How to transfer patent ownership
Clients applying for patents for the first time often express a hesitation in identifying inventors, especially when they (the principals of the company) are not the inventors. Those concerns are typically allayed when they understand that a patent assignment can easily transfer ownership of the patent rights to another entity. Transferring patent ownership is fairly straightforward – the paperwork needs to be promptly signed and recorded with the USPTO.
Why must individual inventors be identified?
Sometimes, the question is asked differently: Why can’t we just name the company?
The reason is that US patent laws require that a patent application identify each individual inventor who contributed to the invention as claimed. The inventors are presumed to be the owners unless other documentation is filed with the USPTO to show that ownership belongs to another entity, such as a corporation.
So patent ownership starts with the inventors, but the inventors can then transfer patent rights to a company.
What is a patent assignment?
A patent assignment is a document transferring ownership of the patent application from one person/entity to another. Most patent assignments will identify the inventors as the assignors (i.e., the ones transferring away patent rights) and a company as the assignee (i.e., the one receiving the rights). It’s possible to have a second assignment recorded for the same patent filing where the first company may transfer ownership to a second company or to an individual.
According to US practice, the assignment needs to be signed by only the assignors since it’s a unilateral transfer of rights, and not a bilateral contract requiring signatures of both parties. Certain foreign countries (e.g., Australia) require patent assignments to be executed by both the assignor and assignee.
An executed copy of the patent assignment should then be recorded with the USPTO against each patent filing identified in the assignment. It’s best to get all inventors to sign the patent assignment as early as possible, and preferably before the patent application is filed. That way, your patent attorney can record the executed assignment promptly after the application is filed. As time passes, it may become increasingly challenging to obtain inventor signatures given the possibility of job relocation, termination, retirement, etc.
When should a patent assignment be filed?
It is important to get a patent assignment signed by each inventor as early as possible. Obtaining signatures from the inventors early on is generally advisable since it might be difficult to locate inventors later on. For example, an ex-employee may relocate or leave on bad terms which may make it especially difficult for employer-assignee to obtain signatures.
Once the patent application is filed, we prefer to file the executed assignment concurrently with the initial filing if the signed copies are available. If not, we strive to obtain the executed assignments promptly and file the patent assignments within three months of the application filing date pursuant to 35 USC 261.
One reason patent owners might hold off is the publication of their utility non-provisional patent application. If an assignment is recorded with the USPTO prior to publication, then the published application will show the name of the assignee, thereby making it easier for any interested parties to find your application and track its ongoing status.
Is a new assignment required for each subsequent application?
Only a single assignment is required for a particular patent application and all related counterpart applications (e.g., international application, continuations, etc.). If a continuation-in-part (CIP) contains new matter introduced by a new inventor, then a new assignment for the CIP should be signed by the new inventor.
How to search patent assignments
The USPTO patent assignment search site allows anyone to search for patent assignments.
What if an inventor is unavailable or unwilling to sign a patent assignment?
It is not uncommon for employees to leave a company. If an inventor is unavailable or unwilling to sign an assignment, the assignee may proceed without an executed assignment by submitting documentary evidence of ownership [see MPEP 409.05]. For example, the assignee may consider submitting a copy of an employment agreement showing that the employee/inventor was under an obligation to assign the invention to employer.
If an employment agreement cannot be produced, the employer may seek to demonstrate a proprietary interest with a legal memorandum:
A proprietary interest obtained other than by assignment or agreement to assign may be demonstrated by an appropriate legal memorandum to the effect that a court of competent jurisdiction (federal, state, or foreign) would by the weight of authority in that jurisdiction award title of the invention to the 37 CFR 1.46 applicant. The facts in support of any conclusion that a court would award title to the 37 CFR 1.46 applicant should be made of record by way of an affidavit or declaration of the person having firsthand knowledge of same. The legal memorandum should be prepared and signed by an attorney at law familiar with the law of the jurisdiction involved. A copy (in the English language) of a statute (if other than the United States statute) or a court decision (if other than a reported decision of a federal court or a decision reported in the United States Patents Quarterly) relied on to demonstrate a proprietary interest should be made of record.MPEP 409.05
What if there are joint owners of a patent?
35 USC § 262 has this to say about joint patent owners:
In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.35 US Code Section 262
Joint ownership of a patent is tricky because the default rule is that each owner (assignee) owns 100% of the patent and can do with it what they want without obtaining the consent of other co-owners. The idea of each co-owner owning 100% of a piece of property seems counterintuitive until you realize that a patent is the right to exclude others from using the patented invention. In absence of an agreement to the contrary, therefore, each patent co-owner has the right to exclude others, or to license the patented technology to others, without having to obtain consent from the other co-owners.
If joint owners wish to divide fees from monetizing the patent (e.g., royalties from patent licensing), then such detailed terms should be clearly specified in the written agreement. Otherwise, partial ownership of a patent (e.g., percentage ownership of patent) begs the question of what exactly is being divided.