Assignments: Information

What is an assignment?  35 USC 261, Para. 4: “An assignment, grant or conveyance will be void as against any subsequent purchaser or mortgagee for a valid consideration, without notice, unless it is recorded in the Patent or Trademark Office within three months of its date or prior to such subsequent purchase or mortgage.”

If an assignment is not recorded with three months after signing, the assignee stands at risk of having its rights subordinated to a subsequent bona fide purchaser or lender acting without notice of the assignment.

Assignments vs. Licenses?:  A license is a grant from the patent owner (usually the inventor) to another party to some or all of rights the owner must patent.  Note that the rights conveyed to the licensee by a license agreement may be assigned.  

Do you have to assign your Patents? No, only if there is a contractual obligation (e.g. Employment contract or Sale Agreement). 

When should an assignment occur? While it is possible to assign a provisional patent application, most inventors, investors, and companies prefer to hold off on assigning provisional patent applications until filing the corresponding formal utility or PCT applications due to costs.  We recommend companies do NOT delay because events can occur that may make assignments difficult later or impossible (death or disability of the inventor, change of mind by the inventor, divorce, etc.).

What are the Consequences if you fail to record an Assignment? Rights are not enforceable by assignee without a recorded assignment. No recovery of damages for infringement in period prior to recordation. Sales by unrecorded assignee are not counted towards use or working requirements, e.g. for repelling compulsory licensing.

What are the Requirements of an Assignment? Must be in writing. Transfer of (intangible) property. Local venue requirements for transfer apply. In writing; Clear identification of property (i.e. Patent No.); Recitation of exchange of consideration; and Acceptance signature by assignee required in some countries (not required in US)

What happens if the inventor is not available? The party asserting that it is the assignee of patent must established it has colorable rights. Normally, the patent office needs a copy of the employment agreement, sale or assignment agreements or other documentary evidence.  If the inventor dies, then the patent office will insist that a statement from the executor of the estate or heir (after probate) be submitted. In the inventor refuses, then the patent office will insist of documentary evidence.

Change of Corporate Name? If name change only, and no change of ownership, then record the Certificate of Name Change from the Secretary of State from state of incorporation. 

What if Merger, Corporation Conversion or Reorganization, Asset Sale; A Certificate of Merger must be obtained from Secretary of State from the state of incorporation. Recordation is recommended for maintain a proper chain of record title.

When is new Assignment required? CIP? – Yes; Division? -No; Continuation? -No

Corrections to Issued Patents?  Errors in the parties’ name or state of incorporation; Errors in identification of listed property; Intent of the parties’ control; Record corrected assignment.

Expungement? Once an assignment has been recorded the PTO will not remove the document from its records.

A change of Addresses? Normally unnecessary to correct address changes.  The addresses of the parties in the Assignment cover sheet must be correct at the time of recordation.

Party Defunct?

What happens if a party in the chain of title is dissolved or defunct?Chain of title must be clear, file necessary documents identifying the successors in interests.

Bankruptcy? Assignment/bill of sale from Trustee is recorded.

Security Agreements? No ownership interest transfer, therefore Assignment not required.  It may be important to record a Security Agreement to protect interest superior to subsequent assignment and other security interests is created. Release of Security Interest should be recorded by Borrower; Contact Secretary of State Office too.

Special Joint Inventor situations?  Assignment document transfers rights from some co-inventors. 

Notary Public? Not required in U.S; may by required in some foreign countries (U.S. consulate).

PCT filing Issues: At least one PCT applicant must own any claim of priority.


NWPatents - Dean A. Craine, P.S.
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Fax: 425.637.9312

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