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Patent Assignments in Employment Agreements – A Sometimes Overlooked, but Always Important, Component Intellectual property is often the most valuable asset a business can own.

By Peter Lando and Thomas McNulty Edited by Russell Sicklick Dec 20, 2021

Opinions expressed by Entrepreneur contributors are their own.

Businesses, of course, have a strong interest in owning intellectual property created by their employees. Intellectual property — patents, copyrights and other confidential and proprietary information including trade secrets — are often the most valuable assets a business can own, so it is important to ensure that employee developments and inventions belong to the employer. In the United States, inventions presumptively belong to the inventor, and any transfer of ownership (assignment) must be in writing to be effective. Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in intellectual property created by an employee. Employers often provide employment agreements with assignment clauses that are intended to give the employer rights in inventions made by the employee during the period of employment. These assignment clauses are often treated as mere boilerplate, yet the precise wording of these clauses can have major impacts on the effectiveness and limitations of any assignment.

Ensure that you have an assignment and not a mere promise to assign

When drafting an agreement to have an employee assign future inventions, it is vital that the language used in an assignment clause states a present-tense, actual assignment. Phrases such as hereby assign, agrees to grant and does hereby grant or that inventions shall belong to the employer and employee hereby conveys, transfers and assigns, have been deemed by the courts to be effective to transfer ownership of a future invention without the need for any subsequent agreement. Ownership effectively transfers immediately, once the invention has been made.

Assignment clauses that use future tense language, on the other hand, generally will require an additional agreement to result in a transfer of ownership of the invention, and any intellectual property ("IP") covering the invention. Terms such as will assign, agree to assign, will be assigned and the like, have been found by numerous courts to constitute nothing more than a promise or contract to assign an invention in the future, but not to serve as an actual assignment.

In addition to the wording used in the assignment clause, the language of any carve-outs should also be scrutinized. Agreements may contain a carve-out clause to exclude a new employee's prior inventions from being assigned, or to prevent assignment of inventions unrelated to the employee's work from being swept into the assignment provision. A broad, non-specific carve-out clause may prevent an employee agreement from automatically assigning inventions of that employee, even where the assignment clause includes the proper hereby assign type of language, because this leaves open the possibility that an invention is not subject to the assignment clause. This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are governed by Federal Circuit law, resolution of contractual ambiguities is governed by state law, which varies considerably regarding the admissibility of such extrinsic evidence.

Failure to obtain an automatic assignment can have negative consequences

An assignment clause that is deemed ineffective to automatically transfer ownership of an invention can create significant problems for an employer. In such circumstances, a business would not have standing to bring a patent infringement suit until it has taken the necessary steps to obtain a valid assignment. This may require the filing of a breach of contract claim against the employee to require fulfillment of the contractual obligations, including execution of assignment documents. In the interim, infringers could continue practicing the invention; and if the infringing activity has gone on long enough, the six-year statute of limitations may prohibit full recovery of damages. Further, if an inventor/employee has made only a promise to assign, and instead transfers ownership to a third party who lacks knowledge of the assignment obligation, that second transfer of ownership may well prevail, leaving the original employer with no exclusionary rights at all.

Ineffective assignment provisions can affect more than just litigation. Businesses and investors typically conduct IP due diligence when entering into transactions involving the investment in or sale of IP assets, company divisions or entire entities, and any weaknesses in assignment provisions may affect the perceived value of the IP assets and/or business being considered.

Related: The How-To: Protecting Your Intellectual Property As A Small Business

Do not count on the hired-to-invent doctrine to result in ownership of employee inventions

Some employers do not require employees to sign an agreement containing an assignment of inventions because they believe that they automatically own inventions that they paid someone to create. Under the hired-to-invent doctrine, this will only occasionally be correct. Employees or contractors hired (and paid) specifically to create a particular invention or to solve a particular problem may be deemed to have implicitly assigned their rights in the invention to the employer. This is a highly fact-based determination, however, and applies only to inventions created in response to the specific thing the employee was hired to do. A mere title of researcher or even inventor will not, standing alone, suffice to ensure ownership of inventions by the employer. Further, until a court has ruled one way or the other, an employer relying on this doctrine will not have any certainty in its rights to the invention. Should the court rule against the employer, it would lose the exclusionary rights it believed it possessed and may face an infringement lawsuit from the employee or anyone to whom the employee may have assigned the invention/patent rights.

Absent an effective assignment, an employer may obtain limited shop rights in inventions made using the employer's time, materials, facilities or equipment. Shop rights take the form of an implied license to practice the invention, precluding the employee from obtaining damages or injunctive relief on a patented invention. Shop rights are limited, however, and do not allow the employer to prevent others from competing by practicing the invention. Further, shop rights cannot be transferred via license or assignment, effectively devaluing the IP assets and, perhaps, the company.

Other considerations

In addition to having the proper hereby assign language, employment contracts should ensure that inventions, rather than just patents or patent applications, are subject to the assignment clause. Language stating that all inventions, improvements, discoveries and the like, whether or not patentable or copyrightable, are subject to the assignment, ensures that information that could be protected through other regimes, such as trade secrets, automatically become the property of the employer.

Related: Securing Your IP: The Two Key Legal Documents Every UAE ...

Intellectual property has taken on an ever-increasing role in determining the value of a business. A company's ability to develop and protect its intellectual property is a key factor in its future success. Given this, it is important that businesses recognize that assignment provisions of employment agreements are not mere boilerplate, but instead may be one of the most important legal provisions that ultimately can impact not only an employment arrangement, but the value of the business itself.

Related: Top 5 Intellectual-Property Challenges Businesses Face

*The authors would like to thank Lando & Anastasi summer intern Tyler Gruttadauria for his contributions to this article.

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29 Jan 2024

Patent Assignment: How to Transfer Ownership of a Patent

By Michael K. Henry, Ph.D.

Intellectual Property
Patent Prosecution

This is the second in a two-part blog series on owning and transferring the rights to a patent. ( Read part one here. )

As we discussed in the first post in this series, patent owners enjoy important legal and commercial benefits: They have the right to exclude others from making, selling, using or importing the claimed invention, and to claim damages from anyone who infringes their patent.

However, a business entity can own a patent only if the inventors have assigned the patent rights to the business entity. So if your employees are creating valuable IP on behalf of your company, it’s important to get the patent assignment right, to ensure that your business is the patent owner.

