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.
Defining Patent Assignment
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.
Requirements to Assign a Patent
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.
Searching for Patent Assignments
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.
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