If you’re interested in getting more information about a patent assignment, the first thing that you should learn is that it’s a transfer of the property rights of owners in a given patent and any applications for it. Such transfers can happen either on their own or as a part of bigger asset purchases and sales. This agreement provides the records of ownership and protects the rights of each party involved. If you follow basic guidelines and check relevant samples, you’ll get the right knowledge of both responsibilities and rights. Consider liability obligations and the necessary documentation of ownership to be well on your way to getting a clear record of title for patents.
The definition of patent assignments
Basically, they are irrevocable agreements for patent owners to give away, sell, or transfer their interest to assignees who are eligible to enforce patents. It’s a part of how patents and their rights can be transferred to people who can benefit from them. Assignees receive the interest of original owners and gain all exclusive rights to a particular intellectual property. Furthermore, they have the right to sue other people for selling or making the design or invention.
Different types of patent assignments
All patent assignments can be divided into a few basic categories, such as:
- Exclusive rights;
- Assignments of rights or patent applications (suitable for the patents that are still in their application process);
- Assignments of rights or patent issued (ideal for issued patents);
- Assignments of intellectual property rights, application filed or no patent issued (designed for unregistered inventions without any patent).
The main benefits
Patent assignments come with certain benefits, including the fact that assignees don’t have to create any unique design or inventions. They aren’t forced to go through a lengthy and confusing parent process because assignees assume their exclusive intellectual property rights. Besides, there are many patents that cover the intellectual property that earn their owners money. This means that patent owners can charge a lump sum as the sale price of assignments. After transferring, assignees will start earning profits from their patents. Both assignees and original patent owners can take advantage of this business arrangement and its profit potential.
However, this business agreement also comes with certain drawbacks, such as not enough or too many investors. That’s because patents can have many owners who invented the design or product. When it happens, they may start arguing about the incorrect patent filing, and this dispute makes assignments impossible. Another disadvantage is a limited recourse because older patents may have many past infringements. Nowadays, not all patent assignments include the right to sue for them, and the right to causes of action may cost assignees a lot of money and potential profit.
Patent licenses vs. assignments
To compare the outcomes of filing patent licenses and assignments, you should check relevant examples. When you file patent assignments, owners change permanently and information about the new ones is available to everyone. Most patent owners prefer to charge a single fee for assignments because they won’t receive any extra profits or payments in the future as they all belong to new owners.
What happens when you file patent licenses? First, patent owners don’t change permanently, and it’s a huge difference. Many licenses have their time limits and original owners take their control again after their end. Licensees can assign rights to other companies and people, but it adds an extra ownership layer in terms of the intellectual property. Most owners charge specific royalties for patent licenses, and licensees pay their royalty fees during the entire license period. If they are quite high and a license period is very long, patent assignments offer a better solution to earn more money to new owners.
There are certain mistakes that must be avoided if you don’t want to end up with serious complications or problems. Failing to file the necessary assignment documents is the first one. Remember that all verbal agreements aren’t official, and that’s why you need to file an assignment to change the patent ownership.
Taking action before filing is another error that must be avoided. Assignees aren’t allowed to sell or make the invention before their patent assignments are official. If errors and other problems occur, this step will be considered a patent infringement. Making a filing error is a big problem too because all assignments are official documents, so the names of assignees must be correct and legal. Before filing anything, check their spelling to avoid further complications. As you already know, most patents have multiple owners, and you need to list all of their names correctly.
Misidentifying and security interests
If you don’t want to misidentify a patent, include as much information about it as possible. For example, you can list its title and number or describe its intellectual property in full. Patents are often collateral, so failing to search for security interests before filing for any assignment is a huge mistake. Banks and other parties can file their security interests on patents, thus limiting how much assignees can earn from them.
