types of patent assignments

Understanding Patent Assignment Agreements

A patent assignment agreement is a legal contract that transfers ownership of a patent or patent application from one entity or individual to another, operating within the framework of intellectual property laws. The agreement defines the specific patents, patent applications, or patent rights being assigned, and outlines the promises and assurances made by the assignor. It also establishes the process for resolving disputes arising from the assignment. By understanding the components, types, benefits, and risks of patent assignment agreements, parties can navigate the assignment process effectively and make informed decisions. To grasp the intricacies of patent assignment agreements, it is essential to examine the nuances of each component.

Table of Contents

What Is a Patent Assignment Agreement?

A patent assignment agreement is a legal contract that transfers ownership of a patent or patent application from one entity or individual to another, thereby conferring the assignee with the rights, interests, and obligations associated with the patent. This agreement operates within the legal framework of intellectual property laws, which govern the creation, protection, and transfer of intellectual property rights. The patent assignment agreement is a key instrument for facilitating the transfer of patent rights, enabling parties to negotiate and agree on the terms and conditions of the transfer. By executing this agreement, the assignor relinquishes their ownership and rights to the patent, while the assignee acquires the same rights, including the right to manufacture, use, and license the patented invention. The agreement provides a clear and binding framework for the transfer of patent rights, guaranteeing that the parties involved are aware of their obligations and responsibilities. Fundamentally, the patent assignment agreement is an essential tool for protecting and exploiting intellectual property, enabling inventors, companies, and individuals to optimize the value of their innovations.

Key Components of the Agreement

Seven essential components form the foundation of a patent assignment agreement, each playing a critical role in ensuring a comprehensive and enforceable transfer of patent rights. These components are carefully crafted to address specific aspects of the assignment, ensuring clarity and precision in the transfer of patent ownership.

Types of Patent Assignments

Patent assignment agreements can take various forms, each tailored to specific circumstances and goals, and understanding the different types of patent assignments is key to executing a successful transfer of patent rights. There are several types of patent assignments, including exclusive and non-exclusive assignments. Exclusive assignments grant the assignee the sole right to exploit the patent, whereas non-exclusive assignments allow the assignor to retain some rights. Another type of patent assignment is the partial assignment, where only a portion of the patent rights are transferred. International transfers are also common, where patent rights are assigned across national borders. In such cases, it is imperative to examine the laws and regulations of the relevant jurisdictions. Additionally, patent assignments can be limited by field of use, territory, or time, allowing the assignor to retain some control over the patent. Moreover, exclusive licenses can be granted, which give the licensee the right to exploit the patent, but the patent owner retains ownership. Understanding the different types of patent assignments is pivotal to executing complex patent transactions.

Benefits of Patent Assignment

By executing a well-structured patent assignment agreement, inventors and patent holders can realize numerous benefits that enhance the value and strategic potential of their intellectual property. One significant advantage is the potential for Increased Revenue through royalties, licensing agreements, or outright sales. By assigning patent rights, inventors can monetize their creations and generate passive income streams. Additionally, patent assignment can facilitate Strategic Partnerships, allowing companies to collaborate on research and development, expand their product offerings, or enter new markets. This can lead to mutual benefits, such as shared resources, reduced development costs, and accelerated innovation. In addition, patent assignment can also provide a competitive advantage by preventing others from using the patented technology, thereby protecting market share and reputation. Overall, a well-crafted patent assignment agreement can tap into the full potential of intellectual property, driving business growth and success. By leveraging these benefits, inventors and companies can capitalize on the value of their patents and stay ahead in today's fast-paced, innovation-driven economy.

Potential Risks and Pitfalls

Inventors and companies must be aware that patent assignment agreements can also harbor hidden dangers, including ambiguity in contract language, unequal bargaining power, and unforeseen consequences that can undermine the very value they seek to protect. These potential risks and pitfalls can lead to Hidden Liabilities, which may not be immediately apparent but can have significant financial implications down the line. For instance, a poorly drafted agreement may fail to address critical issues, such as ownership disputes or territorial restrictions, which can lead to costly litigation . Furthermore, Unforeseen Consequences can arise from agreements that do not account for future developments or changes in the market. This can lead to the loss of valuable intellectual property rights or the creation of unintended obligations. It is crucial to approach patent assignment agreements with caution and a clear understanding of the potential risks involved. By doing so, inventors and companies can mitigate these risks and safeguard that their intellectual property is protected and valued accordingly.

Drafting and Negotiating Strategies

When drafting and negotiating patent assignment agreements, it is vital to carefully consider the inclusion of specific key provisions to safeguard the parties' interests are adequately protected. Effective negotiation techniques are also vital to successfully navigate the assignment process and reach a mutually beneficial agreement. By concentrating on these critical aspects, parties can minimize potential disputes and guarantee a smooth transfer of patent rights.

