File A Patent Assignment Law

Just like many other forms of property, such as houses, cars, etc. where once you become the owner of the property, you record your ownership rights to put others on notice, for patents, you do the same thing.  Under the patent laws, 35 U.S.C. § 261, one must file an assignment of a patent against that patent in the U.S. Patent and Trademark Office within three months from its purchase (or before a subsequent purchase), else the assignment is void against any subsequent purchaser of the patent who does not have notice of the prior assignment.  The costs for filing are currently $40 per patent, plus any legal costs, but the costs of not filing could be enormous if a dispute arises later about the ownership of the patent.

During the patent application process, for various administrative reasons, one might file a continuation or divisional patent application stemming from a parent patent application.  The Manual of Patent Examining Procedure (“MPEP”), § 306, states that a patent assignment filed against the parent application is considered effective against any such continuation or divisional application.  For many patent practitioners, this is sufficient basis to not file assignments in those situations, as they consider this to be the law.  However, what many patent practitioners do not realize is that the MPEP Forward itself states that the MPEP does not have the force of law.  Therefore, one should not rely on the MPEP and instead rely on the applicable law about patent assignments, which would be contract law and 35 U.S.C. § 261.  One should ensure that the contract or patent assignment includes language assigning any continuation or divisional patent applications stemming from parent patent applications.  And then one should promptly file in accordance with 35 U.S.C. § 261 against such continuation or divisional patent applications to ensure proper notice is given of the ownership rights.  Then one will have satisfied the legal requirements to ensure their ownership of such applications, instead of relying on MPEP 306, which does not have the force of law.

In addition to the legal considerations, there are also logical and practical considerations for prompt filing of assignments against continuations and divisionals.  For instance, if one has to divide a patent application, selling the parent application but retaining the divisional application, if one relied on MPEP 306, then when the buyer of the parent application filed the assignment against it, MPEP 306 would appear to state that the buyer was then effectively the owner of the divisional application.  That would be contrary to the contract and is not logical, so MPEP 306 is flawed and should not be relied on.  Further, practical considerations include that if one does not file against continuations or divisionals, if one tries to license such patents or enter into a secured transaction in which a lien is to be recorded against such patents, then the other parties who will have interests in those patents will have to spend further effort ensuring ownership is accurate and requiring you to file the assignments, causing even further costs than if they had simply been filed in the first place.  Other practical considerations include that sometimes companies have the same sets of inventors enter into and then file contradictory assignments, or retain sold patents on their books and continue to file name changes and other assignments against such patents, etc., perhaps due to the difficulties in managing large portfolios of patents, but filing promptly and properly at the outset against continuations and divisionals can minimize such future issues.  Finally, filing against continuations and divisionals ensures that the patent assignments themselves get reviewed and confirmed to include language assigning continuations and divisionals, which protects companies by ensuring they have proper ownership rights.

In summary, it is a best practice to record assignments against continuations and divisionals in order to comply with legal requirements rather than relying on MPEP 306 which does not have the force of law, and such filing ensures proper chain of title and ownership of one’s patents.

About John Slaughter

John Slaughter, a registered patent attorney, handles the intellectual property aspects of corporate mergers, acquisitions and credit facilities, specifically concentrating his practice in the areas of: intellectual property due diligence, intellectual property licensing and transactional work, intellectual property litigation and domain name disputes, including adversarial administrative proceedings and commercial transactions.

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301 Ownership/Assignability of Patents and Applications [R-07.2015]

35 U.S.C. 261   Ownership; assignment.

Subject to the provisions of this title, patents shall have the attributes of personal property. The Patent and Trademark Office shall maintain a register of interests in patents and applications for patents and shall record any document related thereto upon request, and may require a fee therefor.

Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing. The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States.

A certificate of acknowledgment under the hand and official seal of a person authorized to administer oaths within the United States, or, in a foreign country, of a diplomatic or consular officer of the United States or an officer authorized to administer oaths whose authority is proved by a certificate of a diplomatic or consular officer of the United States, or apostille of an official designated by a foreign country which, by treaty or convention, accords like effect to apostilles of designated officials in the United States, shall be prima facie evidence of the execution of an assignment, grant, or conveyance of a patent or application for patent.

An interest that constitutes an assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.

35 U.S.C. 262   Joint 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.

37 CFR 3.1  Definitions.

For purposes of this part, the following definitions shall apply:

Application means a national application for patent, an international patent application that designates the United States of America, an international design application that designates the United States of America, or an application to register a trademark under section 1 or 44 of the Trademark Act, 15 U.S.C. 1051 or 15 U.S.C. 1126, unless otherwise indicated.

Assignment means a transfer by a party of all or part of its right, title and interest in a patent, patent application, registered mark or a mark for which an application to register has been filed.

Document means a document which a party requests to be recorded in the Office pursuant to § 3.11 and which affects some interest in an application, patent, or registration.

Office means the United States Patent and Trademark Office.

Recorded document means a document which has been recorded in the Office pursuant to § 3.11.

Registration means a trademark registration issued by the Office.