Proprietary information agreements
Many companies file patents as a part of their business plans, especially if they are only startups. If you fail to file the necessary proprietary information agreement, you risk ending up with unwanted inventorship issues. Employees often have their obligation to assign different inventions to businesses if they developed them on the job. To avoid any possible confusion, they need to sign this agreement to automatically assign specific designs and inventions to interested businesses. There are other effective options to clarify the patent ownership, such as explicit and automatic assignments.
Deadlines and being notarized
Ensure that all official patent papers are notarized to get a huge legal benefit. This simple step guarantees that all of your documents will be accepted as 100% correct. However, if you can’t do that for any reason, get two witnesses to attest to signatures. It’s necessary to file your patent assignment within 3 months of signing a form. If these deadlines are missed, assignees will lose their ownership rights.
Answers to frequently asked questions
If you have any questions in your mind, look for common answers below. Where patent assignments are recorded? If you have US patents, they are recorded with the USPTO. If your patents are foreign, you need to file with responsible national patent offices.
What will happen if you can’t get any signature from inventors? In general, you need to officially establish the following:
- People who pursue an application have their right to do that;
- Inventors can’t be reached.
To establish that, the patent office requires the copies of these documents:
- Employee agreements;
- Other proofs of rights.
Next, the patent office continues as if the necessary signature is obtained. If inventors are dead, the patent office must contact people who are in charge of managing their estate or heirs. If they are missing or refuse to sign, it’s necessary to task for the declaration from people who attempts to contact them. Look for these items sent to inventors:
Do you need to file patent assignments if owners’ names are changed? You don’t need any assignment if company or people’s names are changed. However, if companies merge with others, you still require it.
What if you make any mistake on patent assignments? Unfortunately, it’s not allowed to correct these documents, so you need to assign patents back to their original owners and reassign with correct data.
How much do patent assignments cost? Everything depends on the fee established by the original owner of patents.
Do you need to hire a professional lawyer? It’s advisable to hire qualified lawyers to get the necessary help because they guarantee that there will be no filing and other mistakes. Besides, lawyers know how to describe patents correctly and take other steps. Bad descriptions and mistakes usually limit the power of patent assignments and cost assignees a lot of money in their legal fees and future profits.
Basic steps to file patent assignments
First, you need to fill out a special recordation form cover sheet, which is an official document. It includes the names of assignees and assignors, patent number and title. You also need to complete a special agreement that lists each party involved and states that assignors have their right to assign patents. This document should describe the intellectual property completely and clearly. It also explains different transactions that will take place and includes a clear description of a lump sum payment. Next, assignees and all patent owners need to sign an agreement, and then assignments are submitted. The last step is paying a special fee on time.
A brief checklist of dos and don’ts
Patents are sets of exclusive signs in the invention or design given by the government to their inventors for a pre-set period of time. In essence, inventors are provided with their monopoly for their creations in exchange for an agreement to make them public and let other people to examine their work. Inventors are the only individuals who can use, make, and sell their inventions. Patent assignments usually take different forms, including:
- Transfers of the entire interest to other people or companies;
- Transfers of a specific interest part;
- Transfers valid only in a specific area of the country.
A particular transfer form is specific to an agreement of all parties. Patent licenses are different because people who receive rights from patent holders don’t gain any ownership. They just get the assurance that patent holders won’t sue them for using, selling, or making their inventions. License terms vary from one patent agreement to another and they may address different issues, including royalties, reversion, production, and others. If you want only to license inventions without selling their parts, assignments aren’t needed.
Most patent transfers are accomplished through a specific contract. When parties negotiate and sign their agreement, they must be recorded according to the law. Otherwise, this agreement won’t be legitimate and effective. If patent transfers aren’t recorded within 3 months from their assignment date, there will be problems because patents will be no longer sellable to third parties by assignees.
Although parties are free to adapt their documents to suit arrangements, it’s still necessary to include basic details, such as the title and the inventor. If this basic requirement isn’t met, assignments are invalidated. The key benefit of selling patents and inventions outright is a guaranteed payment at the negotiated price. The main drawback is that a 1-time payment is everything you receive for the intellectual property and you won’t receive any future profits.
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