Key Provisions to Include

Key to the efficacy of a patent assignment agreement are several vital provisions that should be meticulously drafted and negotiated to create a thorough and enforceable contract. Among these, the Assignment Scope provision is fundamental, as it defines the specific patents, patent applications, or intellectual property rights being transferred. This provision should clearly identify the assigned intellectual property, including patent numbers, application serial numbers, and relevant jurisdictions.

Another vital provision is Payment Terms, which outlines the consideration exchanged for the assignment of patent rights. This may include lump-sum payments, royalties, or milestone-based payments. The payment terms should be carefully negotiated to guarantee that the assignor receives fair compensation for the transferred intellectual property. Additionally, the agreement should specify the payment schedule, payment method, and any applicable taxes or fees. By including these key provisions, parties can clarify their rights and obligations, minimizing the risk of disputes and facilitating a successful patent assignment.

Effective Negotiation Techniques

During patent assignment negotiations, a thorough understanding of the intellectual property at stake and a well-thought-out negotiation strategy are crucial to achieving a mutually beneficial agreement. Effective negotiation involves a combination of skills, including active listening, creative leverage, and a deep understanding of the assignment agreement's key provisions. Active listening enables parties to clarify their interests, identify potential points of consensus, and build trust. By carefully considering the other party's needs and concerns, negotiators can create value through creative solutions that meet both parties' interests.

To exercise creative leverage, negotiators should identify potential deal-breakers and use them as bargaining chips to negotiate more favorable terms. This may involve making concessions in non-critical segments to secure key provisions. Additionally, negotiators should be prepared to walk away if the agreement does not meet their minimum requirements, as this can often prompt the other party to reconsider their position. By employing these effective negotiation techniques, parties can navigate complex patent assignment negotiations and achieve an agreement that satisfies their interests.

Frequently Asked Questions

Can a patent assignment agreement be terminated or cancelled?.

A patent assignment agreement can be terminated or cancelled upon occurrence of specific Breach Consequences, as outlined in the Termination Clauses, which may include material breaches, non-payment, or failure to perform contractual obligations.

How Do I Determine the Value of a Patent for Assignment?

To determine the value of a patent for assignment, consider factors such as patent royalties, market demand, and competitive landscape. Conduct a thorough patent valuation analysis, employing methods like cost approach, market approach, and income approach to arrive at a precise valuation.

Are Patent Assignments Publicly Disclosed or Confidential?

Patent assignments can be either publicly disclosed or confidential, depending on the agreement terms. While assignments are typically recorded with the USPTO, sensitive information, such as trade secrets, may remain confidential, unless voluntarily disclosed or revealed through public records.

Can a Patent Be Assigned to Multiple Parties Simultaneously?

In patent law, simultaneous assignment to multiple parties is possible, leading to joint ownership. Co-inventors, for instance, can jointly own a patent, with each owning an undivided interest in the entire patent, unless otherwise specified in the assignment agreement.

Do Patent Assignments Require Approval From Government Agencies?

In general, patent assignments do not require approval from government agencies, although International Regulations and Agency Oversight may apply in specific jurisdictions or circumstances, such as national security reviews or antitrust clearance.

UNLOCK YOUR COPY

Patent Assignment: Everything You Need to Know

A patent assignment is an irrevocable agreement for a patent owner to sell, give away, or transfer interest to an assignee, who can enforce the patent. 6 min read updated on November 05, 2020

Patent Assignment: What Is It?

A patent assignment is a part of how to patent an idea and is an irrevocable agreement for a patent owner to sell, give away, or transfer his or her interest to an assignee, who can benefit from and enforce the patent. The assignee receives the original owner's interest and gains exclusive rights to intellectual property. He or she can sue others for making or selling the invention or design.

There are four types of patent assignments:

Assignment of Rights - Patent Issued: This is for patents that have already been issued.

Assignment of Rights - Patent Application : This is for patents still in the application process. After filing this form, the assignee can be listed as the patent applicant.

Assignment of Intellectual Property Rights - No Patent Issued or Application Filed: This is for unregistered inventions with no patent.

Exclusive Rights

Advantages of a Patent Assignment

Assignees don't create a unique invention or design. They also don't go through the lengthy patent process. They simply assume exclusive rights to intellectual property.

Profit Potential

Many patents cover intellectual property that can earn the owner money. A patent owner can charge a lump sum sale price for a patent assignment. After the transfer, the assignee can start to earn profits from the patent. Both original owners and assignees can benefit from this business arrangement.

Disadvantages of a Patent Assignment

Too Many or Not Enough Inventors

Patents can have multiple owners who invented the product or design. Sometimes patents list too many or not enough inventors. When this happens, owners can argue about an incorrect filing. This kind of dispute can make a patent assignment impossible.