In this post, we’ll take a closer look at what a patent assignment even is — and the best practices for approaching the process. But remember, assignment (or transfer of ownership) is a function of state law, so there might be some variation by state in how all this gets treated.

What Is a Patent Assignment and Why Does it Matter?

A patent assignment is an agreement where one entity (the “assignor”) transfers all or part of their right, title and interest in a patent or application to another entity (the “assignee”).

In simpler terms, the assignee receives the original owner’s interest and gains the exclusive rights to pursue patent protection (through filing and prosecuting patent applications), and also to license and enforce the patent.

Ideally, your business should own its patents if it wants to enjoy the benefits of the patent rights. But under U.S. law , only an inventor or an assignee can own a patent — and businesses cannot be listed as an inventor. Accordingly, patent assignment is the legal mechanism that transfers ownership from the inventor to your business.

Patent Assignment vs. Licensing

Keep in mind that an assignment is different from a license. The difference is analogous to selling versus renting a house.

In a license agreement, the patent owner (the “licensor”) gives another entity (the “licensee”) permission to use the patented technology, while the patent owner retains ownership. Like a property rental, a patent license contemplates an ongoing relationship between the licensor and licensee.

In a patent assignment, the original owner permanently transfers its ownership to another entity. Like a property sale, a patent assignment is a permanent transfer of legal rights.

U sing Employment Agreements to Transfer Patent Ownership

Before your employees begin developing IP, implement strong hiring policies that ensure your IP rights will be legally enforceable in future.

If you’re bringing on a new employee, have them sign an employment agreement that establishes up front what IP the company owns — typically, anything the employee invents while under your employment. This part of an employment agreement is often presented as a self-contained document, and referred to as a “Pre-Invention Assignment Agreement” (PIAA).

The employment agreement should include the following provisions:

Advance assignment of any IP created while employed by your company, or using your company’s resources
An obligation to disclose any IP created while employed by your company, or using your company’s resources
An ongoing obligation to provide necessary information and execute documents related to the IP they created while employed, even after their employment ends
An obligation not to disclose confidential information to third parties, including when the employee moves on to a new employer

To track the IP your employees create, encourage your employees to document their contributions by completing invention disclosure records .

But the paperwork can be quite involved, which is why your employment policies should also include incentives to create and disclose valuable IP .

Drafting Agreements for Non-Employees

Some of the innovators working for your business might not have a formal employer-employee relationship with the business. If you don’t make the appropriate arrangements beforehand, this could complicate patent assignments. Keep an eye out for the following staffing arrangements:

Independent contractors: Some inventors may be self-employed, or they may be employed by one of your service providers.
Joint collaborators: Some inventors may be employed by, say, a subsidiary or service company instead of your company.
Anyone who did work through an educational institution : For example, Ph.D. candidates may not be employees of either their sponsoring institution or your company.

In these cases, you can still draft contractor or collaborator agreements using the same terms outlined above. Make sure the individual innovator signs it before beginning any work on behalf of your company.

O btaining Written Assignments for New Patent Applications

In addition to getting signed employment agreements, you should also get a written assignments for each new patent application when it’s filed, in order to memorialize ownership of the specific patent property.

Don’t rely exclusively on the employment agreement to prove ownership:

The employment agreement might contain confidential terms, so you don’t want to record them with the patent office
Because employment agreements are executed before beginning the process of developing the invention, they won’t clearly establish what specific patent applications are being assigned

While you can execute the formal assignment for each patent application after the application has been filed, an inventor or co-inventor who no longer works for the company might refuse to execute the assignment.

As such, we recommend executing the assignment before filing, to show ownership as of the filing date and avoid complications (like getting signatures from estranged inventors).

How to Execute a Written Patent Agreement

Well-executed invention assignments should:

Be in writing: Oral agreements to assign patent rights are typically not enforceable in the United States
Clearly identify all parties: Include the names, addresses, and relationship of the assignor(s) and assignee
Clearly identify the patent being assigned: State the patent or patent application number, title, inventors, and filing date
Be signed by the assignors
Be notarized : If notarization isn’t possible, have one or two witnesses attest to the signatures

Recording a Patent Assignment With the USPTO

Without a recorded assignment with the U.S. patent office, someone else could claim ownership of the issued patent, and you could even lose your rights in the issued patent in some cases.

So the patent owner (the Assignee) should should record the assignment through the USPTO’s Assignment Recordation Branch . They can use the Electronic Patent Assignment System (EPAS) to file a Recordation Cover Sheet along with a copy of the actual patent assignment agreement.

They should submit this paperwork within three months of the assignment’s date. If it’s recorded electronically, the USPTO won’t charge a recordation fee .

Need to check who owns a patent? The USPTO website publicly lists all information about a patent’s current and previous assignments.

When Would I Need to Execute a New Assignment for a Related Application?

You’ll need only one patent assignment per patent application, unless new matter is introduced in a new filing (e.g., in a continuation-in-part , or in a non-provisional application that adds new matter to a provisional application ). In that case, you’ll need an additional assignment to cover the new matter — even if it was developed by the same inventors.

What If an Investor Won’t Sign the Written Assignment?

If you can’t get an inventor to sign an invention assignment, you can still move forward with a patent application — but you’ll need to document your ownership. To document ownership, you can often rely on an employee agreement , company policy , invention disclosure , or other employment-related documentation.

D o I Need to Record My Assignments in Foreign Countries?

Most assignments transfer all rights, title, and interest in all patent rights throughout the world.

But in some countries, the assignment might not be legally effective until the assignment has been recorded in that country — meaning that the assignee can’t enforce the patent rights, or claim damages for any infringement that takes place before the recordation.

And there might be additional formal requirements that aren’t typically required in the United States. For example, some countries might require a transfer between companies to be signed by both parties, and must contain one or both parties’ addresses.

If you’re assigning patents issued by a foreign country, consult a patent attorney in that country to find out what’s required to properly document the transfer of ownership.

N eed Help With Your Patent Assignments?

Crafting robust assignment agreements is essential to ensuring the proper transfer of patent ownership. An experienced patent professional can help you to prepare legally enforceable documentation.

Henry Patent Law Firm has worked with tech businesses of all sizes to execute patent assignments — contact us now to learn more.

