When your business files a patent application, there may be several parties involved: the inventors, their manager, the company itself, the owners of the company, a patent attorney, the Patent Office, etc. But who actually owns the patent? Is there a way to make sure the owner is who you want it to be?
In the U.S., the default rule is that a patent application and any resulting patent are owned by the inventors. Furthermore, each inventor owns 100% of the patent rights, in the absence of an agreement that says otherwise. So what does that mean? Ownership of a patent gives the patent owner the right to exclude others from making, using, offering for sale, selling, or importing into the U.S. the invention claimed in the patent. It also gives each owner the right to license those rights to others, independent of the other owners. If your company wants the sole ownership of a patent, this default rule is not what you had in mind.
How do you become an owner of a patent?
Generally speaking, the inventors will own the patent rights, unless there’s an agreement to the contrary.
If you don’t want the owners to be the inventors, you’ll need to do some paperwork. A business entity can be an owner of a patent, but this generally needs to be done via a patent assignment. Also, if you want the business entity to act as the “applicant” for a patent application, then the business needs to file an executed assignment. Otherwise, the business will be unable to take an action in the application, any resulting patent, and other patent proceedings.
If you want one of the coinventors to be the sole owner of the patent rights, that is also a possibility. Again, however, you will need to do the appropriate paperwork. In the circumstance where more than one inventor exists, a patent assignment is again needed. This is so the other inventors can assign their rights to the individual who will be the owner.
What is a patent assignment?
A patent assignment is a legal document that transfers ownership interest (or a percentage of a party’s ownership interest) in the patent or application, to another party. The patent assignment is a written agreement that identifies the parties and the patent(s), and confirms the assignor’s right to assign and the assignee’s right to assume the rights and obligations, among other provisions. The assignors (e.g., inventors) must sign the assignment, although this can be done electronically.
A patent assignment can be submitted when the patent application is filed. However, ownership can change hands at any time, so assignments can be submitted as needed. The assignment should at least be filed within three months of execution, to avoid potential legal complications.
Should you record your assignment with the USPTO?
The short answer is yes. An assignment can be made of record in the assignment records of the USPTO. Recordation of the assignment provides legal notice to the public of the assignment. You are also required to inform the USPTO of your recordation details whenever you need to prove ownership or a chain of ownership.
Recordation of the assignment is a separate step, in addition to creating and signing the document. Your law firm will likely take care of this automatically, but you can instruct your patent attorney to record the assignment with the USPTO’s Assignment Recordation Branch. Recordation of the assignment provides legal notice to the public of who owns each patent, and can help prevent fraudulent transfers.
Can the ownership be changed?
During examination of a pending patent application or after the patent is granted, the original owner may transfer ownership to another entity or party, through an assignment; or the original owner may retain ownership but change its name. A simple change of name does not require a new assignment. However, if the actual underlying entity is changed, a new assignment would likely be required.
Are you sure that you are the sole owner of a patent?
You are a sole owner of a patent if the patent lists all inventors and all of the inventors assign their rights to you.
However, your patent right is not perfected, for example, if one legitimate inventor is not named in the patent and that inventor does not assign his rights. Because each inventor owns 100% right of a patent absent a written agreement, the inventor not named in the patent co-owns the patent with you and has the same rights as you.
If you have more questions about patent ownership, you should discuss the details with your patent attorney. As always, feel free to contact us here, and one of our experienced patent attorneys will be happy to speak with you.
Photograph © 2019 Dave Bourgeau
Blog Post © 2019 Kolitch Romano LLP
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DISCLAIMER: This article is intended to give the reader an overview of the topic, and does not constitute legal advice as to any particular fact situation. Facts matter, and every situation is different. In addition, laws and their interpretations change over time and the contents of this article may not reflect these changes. You are strongly advised to consult competent legal counsel regarding your particular situation.