Limited Recourse

Older patents may already have many infringements. Not all patent assignments include the right to sue for past infringements. This is known as the right to causes of action. This can cost the assignee a lot of potential profit.

Examples of What Happens When You File a Patent Assignment vs. When You File a Patent License

When You File a Patent Assignment

The patent owner changes permanently. You file the paperwork with the United States Patent and Trademark Office (USPTO). Information about the new owner is available to the public.

Many owners charge a one-time fee for a patent assignment. The original owner doesn't receive additional payments or profits in the future. The new owner receives future profits.

When You File a Patent License

The patent owner doesn't change permanently. Most licenses have a time limit. At the end of the period, the original owner takes control again. Licensing information isn't always available through an online USPTO search. Contact the recordation office directly to get information about patent licenses.

The licensee can assign rights to another person or company. This adds another layer of ownership over the intellectual property.

Many owners charge royalties for a patent license. The licensee pays royalty fees throughout the license period. If the royalty fees are high and the license period is long, a patent assignment may be a better choice for earning the new owner more money.

Common Mistakes

Not Filing an Assignment Document

A verbal agreement is not official. File a patent assignment to change patent ownership.

Taking Action Before Filing

The assignee shouldn't make or sell the invention before the patent assignment is official. If an error or another problem happens, this could be patent infringement .

Making a Filing Error

Patent assignments are official documents. The assignee's name must be legal and correct. Before filing, check the spelling of the assignee name. If the assignee is a business, confirm the legal name. Many patents have more than one owner. List all names on the assignment.

Misidentifying the Patent

Include as much information about the patent as you can. List the patent number and title. Describe the intellectual property completely.

Not Searching for Security Interests

Patents can be collateral. A bank or another party can file a security interest in a patent, and this can limit how much an assignee can earn from a patent. Check for security interests before filing a patent assignment.

Not Filing a Proprietary Information Agreement

Many businesses file patents, as this is part of a business plan , and it's especially common for startup businesses. Inventorship problems can happen if employees file patents instead of the business.

Often, employees have an obligation to assign inventions to a company. This is true if they developed the invention on the job.

To avoid confusion, require employees to sign a proprietary information agreement. This automatically assigns inventions and designs to the business. Other options include signing an automatic assignment or an explicit assignment. These all clarify patent ownership.

Not Being Notarized

Make sure all official documents concerning your patent are notarized. There is a huge legal advantage to being notarized. It makes it so that your documents will be accepted as correct until it is proven otherwise. If you can't get your documents notarized, gather two witnesses. Have them attest to the signatures.

You have to file a patent assignment within three months of signing the form. If you don't, the assignee could lose ownership rights.

Frequently Asked Questions

Where Do I Record a Patent Assignment?

If you have a U.S. patent, record your patent assignment with the USPTO. If you have a foreign patent, file with the correct national patent offices.

I Can't Get a Signature from the Inventor. What Happens Now?

First, it needs to be officially established that:

• Whoever is pursuing the application has the right to do so.
• The inventor cannot be reached.

In order to establish this, the patent office will need a copy of the following:

• the employee agreement
• the assignment
• other evidence of the rights

After that, the patent office will continue as if the signature has been obtained, even though it hasn't.

If the inventor has died, the patent office will try to contact the person in charge of managing the deceased's estate or the heir. If the invented refuses to sign or is missing, the patent office will ask for a declaration from the person who is trying to contact them. They will also look at the following items that have been sent to the inventor:

• Do I Have to File a Patent Assignment if the Owner's Name Changed?

No, you don't need a patent assignment if only the person's or company's name changed. If the company merged with another, you may need a patent assignment.

What if I Make a Mistake on My Patent Assignment?

You can't correct a patent assignment. You have to assign it back to the original owner. Then you have to reassign with the correct information.

How Much Does a Patent Assignment Cost?

The patent assignment fee is $25. Filing electronically doesn't cost extra. You do have to pay an additional $40 fee if you file on paper.

Should I Hire a Lawyer?

Yes, you should get a lawyer to help with a patent assignment. A lawyer will make sure there are no filing errors. A lawyer knows how to describe the patent correctly. Errors and bad descriptions can limit the power of a patent assignment. This could cost the assignee a lot of money in future profits and legal fees.

Steps to File a Patent Assignment

1. Fill Out a Recordation Form Cover Shee t

The Recordation Form Cover Sheet is an official USPTO document. This includes the names of the assignor(s) and the assignee(s). It also includes the patent title and number.

2. Complete a Patent Assignment Agreement

The patent assignment agreement should list the assignor(s) and the assignee(s). It should state that the assignor has the right to assign the patent. It should also describe the intellectual property clearly and completely. It should also explain any financial or other transactions that have to take place. This includes a description of the lump sum payment.