GOT A QUESTION? Whether you want to know more about the patent process or think we might be a good fit for your needs – we’d love to hear from you!

Michael K. Henry, Ph.D.

Michael K. Henry, Ph.D., is a principal and the firm’s founding member. He specializes in creating comprehensive, growth-oriented IP strategies for early-stage tech companies.

10 Jan 2024

Geothermal Energy: An Overview of the Patent Landscape

By Michael Henry

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Related Practices & Jurisdictions

Intellectual Property
Labor Employment
Federal Circuit / U.S. Court of Spec. Jurisdiction

Manufacturers have an inherent interest in owning the intellectual property rights created by their employees in the course of performing their jobs. Employees are the engine that drives a manufacturer’s innovations, but employees’ potentially patentable innovations only become the employer’s intellectual property if the proper patent assignment language is used. All employees that may develop potentially patentable innovations during the course of their employment should be required to sign contracts transferring ownership of all intellectual property rights to their employer. This may even include factory employees who submit ideas for product improvements through an employee suggestion program. However, if employee patent assignments are not carefully crafted, manufacturers may end up in a nightmare situation – believing they own a valuable patent invented by an employee when, in reality, it belongs to the employee.

In the United States, patent rights vest in the inventor, not the inventor’s employer. In order for an employer to own patent rights to innovations created by an employee, those rights must be transferred by an assignment to the employer. To do so, an employee patent assignment must contain language that clearly indicates a present transfer of all patent rights to current and future inventions from the employee to the employer. The magic words for the assignment of patent rights in employment contracts are “I do hereby assign” or other language indicating a present transfer of patent rights from the employee to the employer. A promise that the employee “agrees to assign” is not sufficient to assign the employee’s patent rights to the employer. The contrast between the results of these two phrases is clearly demonstrated through two cases, IPVenture, Inc. v. Prostar Computer, Inc. , and Picture Patents, LLC v. Aeropostale, Inc.

IP Venture: Promise or Agreement to Assign in the Future Does Not Assign Employee Patent Rights to Employer

In a cautionary tale for employers, the court in IPVenture decided that the patent assignment language in Douglass Thomas’s employment agreement was not sufficient to assign his patent rights to his employer. Thomas signed an employment agreement with Hewlett-Packard (“HP”) in which “Proprietary Developments” were defined as “inventions and discoveries…that are conceived or made by me alone or with others while I am employed by HP; that relate to the research and development of…HP, or result from work performed by me for HP…are the sole property of HP” and in which Mr. Thomas stated, “I agree…to assign them to HP.”

While employed by HP, Thomas filed a patent in his name for a thermal and power management system for computers. Thomas later started IPVenture, and sued several parties for infringing the patent. The defendants moved to dismiss for lack of standing, alleging that IPVenture did not own the patent.

In view of established precedent, the court determined that the “I agree…to assign” language in Thomas’ employment agreement was an agreement to assign patent rights in the future and was not sufficient to assign the patent from Thomas to HP. Accordingly, Thomas was found to be the owner of the patent, not HP.

Picture Patents: Only a Present Transfer of Patent Rights Assigns Employee Patent Rights to Employer

In contrast, Picture Patents provides a path for how an employer should secure the patent rights in inventions developed by their employees. Michelle Baker signed an intellectual property agreement with her employer, International Business Machines Corp. (“IBM”). The agreement stated “I hereby assign to IBM my entire right, title, and interest in any idea, invention, design…or other work of authorship” and applied to any intellectual property she created while employed by IBM that related to the actual or anticipated business of IBM. Prior to working for IBM, Baker had conceived of an improved computer and then refined the computer system during work hours and using IBM’s equipment and resources. After Baker left IBM, she filed for three patents in her name for the computer system.

Baker eventually sued several parties for patent infringement. Similarly to the defendants in IPVenture , the defendants moved to dismiss on the grounds that IBM, not Baker, owned the patents. The court agreed with the defendants, saying that the words “I hereby assign” indicated a present assignment of current and future patent rights from Baker to IBM and that the subject matter of the patents was clearly covered by Baker’s agreement with IBM. The court found that a present assignment of patent rights in a future invention not yet invented by the employee divests the employee of ownership of those patent rights; once the invention is made, ownership automatically transfers to the assignee.

Because of these and other similar decisions, employee patent assignments should include “I do hereby assign” or other language indicating a present transfer of the employee’s current and future patent rights to ensure that employee-created patent rights are validly assigned to the employer. An agreement to assign in the future, as indicated by language like “I agree to assign” is not by itself sufficient to assign the employee’s patents rights to the employer. Unless employee patent assignments are drafted with care, manufacturers will find themselves in the unenviable position of not owning patent rights to their employees’ work.

* Please note Foley Summer Associate Lea Gulotta was a contributing author of this post. The Manufacturing Industry Advisor team thanks her for her contributions.

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When a Promise Isn’t Enough – Crafting Proper Employee Patent Assignments

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Patent Assignment: How to Transfer Ownership, Search for Change, and More

Navigating the world of patents can be a daunting task, especially when it comes to transferring ownership. But why is patent assignment so important, and how can you ensure a smooth process? In this blog post, we will delve into the intricacies of patent assignment, providing you with a comprehensive guide on transferring ownership, understanding the difference between assignment and licensing, and much more.

From establishing patent ownership through employment agreements to handling international patent assignments and searching for patent assignments, we will equip you with the essential knowledge to confidently approach patent assignments and protect your valuable intellectual property.

A woman and a man looking at a microscope.

Key Takeaways

Patent assignment is an important process for businesses to ensure rightful ownership of a patent and comply with USPTO guidelines.
Creating clear agreements, executing, and recording assignments, handling reluctant inventors, and considering international laws & requirements when assigning patents internationally. All require legal assistance from experienced patent attorneys.
Searching the USPTO’s Patent Assignment Search tool using various identifiers helps draft solid agreements for successful transfer of ownership.

Understanding Patent Assignment: Importance and Process

The transfer of patent ownership from one entity to another, known as patent assignment, enables the new owner to benefit from, utilize, and enforce the patent rights. As a patent owner, you possess the exclusive right to prevent others from manufacturing, selling, or using your invention without your consent. Businesses must assign patent rights to inventors, ensuring that the business holds rightful ownership.