I. OWNERSHIP

Ownership of a patent gives the patent owner the right to exclude others from making, using, offering for sale, selling, or importing into the United States the invention claimed in the patent. 35 U.S.C. 154(a)(1). Ownership of the patent does not furnish the owner with the right to make, use, offer for sale, sell, or import the claimed invention because there may be other legal considerations precluding same (e.g., existence of another patent owner with a dominant patent, failure to obtain FDA approval of the patented invention, an injunction by a court against making the product of the invention, or a national security related issue).

For applications filed on or after September 16, 2012, the original applicant is presumed to be the initial owner of an application for an original patent. See 37 CFR 3.73(a). For applications filed before September 16, 2012, the ownership of the patent (or the application for the patent) initially vests in the named inventors of the invention of the patent. See Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248, 26 USPQ2d 1572, 1582 (Fed. Cir. 1993). A patent or patent application is assignable by an instrument in writing, and the assignment of the patent, or patent application, transfers to the assignee(s) an alienable (transferable) ownership interest in the patent or application. 35 U.S.C. 261.

II.ASSIGNMENT

“Assignment,” in general, is the act of transferring to another the ownership of one’s property, i.e., the interest and rights to the property. In 37 CFR 3.1, assignment of patent rights is defined as “a transfer by a party of all or part of its right, title and interest in a patent [or] patent application....” An assignment of a patent, or patent application, is the transfer to another of a party’s entire ownership interest or a percentage of that party’s ownership interest in the patent or application. In order for an assignment to take place, the transfer to another must include the entirety of the bundle of rights that is associated with the ownership interest, i.e., all of the bundle of rights that are inherent in the right, title and interest in the patent or patent application.

III.LICENSING

As compared to assignment of patent rights, the licensing of a patent transfers a bundle of rights which is less than the entire ownership interest, e.g., rights that may be limited as to time, geographical area, or field of use. A patent license is, in effect, a contractual agreement that the patent owner will not sue the licensee for patent infringement if the licensee makes, uses, offers for sale, sells, or imports the claimed invention, as long as the licensee fulfills its obligations and operates within the bounds delineated by the license agreement.

An exclusive license may be granted by the patent owner to a licensee. The exclusive license prevents the patent owner (or any other party to whom the patent owner might wish to sell a license) from competing with the exclusive licensee, as to the geographic region, the length of time, and/or the field of use, set forth in the license agreement.

A license is not an assignment of the patent. Even if the license is an exclusive license, it is not an assignment of patent rights in the patent or application.

IV. INDIVIDUAL AND JOINT OWNERSHIP

Individual ownership - An individual entity may own the entire right, title and interest of the patent property. This occurs where there is only one inventor, and the inventor has not assigned the patent property. Alternatively, it occurs where all parties having ownership interest (all inventors and assignees) assign the patent property to one party.

Joint ownership - Multiple parties may together own the entire right, title and interest of the patent property. This occurs when any of the following cases exist:

  • (A) Multiple partial assignees of the patent property;
  • (B) Multiple inventors who have not assigned their right, title and interest; or
  • (C) A combination of partial assignee(s), and inventor(s) who have not assigned their right, title and interest.

Each individual inventor may only assign the interest he or she holds; thus, assignment by one joint inventor renders the assignee a partial assignee. A partial assignee likewise may only assign the interest it holds; thus, assignment by a partial assignee renders a subsequent assignee a partial assignee. All parties having any portion of the ownership in the patent property must act together as a composite entity in patent matters before the Office.

V.MAKING THE ASSIGNMENT OF RECORD

An assignment can be made of record in the United States Patent and Trademark Office (Office) in two different ways, for two different purposes. The differences are important to note:

  • (A) An assignment can be made of record in the assignment records of the Office as provided for in 37 CFR Part 3. Recordation of the assignment provides legal notice to the public of the assignment. It should be noted that recording of the assignment is merely a ministerial act; it is not an Office determination of the validity of the assignment document or the effect of the assignment document on the ownership of the patent property. See 37 CFR 3.54 and MPEP § 317.03. For a patent to issue to an assignee, the assignment must have been recorded or filed for recordation in accordance with 37 CFR 3.11. See 37 CFR 3.81(a).
  • (B) An assignment can be made of record in the file of a patent application, patent, or other patent proceeding (e.g., reexamination proceeding). This step may be necessary to permit the assignee to “take action” in the application, patent, or other patent proceeding under the conditions set forth in 37 CFR 1.46 and 37 CFR 3.81(a) and MPEP § 325 (for applications filed on or after September 16, 2012) or under the conditions set forth in pre-AIA 37 CFR 3.73 and MPEP § 324 (for applications filed before September 16, 2012). Recordation of an assignment in the assignment records of the Office does not, by itself, permit the assignee to take action in the application, patent, or other patent proceeding.

Additionally, for applications filed under 35 U.S.C. 111(a), 363, or 385 on or after September 16, 2012, an assignment may contain the statements required to be made in an oath or declaration (“assignment-statement”), and if the assignment is made of record in the assignment records of the Office, then the assignment may be utilized as the oath or declaration. See 35 U.S.C. 115(e), 37 CFR 1.63(e), and MPEP §§ 302.07, 317, and MPEP § 602.01(a).

