Patent Assignment: What Is It?

A patent assignment is a part of how to patent and 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 the exclusive rights to the 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 the 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 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.

Deadline

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:

  • Letters
  • Emails
  • Faxes
  • 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 Sheet

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, Stripe, and Twilio.