Before finalizing a patent assignment agreement, one should consider the proposed terms and provisions and ensure they comply with the United States Patent and Trademark Office (USPTO) guidelines. Assignees can benefit from revenue streams through royalty payments and exclusive access to income from the assigned patent application or granted patent. To document ownership of a particular patent property, secure a written assignment for each new patent application, as only one patent assignment can be recorded for each application.

Executing the assignment before filing is recommended, as this demonstrates ownership as of the filing date and helps avoid potential complications. Relying solely on employment agreements to demonstrate ownership may be insufficient. It can lead to situations where an inventor or co-inventor no longer employed by the company declines to sign the assignment for one or more patent applications.

While patent assignments are a critical aspect of intellectual property management, they are part of a larger process in the patent lifecycle. Before considering the complexities of patent assignments, it’s crucial to understand the

Difference Between Patent Assignment and Licensing

Although patent assignment and licensing involve the transfer of patent rights, they serve distinct purposes and have different implications for ownership. Patent assignment refers to the formal process of transferring ownership of a patent from the patent applicant or current owner to another party, with the agreement of both parties.

On the other hand, patent licensing involves the granting of permission by the patent owner to use the patent while the owner retains their ownership rights. The primary distinction between patent assignment and licensing lies in the transfer of ownership. While patent assignment involves a complete transfer of ownership rights, licensing allows the patent owner to maintain ownership and grant authorization to another party to utilize the patent .

Understanding this distinction is necessary as a mere employment agreement may not be enough to prove ownership in all situations.

Establishing Patent Ownership Through Employment Agreements

Establishing intellectual property rights, such as patent ownership, holds significant importance as it provides legal protection and exclusive rights to the patent owners, both in the United States and in foreign countries where the patent is registered. One way to determine patent ownership is through employment agreements . By incorporating provisions that require employees to assign any inventions they create to the employer, the employer can ensure they have the legal right to the invention and protect it from infringement.

To effectively establish patent ownership through employment agreements, provisions for invention disclosure should be included, requiring the employee to divulge any inventions they create to the employer. Additionally, the agreement should comprise incentives for creating valuable intellectual property, such as bonuses or royalty payments. This approach safeguards the employer’s interests and encourages employees to innovate and contribute to the company’s intellectual property portfolio.

Drafting Effective Agreements for Non-Employees

Creating clear agreements for non-employees like contractors or collaborators is important to facilitate smooth patent assignments and avoid complications. Examples of effective agreements for non-employees include non-disclosure agreements (NDAs), non-compete agreements, and non-solicitation agreements. These agreements, along with a properly executed assignment document, can help facilitate a seamless patent assignment process and protect the interests of both parties.

Effective agreements for non-employees protect confidential information, deter competition, and limit the solicitation of clients or employees. By establishing clear agreements and understanding the rights and obligations of all parties involved, potential issues related to patent assignments can be avoided, ensuring a successful transfer of ownership.

Executing and Recording Patent Assignments

Execution and recording of patent assignments properly are necessary to avoid ownership disputes and ensure seamless rights transfer. The USPTO’s Electronic Patent Assignment System (EPAS) can be used to:

Create and submit a Patent Assignment Recordation Coversheet
Complete the coversheet using online web forms
Submit legal documentation in the form of black and white TIFF or PDF files via the internet

This process helps streamline the assignment process and ensures all necessary documentation is properly recorded.

Failure to register an assignment with the USPTO may result in another party claiming ownership of the issued patent. It may lead to losing rights in the issued patent in certain circumstances. A valid written patent assignment agreement must be in writing, and the notarization of the signatures provides additional security. It is recommended that the paperwork for recording a patent assignment be submitted within three months of the assignment’s date to avoid potential complications.

Patent assignments are a vital component in the management and utilization of intellectual property rights. They provide a mechanism for the transfer of ownership, enabling businesses and individuals to align their patent portfolios with their strategic objectives. While exploring patent assignments, it’s also beneficial to explore into the tinges of

For further assistance and inquiries regarding filing electronic patent assignments, the Assignment Recordation Branch Customer Service Desk can be contacted at 571-272-3350 during business hours.

Handling Reluctant Inventors

Sometimes, an inventor may refuse to sign a written assignment for various reasons, such as a lack of trust in the assignee, inadequate comprehension of the assignment process, or a desire to maintain control over the invention. In such situations, alternative methods can be employed to establish ownership and protect the parties’ rights.

One solution to establish ownership when an inventor declines to sign a written assignment is to rely on employment agreements, company policies, invention disclosures, or other employment-related documentation. Other methods may include obtaining a signed assignment from the inventor’s employer, a signed assignment from the inventor’s heirs, or a signed assignment from the inventor’s estate.

In case of difficulties, numerous resources are available to facilitate patent assignments, including legal aid, online resources, and professional organizations. By exploring these options and seeking appropriate guidance, you can navigate the complexities of patent assignments and ensure a successful transfer of ownership.

International Patent Assignments: Considerations and Requirements

Navigating international patent assignments may present additional challenges, as different countries may have specific formalities and recording requirements that must be considered. When dealing with an international patent assignment, one should consider the laws of the involved countries and any required formalities and recording requirements.

Additional factors to consider when dealing with international patent assignments include:

The language of the agreement
Potential tax implications
The potential effect of the assignment on the patent’s legitimacy, enforceability, and priority rights.

Due to the complexities involved in international patent assignments, seeking counsel from a patent attorney for guidance is highly recommended.

Patent assignments are a critical aspect of intellectual property management, requiring careful consideration and strategic planning. These assignments, when executed properly, can enhance the value of a patent portfolio and provide significant commercial benefits. However, the process involves more than just transferring rights; it requires a deep understanding of the entire patent lifecycle, including the potential for changes and modifications post-grant.

Searching for Patent Assignments: Tools and Techniques

To find information on recorded patent assignments, the USPTO’s Patent Assignment Search tool can be utilized to search the database containing all registered Patent Assignment information from 1980 to the present. Searches can be performed using various identifiers, such as:

The assignor’s or assignee’s name
The patent number
The application number
The publication number
Other identifying information.

The USPTO patent assignment database contains all assignments that have been recorded since August 1980, providing a comprehensive resource for identifying and verifying patent assignments. For additional assistance, the Assignment Recordation Branch Customer Service Desk can be reached at +1 571-272-3350 during business hours to provide further guidance on searching for patent assignments.