3. Sign the Patent Assignment Agreement

All patent owners and assignees must sign the patent assignment agreement.

4. Submit the Patent Assignment

Finally, submit the patent assignment with the USPTO. You have to pay the assignment fee at this time.

If you need help with patent assignments, you can post your question or concern on UpCounsel's marketplace . UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• Brookfield Patent Lawyers
• Jackson Patent Lawyers
• Katy Patent Lawyers
• Kokomo Patent Lawyers
• Providence Patent Lawyers
• Reno Patent Lawyers
• Southaven Patent Lawyers
• How to Sell a Patent
• Patent Assignment Database
• Patent Companies
• Patent Pending Infringement
• Patent Rights
• Patent Attorney
• What Does a Patent Do
• How to File a Patent
• When Can You Say Patent Pending? Everything You Need to Know
• Atlanta Patent Lawyers
• Austin Patent Lawyers
• Boston Patent Lawyers
• Chicago Patent Lawyers
• Dallas Patent Lawyers
• Houston Patent Lawyers
• Los Angeles Patent Lawyers
• New York Patent Lawyers
• Philadelphia Patent Lawyers
• San Francisco Patent Lawyers
• Seattle Patent Lawyers
• Charlotte Patent Lawyers
• Denver Patent Lawyers
• Jacksonville Patent Lawyers
• Las Vegas Patent Lawyers
• Phoenix Patent Lawyers
• Portland Patent Lawyers
• San Antonio Patent Lawyers
• San Diego Patent Lawyers
• San Jose Patent Lawyers
• View All Patent Lawyers

The basics of patent assignments

What is a patent assignment, what are the requirements to make it valid, and why would a business enter into a patent assignment agreement? Read on to find answers to these questions and more.

Find out more about Patents

by   Cindy DeRuyter, Esq.

Cindy DeRuyter, Esq., has been writing for LegalZoom since 2018. She earned a Juris Doctor from Mitchell Hamline Scho...

Read more...

Updated on: December 4, 2023 · 2 min read

Defining Patent Assignment

Requirements to assign a patent, searching for patent assignments.

Assigning patents can be a great way for companies to generate revenue and reduce risks associated with intellectual property ownership. If you are considering entering into a patent assignment agreement, understand that it is irrevocable. Because of that, evaluate proposed terms and provisions carefully before moving forward.

Here's a high-level overview of how patent assignments work: when a patent's owner or applicant assigns it to another individual or company, the assignor agrees to relinquish their rights to enforce or benefit from it in the future.

You can assign rights for applications still pending with the United States Patent and Trademark Office (USPTO). When the USPTO approves the application, the assignee benefits from and may use and enforce the patent, not the assignor. Companies also assign rights for issued patents, which relieves the assignor of the burden of enforcing their intellectual property and provides a source of revenue.

Patent assignments can be lucrative for both parties. While assignors make money right away, assignees can create revenue streams by earning money from royalty payments. After an assignment is complete, the assignee has exclusive rights to such income.

A patent assignment agreement documents the transfer and arrangement between the parties. If you are considering entering into one, know that you need it to be written—a verbal agreement alone is insufficient.

Don't underestimate the importance of this, either. Without a valid agreement on file with the USPTO, an intended assignor remains legally responsible for the patent and an intended assignee gains none of the rights or benefits.

Here are the requirements for a valid written assignment:

• Confirm that the assignor has the full, legal right to make the assignment and that the assignee can legally assume the rights and obligations.
• Clearly identify both the assignor and assignee using legal names. If more than one company owns the patent, identify all owners.
• Identify the underlying patent by title and number and include a complete and accurate description of it.
• Describe the terms of the agreement, including financial arrangements.
• All parties must sign the agreement, with limited exceptions in situations where the assignor cannot be reached but where enough evidence exists that documents their intentions and rights.
• File the patent assignment with the USPTO within three months after the agreement is signed, paying the then-current fee.

Though the agreement is a legal document, it does not need to be notarized. However, obtaining notarization for the signatures provides added protection, limiting the risk of a party later claiming a signature was not valid.

The USPTO maintains a patent assignment database that includes all the assignments recorded since August 1980. Using the database, you can search with the assignor's or assignee's name, the patent number, application number, publication number, or other identifying information.

Properly assigning patents protects both assignors and assignees. If you want to assign a patent, downloading a patent assignment form can help. Alternatively, you can consult an intellectual property attorney .

You may also like

What Is a Power of Attorney (POA)? A Comprehensive Guide

A power of attorney can give trusted individuals the power to make decisions on your behalf—but only in certain situations.

August 22, 2024 · 20min read

How to Start an LLC in 7 Easy Steps (2024 Guide)

2024 is one of the best years ever to start an LLC, and you can create yours in only a few steps.

July 29, 2024 · 22min read