301.01 Accessibility of Assignment Records [R-11.2013]

37 CFR 1.12  Assignment records open to public inspection.

  • (a)
    • (1) Separate assignment records are maintained in the United States Patent and Trademark Office for patents and trademarks. The assignment records, relating to original or reissue patents, including digests and indexes (for assignments recorded on or after May 1, 1957), and published patent applications are open to public inspection at the United States Patent and Trademark Office, and copies of patent assignment records may be obtained upon request and payment of the fee set forth in § 1.19 of this chapter. See § 2.200 of this chapter regarding trademark assignment records.
    • (2) All records of assignments of patents recorded before May 1, 1957, are maintained by the National Archives and Records Administration (NARA). The records are open to public inspection. Certified and uncertified copies of those assignment records are provided by NARA upon request and payment of the fees required by NARA.
  • (b) Assignment records, digests, and indexes relating to any pending or abandoned patent application, which is open to the public pursuant to § 1.11 or for which copies or access may be supplied pursuant to § 1.14, are available to the public. Copies of any assignment records, digests, and indexes that are not available to the public shall be obtainable only upon written authority of an inventor, the applicant, the assignee or an assignee of an undivided part interest, or a patent practitioner of record, or upon a showing that the person seeking such information is a bona fide prospective or actual purchaser, mortgagee, or licensee of such application, unless it shall be necessary to the proper conduct of business before the Office or as provided in this part.
  • (c) Any request by a member of the public seeking copies of any assignment records of any pending or abandoned patent application preserved in confidence under § 1.14, or any information with respect thereto, must:
    • (1) Be in the form of a petition including the fee set forth in § 1.17(g); or
    • (2) Include written authority granting access to the member of the public to the particular assignment records from an inventor, the applicant, the assignee or an assignee of an undivided part interest, or a patent practitioner of record.
  • (d) An order for a copy of an assignment or other document should identify the reel and frame number where the assignment or document is recorded. If a document is identified without specifying its correct reel and frame, an extra charge as set forth in § 1.21(j) will be made for the time consumed in making a search for such assignment.

Assignment documents relating to patents, published patent applications, registrations of trademarks, and applications for registration of trademarks are open to public inspection. Records related to assignments of patents, and patent applications that have been published as patent application publications are available on the USPTO website. To view the recorded assignment document itself, members of the public must place an order pursuant to 37 CFR 1.12(d).

The Office will not open only certain parts of an assignment document to public inspection. If such a document contains two or more items, any one of which, if alone, would be open to such inspection, then the entire document will be open. Thus, if a document covers either a trademark or a patent in addition to one or more patent applications, it will be available to the public ab initio; and if it covers a number of patent applications, it will be so available as soon as any one of them is published or patented. Documents relating only to one or more pending applications for patent which have not been published under 35 U.S.C. 122(b) will not be open to public inspection.

Copies of assignment records relating to pending or abandoned patent applications which are open to the public pursuant to 37 CFR 1.11 or for which copies or access may be supplied pursuant to 37 CFR 1.14 are available to the public. For pending or abandoned applications which are not open to the public pursuant to 37 CFR 1.11 or for which copies or access may not be supplied pursuant to 37 CFR 1.14, information related thereto is only obtainable upon a proper showing of written authority. For applications filed on or after September 16, 2012, the written authority must be from (A) an inventor, (B) the applicant, (C) the assignee or an assignee of an undivided part interest, (D) a patent practitioner of record, or (E) a person with written authority from (A), (B), or (C) or (D). See 37 CFR 1.12. For applications filed prior to September 16, 2012, the written authority must be from the applicant or applicant’s assignee or from the attorney or agent of either, or upon a showing that the person seeking such information is a bona fide prospective or actual purchaser, mortgagee, or licensee of such application. See pre-AIA 37 CFR 1.12.

If the application on which a patent was granted is a division, continuation, or continuation-in-part of an earlier application, the assignment records of that earlier application will be open to public inspection because copies or access may be supplied to the earlier application pursuant to 37 CFR 1.14.

Assignment records relating to reissue applications are open to public inspection because reissue applications are open to public inspection pursuant to 37 CFR 1.11(b).

Requests for abstracts of title for assignments of patents recorded after May 1, 1957, are provided by the Certification Division upon request and payment of fee required in 37 CFR 1.19. Requests for copies of pre-1957 records for patents should be directed to the National Archives and Records Administration (NARA). Since these records are maintained by NARA, it is more expeditious to request copies directly from NARA, rather than from the Office, which would then have to route the requests to NARA. Payment of the fees required by NARA should accompany all requests for copies.

All assignment records from 1837 to April 30, 1957 for patents are now maintained and are open for public inspection in the National Archives Research Room located at the Washington National Records Center Building, 4205 Suitland Road, Suitland, Maryland 20746. Assignment documents recorded before 1837 are maintained at the Civilian Records Division of the National Archives at College Park, 8601 Adelphi Road, College Park, MD 20740-6001.

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