Crafting a Solid Patent Assignment Agreement

An efficiently crafted patent assignment agreement is key to ensuring a smooth transfer of ownership and protecting both parties’ interests. Key components of a solid patent assignment agreement include:

Identifying information
Patent details
Transfer of rights
Scope of agreement
Consideration
Governing law

By including each of these components in a patent assignment agreement, you can guarantee that the transfer of patent ownership is conducted in a legally binding manner, without any discrepancies, and prevent potential disputes or challenges to the validity of the assignment in the future.

By carefully constructing a comprehensive assignment agreement that precisely outlines the rights and obligations of both parties, you can safeguard the interests of the assignor and assignee and ensure a seamless transfer ownership process.

Strategic Considerations in Patent Assignments

In the realm of intellectual property, patent assignments are more than mere administrative tasks; they are strategic maneuvers that can significantly influence a company’s innovation trajectory and competitive edge. The decision to assign a patent, whether it’s due to a corporate restructuring, a sale, or a strategic partnership, can have far-reaching implications on a company’s future growth and its ability to innovate.

Effective patent portfolio management is key to maximizing the value of your assets, including patent assignments. This approach to managing your patents isn’t just about the number of patents in your portfolio, but rather about ensuring that each assignment aligns with your broader business objectives. A well-managed portfolio considers the quality of patents, their relevance to your current and future business plans, and their potential for commercialization or strategic partnerships.

For instance, when considering an assignment, it’s crucial to evaluate not just the immediate financial gain but also the long-term impact on your company’s market position. Will this assignment strengthen your core business areas? Does it open up new avenues for innovation or collaboration? These are the types of questions that should guide your decision-making process.

Moreover, in the dynamic landscape of technology and innovation, agility in patent portfolio management is indispensable. This means regularly reviewing and reassessing your portfolio to ensure it remains aligned with your evolving business strategies. It also involves being proactive in identifying patents that are no longer critical to your business and could be better leveraged through assignments or licensing agreements.

Legal Assistance for Patent Assignments

Considering the complexities in patent assignments, it’s beneficial to seek legal assistance from experienced patent attorneys to ensure correct ownership transfer and protect your valuable intellectual property. Legal experts can guide and advise on the legal requirements and procedures involved in patent assignments, ensuring adherence to applicable laws and regulations.

Patent assignments, while pivotal in the realm of intellectual property management, come with their own set of legal intricacies. These transactions are not just about transferring rights; they involve navigating through a complex legal landscape to ensure that the transfer is valid, enforceable, and beneficial for all parties involved. A key aspect of this process is understanding the legal implications that can arise post-assignment, particularly in terms of patent enforcement and defense.

Legal requirements and procedures associated with patent assignments may vary depending on the jurisdiction in which the assignment occurs, making it even more crucial to consult a patent attorney to navigate these complexities. Experienced patent attorneys can be found through referrals from other attorneys, online directories, or by searching for local patent attorneys in your area.

Why are Patent Assignments Important?

Business Moves: Transferring patents during company mergers or acquisitions .
Licensing: Allowing another party to use the patent without giving away ownership.
Team Changes: Keeping the patent with the company if an inventor departs.

How Ana Law Can Assist with Patent Assignments:

Due Diligence: We check the patent’s history to ensure clear ownership without any disputes.
Assignment Agreement: We draft a clear document detailing the transfer terms.
USPTO Submission: ** After the agreement is executed, it’s key to record the transfer at the USPTO’s Assignment Recordation Branch.

Benefits to Recording Patent Assignments:

Makes the ownership change public.
Confirms the new owner’s rights legally.

Benefits of Due Diligence:

Make sure the current owner truly has the patent rights.
Find and fix any past issues or disagreements.
Avoid future legal problems.

After the Patent Assignment:

The new owner must guard and use the patent rights.
All parties need to stick to the agreement terms.

In conclusion, understanding and navigating the world of patent assignments is essential for protecting your valuable intellectual property and ensuring a smooth transfer of ownership. From establishing patent ownership through employment agreements to properly executing and recording patent assignments, this comprehensive guide has provided you with the knowledge and tools to confidently approach patent assignment matters.

As you embark on your journey through the realm of patent assignments, remember to consult experienced patent attorneys and seek legal assistance when needed. By doing so, you can overcome the complexities of patent assignments and secure the exclusive rights to your intellectual property, fostering innovation and success in your endeavors.

Remember: Multiple aspects of patent assignments need careful attention. Ana Law provides a straightforward and thorough service to guide you through.

Frequently Asked Questions

What is a patent assignment?

A patent assignment is a legal transfer of ownership rights from one party to another, allowing an inventor to give control of their patent to someone else. The assignor agrees to relinquish all their rights to the patent, and in exchange, the assignee can benefit from and enforce it.

Who can record a patent assignment?

The United States Patent and Trademark Office (USPTO) is authorized to record patent and trademark assignment documents, including transfers of properties, liens, licenses, assignments of interest, security interests, mergers, and explanations of transactions.

Is a patent assignment a contract?

Yes, a patent assignment is a contract. It requires several key provisions to be both valid and effective. These provisions include the parties to the contract, the patent or patents being assigned, the consideration for the assignment, and the date of the

Does a patent assignment need to be witnessed?

A patent assignment must be witnessed to ensure its signatures are valid. Notarization or witnessing by two non-inventor witnesses is recommended for this purpose.

What is the difference between a patent assignment and a patent license?

A patent assignment involves the transfer of ownership, while a patent license grants permission to use the patent without transferring ownership.

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Imagine That IP Law Blog

Benjamin Franklin is credited with coining the axiom that "an ounce of prevention is worth a pound of cure." Allegedly, Franklin actually made the statement in connection with fire safety, which was an avocation for him. Today, the axiom applies perfectly to corporate efforts to manage intellectual property (IP) issues. Many companies rely on old proprietary rights forms or use generic forms collected by the human resource department (HR) with little thought given to downstream consequences.

This article advocates for having in-house or retained counsel make periodic reviews of corporate employment agreements and for having counsel involved in any new hire where there is strong likelihood that the position will lead to the creation of IP. Furthermore, interviewing a potential new hire with prior IP experience for a position that is expected to generate IP should receive special attention in order to avoid conflicts with a prior employer and any prior agreement concerning IP.

