.com/.
Patent infringement damages accrue in some countries only from the date the assignment was actually recorded at the relevant patent office. Thus, delay in registering can cost a patent holder dearly in reduced patent infringement damages.
The main disadvantage to recording assignments is that many countries (including most or all of Europe) consider assignment of a patent or application to be a taxable transfer, and charge VAT (Value Added Tax) on the estimated value of the application or patent. Since the value is often low in the early days, and can rise considerably during the life of the patent, the disadvantage of recordation can be mitigated by registering early.
Assignments records at the USPTO are available for public inspection, but only for patents and published applications. One can search by reel/frame number, application, patent or publication number, and assignor or assignee name. The underlying documents are not available for download, but can be ordered from the assignment branch. Paper mail requests can take months, but electronic requests are usually filled within a day or two.
No. One should never rely upon the designation of “assignee” as set forth on the face of a patent. First, the patent office obtains the “assignment” information directly from the issue fee transmittal form, and there is no verification whatsoever that such information is, or even ever was, correct. The entry could well have been an error on the part of an attorney, paralegal, or secretary, and the issue fee transmittal form even warns that designation of an assignee of that form does not, in and of itself, affect an assignment. Second, although one can have the patent office issue a correction to an issued patent, the original patent is never altered. Third, even if the “assignee” information is correct, one cannot know from the face of the patent what rights were assigned. It might well be that only licensed rights were assigned, or that such rights are subject to a reversion.
Yes. But there can be real problems with multiple owners of a patent.
Unless there is some other agreement restricting what an entity can do with its ownership interest, a co-owner of any portion of a patent, (whether 99% or 1% or .0001%), can make use of the patent however they want. For example, a .0001% owner of a patent could license out its rights, and keep 100% of the license fee. Absent an agreement to the contrary, there is no duty of a co-owner of the patent to share license fees with any of the other co-owners.
One of the big problems with two entities owning portions of a given patent is that the two entities can compete with each other with respect to license fees. For example, if co-owner A offers to license the patent rights for 7%, co-owner B might choose to undercut the previous offer by offering to license the same rights for 5%. But then co-owner A comes back and offers to license the rights for 2%. Pretty soon the value of the license rights goes to zero. Also, if co-owner A gets upset with co-owner B, co-owner A could unilaterally abandon the patent, which would make it worthless to everyone.
Even if co-owners agree to share license fees 50-50, there can be problems. For example, co-owner A could decide to license out its patent rights for one dollar a year to a licensee that co-owner A owns, has an interest in, or perhaps has a relative with an interest in. Of course, co-owner A would be happy to share $0.50 of its $1 annual license fee with co-owner B, but co-owner B would be pretty upset.
Bottom line, co-ownership of a patent is really problematic.