The IP provisions in employment agreements frequently include a holdover or surviving provision that obligates the departing employee to assign post-employment inventions that have a tangential relationship to the employer's business back to the employer. These provisions present several problems.

For the new employer, this information should be gathered before hiring the potential employee in order to evaluate the possibility of a conflict with a prior employer and determine if a prior agreement creates any limitation on the potential employer's ability to engage in the work of the proposed position. In requesting this information, it is important to have the potential employee identify all prior inventions, whether or not patented and/or assigned to another company or previous employer. If the individual is hired, this information should be documented in the new employment agreement.

For the prior employer, the issue turns on whether the provision surviving the prior employment is reasonable and enforceable. Many jurisdictions view a surviving assignment provision as a post-employment restriction and analyze them in a manner similar to the approach taken with non-compete agreements. Namely, courts consider whether the time and scope of the agreement provisions are reasonable and whether the provisions unduly hinder the employee's ability to work and use acquired skills.

The Supreme Court of New Jersey in Ingersoll-Rand v. Ciavatta, 542 A.2d 879 (N.J. 1988) provided a helpful overview of the issues with assignment provisions from prior employment agreements that survive the previous employment. In Ingersoll-Rand, the Supreme Court of New Jersey included the following instructive footnote:

"As an aid to employer's drafting future holdover agreements, we emphasize the following language of Paragraph 1(c) [Ingersoll-Rand agreement] that applies the agreement to 'inventions, copyrights and/or designs ... if conceived as a result of and is attributable to work done during such employment and relates to a method, substance, machine, article of manufacture or improvements therein within the scope of the business of the company or any of its affiliates.'" Ingersoll-Rand has 30 divisions worldwide, so arguably the clause could apply to activities outside the scope of Ciavatta's employment but within the scope of any of those numerous divisions. We caution employers that such language appears to be overly broad, and, hence, would be unenforceable."

The above caution is something that a new employer should keep in mind when evaluating a potential employee's prior agreement. Note how the risk is allocated based on the reasonableness of the provision, and a new employer's possible defense in hiring the employee. If the provision appears to be reasonable on its face, could enforcement of the provision hinder the employee in the proposed position? If the provision does not seem reasonable, is the potential hire important enough that the new employer is willing to litigate the issue?

Having cleared the pre-employment hurdles, an employment agreement should consider and specifically address anticipated IP-related issues. In the words of Franklin, a solid agreement is the recommended "ounce of prevention."

Consider the case of Aetna-Standard Engineering v. Rowland, 493 A.2d 1375 (Pa. Super. Ct. 1985) . In that case, a designer was hired and was subsequently tasked with improving a given machine and, along with his supervisor, was successful. The parties did not have any agreement regarding ownership or assignment of the invention in place. The employer attempted to force the employee to assign the patent, but was rejected by a lower court and affirmed on appeal.

In Aetna-Standard, the inventor had training and engineering experience when he was hired, but he maintained that he had no contract or obligation, written or oral, requiring assignment of any invention to Aetna. He refused to assign his invention. When he was given a specific task that resulted in the invention for which a patent was filed, he received no additional compensation and was only instructed to develop equipment for an Aetna project contract with a third party. Ultimately, in the absence of an agreement, Rowland did not have to assign the patent to Aetna and retained his co-inventor rights. However, since Rowland's supervisor was a co-inventor who had assigned his interest to Aetna, Aetna was at least a co-owner of the patent with Rowland and each was free to use the patent without any obligation to the other. Aetna ultimately received an expensive "pound of cure."

In 2011, the Supreme Court, in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, 563 U.S. 776 (2011) , reiterated the long and well-established principles that the rights to an invention belong to the inventor and absent an express grant of those rights to the employer, the employer does not have rights in the invention. The principle relied upon dates back to a Supreme Court case, United States v. Dubilier Condenser, 289 U.S. 178 (1933) .

When considering whether an employee has a duty to assign inventions to their employer, courts also consider the inventor-employee's refusal to sign employment agreement documents with IP assignment provisions. The failure to address the issue can be fatal to a later effort to force an assignment under another theory of ownership. See Banks v. Unisys, 228 F.3d 1357 (Fed. Cir. 2000) . Stated in different terms, "if the scope of an employee's work is generalized within a field, a court will not presume an employee's duty to assign his employer patents, absent a contract. Peregrine Semiconductor v. RF Micro Devices, No. 3:12-CV-0911-H (S.D. Cal. Jan. 8, 2014). In that case, Peregrine was denied a preliminary injunction because it had no contract assigning employee inventions to the company, and could not show that the inventor was bound under the "hired-to-invent" doctrine. The "hired-to-invent" doctrine is an equitable one that generally states that if an employee is hired to design and develop new instrumentalities in order to solve a particular problem, the employer has an equitable right to practice the inventions devised by the employee in solving that problem; see also Standard Parts v. Peck, 264 U.S. 52, 59-60 (1924). The "hired-to-invent" doctrine does not, however, transfer legal title to a patent. An agreement transferring all rights in the invention to the employer is always preferred.

The language of an IP assignment provision included with an employment agreement is critical. Assignment provisions that have express, nonconditional language are likely to be enforced. Future, contingent provisions are problematic. Accordingly, there is a significant difference between " I will assign" and invention, and " I do hereby assign" the invention.

This was demonstrated in the case of DDB Technologies v. MLB Advanced Media, 517 F.3d 1284 (Fed. Cir. 2008) . The DDB case involved a surviving IP provision in an agreement that included the following language: "Employee shall promptly furnish to company a complete record of any and all technological ideas, inventions and improvements, whether patentable or not, which he, solely or jointly, may conceive, make or first disclose during the period of his employment with [Schlumberger]. Employee agrees to and does hereby grant and assign to Company or its nominee his entire right, title and interest in and to ideas, inventions and improvements coming within the scope of Paragraph 3:" The court followed the general rule that when the employment agreement expressly grants rights in future inventions to the employer, no further act is required once an invention comes into being, and the transfer of title occurs by operation of law.

In contrast, as noted in Stanford University v. Roche Molecular Systems, 583 F.3d 832, 842 (Fed. Cir. 2009) , an agreement to assign an invention in the future (" I will assign") has been interpreted by the U.S. Court of Appeals for the Federal Circuit as conveying mere equitable title. As a mere promise to assign rights in the future, such language requires a subsequent assignment to transfer legal title.

Thus, IP agreement language that creates a promise to assign future IP does not readily resolve the ownership issue. In IpVenture v. Prostar Computer, 503 F.3d 1324 (Fed. Cir. 2007) , the Federal Circuit considered the following language: "Such Proprietary Developments are the sole property of HP, and I agree: a. to disclose them promptly to HP; b. to assign them to HP; and c. to execute all documents and cooperate with HP in all necessary activities to obtain patent, copyright, mask work, and/or trade secret protection in all countries, HP to pay the expenses." The Federal Circuit concluded that it was only an agreement to assign at a later date, rather than a present assignment. Accordingly, the agreement language required a subsequent written instrument to vest title in the employer. In the recent case of Advanced Video Technologies v. HTC, 879 F.3d 1314 (Fed. Cir. 2018) , the Federal Circuit again held that employment agreement assignment language using the terms " will assign" is a mere promise to assign, and it is not a present assignment transferring title by operation of law.

The primary takeaways for employers are as follows: when hiring someone that might generate IP, be sure to research all prior agreements and work experience that could impact the potential employee's duty and/or ability to assign inventions to either the prior employer or potential new employer; and make sure that company employment agreements include language that presently assigns IP by operation of law; and, even if corporate documents have acceptable present assignment language, obtain separate signed assignment agreements, prepared for recordation, for each invention. Separate assignment documents are straight forward and can be recorded with the U.S. Patent and Trademark Office without concern for private company information that might be in an employment agreement.

As the cited cases clearly demonstrate, the attention paid to these issues ahead of time is more than " an ounce of prevention."

Tony draws on his years of in-house and private practice experience to analyze his client's business model and objectives and craft a strategy to achieve the client's goals.

With more than 40 years of experience in all aspects of IP ...

Michael’s natural and engaging approach in laying out alternatives and potential outcomes is genuinely appreciated by clients. He advances their causes with all-encompassing intellectual property portfolio management ...

Do the Paperwork: How Properly Executing Patent Assignments Can Win Your Case

Properly prepared patent assignments and IP assignment clauses in employment agreements can play a critical role in an IPR proceeding — for example, by preventing your own patent applications from becoming invalidating prior art under 35 U.S.C. § 103(c).

In Marvell Semiconductor, Inc. v. Intellectual Ventures I LLC , Intellectual Ventures (the patent owner) faced an obviousness challenge to one of its patents, based primarily on an earlier filed patent that was prior art under section 102(e). In response, the patent owner sought to disqualify that prior art patent under section 103(c). That section makes clear that such prior art “shall not preclude patentability” when the prior art and the patent at issue were “at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.” However, the patent owner in this case faced several significant evidentiary hurdles to disqualify that prior art, including a complicated corporate holdings structure, non-existent assignment records and conflicting evidence. Even though the patent owner was ultimately successful, this case came down to an interpretation of Florida common law to determine whether section 103(c) applied, because of the lack of clear assignment documents and employment agreements.

Thus, Marvell Semiconductor illustrates the wisdom in crafting and continuously executing an assignment strategy for patent assets, and how the right strategy will protect patent owners from being challenged with their own patents in IPR proceedings.

The Facts of Marvell Semiconductor

Marvell Semiconductor (the petitioner) filed a petition challenging the validity of U.S. Patent No. 6,754,195 (the ’195 Patent), which lists two inventors: Mark A. Webster and Michael J. Seals. The primary reference for their petition was U.S. Patent No. 7,274,652, which also lists Webster as one of the inventors (the Webster patent). The Webster patent was filed less than a month before the ’195 Patent, making it prior art under section 102(e). The petitioner asserted that the Webster patent, combined with other prior art, rendered the challenged claims of the ’195 Patent obvious under 35 U.S.C. § 103.

In response, the patent owner sought to disqualify the Webster patent as prior art pursuant to section 103(c), and the case quickly focused on one issue: whether Webster and Seals, at the time of the invention of the ’195 Patent, had assigned or were under an obligation to assign the ’195 patent to the “same person” that owned the Webster Patent. This issue became even more complicated as the “person” at issue was a complex corporation with multiple subsidiaries that changed their names around the key dates at issue in the case. In view of this complexity, the Patent Trial and Appeal Board (PTAB) granted the patent owner’s request for additional discovery to show common ownership, including depositions of Webster and Seals, and a production of documents from the corporation.

Despite the grant of additional discovery, the patent owner was unable to prove the existence of a written assignment for the ’195 patent during the critical time period and was also unable to prove the existence of an employment agreement requiring Webster and Seals to assign the ’195 patent to their employer. Thus, because of the lack of executed assignments or employment agreements, the Webster patent seemed poised to invalidate the ’195 Patent.

Fortunately for the patent owner in this case, the PTAB ultimately found that Florida state common law obligated Webster and Seals to assign the ’195 Patent to the same subsidiary that owned the Webster patent. In particular, and after wrestling with the complex corporate structure and conflicting evidence, the PTAB found that both Webster and Seals were employed by the subsidiary that owned the Webster patent at the time of the invention of the ’195 Patent. The PTAB further concluded that the nature of their employment, under Florida law, created an obligation to assign their patent to that entity. As a result, the Webster patent was disqualified as prior art to the ’195 Patent.

Undeterred, at oral argument the petitioner referred to an assignment document, executed by Webster and Seals, that purported to assign their rights in the ’195 Patent to a different subsidiary. However, the PTAB concluded that with this assignment, the inventors were simply “assigning whatever rights they held in the invention to the assignee.” As a result, this assignment “does not conflict” with the inventor’s earlier obligation to assign the ’195 Patent to their employer under Florida common law, and the PTAB was able to sidestep the issue of whether assigning patents to different subsidiaries will negate the effects of section 103(c).

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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D. Mass. IP Litigation Blog

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IP Insights

A Potential and Unintended Consequence of ‘Routine’ Patent Assignments

April 20, 2022

By: Thomas P. McNulty and Peter C. Lando

This article was originally published on Entrepreneur.com , March 28, 2022.

Patents and patent applications are frequently assigned from one entity to another, for example between inventors and their employers or between companies seeking to collaborate on a project. Like any other contract, there are occasionally disputes between the parties regarding the agreement contemplated by the patent assignment. These instances may reflect the different intentions or understandings of the parties at the time the agreement was entered into or may come about by the diverging interests of the parties over time. Some of these disputes have found their way to the Supreme Court. For example, the Court has held that an inventor must expressly grant his or her rights in an invention, and that standard employment agreement language that includes a promise to assign future inventions did not result in an immediate assignment of future inventions and could be superseded by an assignment using present-tense language.

A recent decision of the Supreme Court draws attention to another issue that may arise with a “routine” patent assignment. In this case, limits of the judicially-created doctrine of assignor estoppel was pivotal. The doctrine has been long understood to prevent one from asserting that the patent he or she assigned is invalid, because the requirements of good faith and fair dealing between contracting parties should prevent one from selling something for value and later asserting that what was sold is worthless.

The Supreme Court’s 2021 Minerva Surgical, Inc. v. Hologic, Inc. decision addressed when the estoppel applies, holding that assignor estoppel is invoked only where an invalidity claim contradicts an explicit or implicit representation in the assignment that the patent was valid. Otherwise, the principle of fair dealing does not come into play. The Court noted several examples where the estoppel might not arise.

Assignment of Future Inventions

The first occasion noted by the Court was the assignment of inventions not yet made. This type of assignment might occur when an employee signs an agreement at the onset of employment that assigns all future inventions and patent applications to the employer. The employee cannot warrant that any claims covering future applications resulting from his or her work are valid, as the inventions have not yet been made and the claims have not yet been drafted or prosecuted.

Post-Assignment Changes in Patent Law

When a significant shift in patent law occurs following an assignment, either by the passage of a new statute or through a change in the interpretation of the patent laws, the doctrine also might not apply, at least with respect to the part of the law that changed. One such instance would be the Supreme Court’s 2014 Alice decision that set a new framework for analyzing patent eligibility for computer-implemented inventions. The validity of a patent in this field may well have been changed through the application of this new framework, and an inventor who assigned prior to the Alice decision could not have been expected to anticipate such a change and warrant that the claims were valid under the new framework.

Patent Claims that were Broadened by the Assignee

A third exception to application of the doctrine is exemplified in the Minerva case. Here, an inventor assigned a patent application to his company, which later assigned it to Hologic. When the inventor opened a new business, Minerva Surgical, to make and sell an improvement on the previously assigned invention, Hologic amended the claims of the assigned patent application to cover the new product. After the patent issued, Hologic sued Minerva for patent infringement, and Minerva then challenged the validity of the patent. Hologic then invoked assignor estoppel to argue that Minerva could not challenge the validity of the patent.

The Supreme Court upheld the principle of assignor estoppel in the abstract, but placed limitations on its application. The Court stated that where a patent application is assigned without foreknowledge of the scope of the claims that would issue, an inventor cannot be held to have attested to the validity of any claim broader than, or significantly different than, those of the application at the time of the assignment. Should the claims be narrowed, estoppel would still apply, as they would fall within the scope of the intellectual property known to be assigned. The Court then remanded the case for consideration of whether Hologic’s claim was materially broadened beyond the claims of the assigned patent application.

On remand, the Federal Circuit pointed out the trap that the Supreme Court’s holding leaves for inventors. Patent applications are typically written to claim an invention as broadly as the known prior art permits, but having filed broad claims, inventors who assign pending applications might find themselves estopped to argue invalidity of the claims that ultimately issue regardless of how the claims were changed after the assignment, because they will still fall within the scope of the claims as filed and assigned. Consideration should therefore be given to the breadth of claims filed in an application that is likely to be assigned, particularly where the assignee is or is likely to become a competitor of the inventor/assignor.

Entities To Whom the Estoppel Applies

The Minerva case did not address the degree of affiliation necessary for the estoppel to apply, leaving untouched the Federal Circuit’s “privity” analysis. Under that precedent, estoppel applies to each assignor and to everyone in privity with each assignor, with privity being determined by balancing the equities. Generally, if an assignor has a financial interest in the success of the accused activity, either directly or through an ownership stake in the defendant, or participates in the development of the allegedly infringing product or service, estoppel will apply.

If an employee assigned an invention to his employer, both the employee and the employer, and those in privity, would be estopped from challenging validity. In the Minerva case, Minerva was identified by the Court as the “alter-ego” of the assignor, who founded Minerva following the assignment of the relevant application. Other cases have found privity, and thus estoppel, where an inventor/assignor had been hired to work on the technology of the subject patents and had become a vice president and general manager of the division responsible for making the accused products; where an assignor is a principal stockholder, president and general manager of the accused infringer; where an assignor held control over the accused corporation despite lacking voting control of the corporation; where an assignor was married to a partner in the accused entity; and where an assignor provided knowledge and assistance in the accused conduct. Estoppel has been applied where the inventor/assignor was not an employee but consulted directly on the accused activity. On the other hand, hiring an inventor/assignor as a mere employee, with no ownership or control and with no input in the accused activity, may not result in an estoppel.

Consideration Supporting Estoppel

One question is whether the doctrine will be applied in circumstances where the assignor received little or no consideration for the assignment. Many employment contracts require employees to assign their inventions to their employers for some minimal amount or even as a condition of employment; likewise, many standard patent assignments refer to some unspecified “good and valuable consideration,” in which the receipt and sufficiency is acknowledged. The Federal Circuit has determined that employment, salary and/or bonuses are valid consideration for estoppel to apply, so inventors who are subject to such a contract will likely be unable to challenge the validity of their assigned patents.

What Assignor Estoppel Does Not Prohibit

While an assignor may not be able to challenge the validity of an assigned patent in court under this doctrine, some options are available. First, because the doctrine does not apply in actions before the Patent Trial and Appeals Board, an assignor may challenge the validity of a patent through inter partes review (IPR). While this does place some limitations on validity challenges (only anticipation or obviousness based on patents or printed publications can be asserted in an IPR), it does permit a validity challenge that could not be brought in court. The Federal Circuit held this month that parties can contract away their ability to bring an IPR proceeding, so assignees can potentially eliminate this avenue.

While not presented as invalidity arguments, assignors can also use prior art to support a narrow claim construction in a way that might avoid infringement. Similarly, an assignor can argue that the accused product practices the disclosure of an expired patent that anticipates the claims of the assigned patent, determining that to preclude such an argument would wrongfully allow the assignee to recapture subject matter that is dedicated to the public upon the expiration of a patent. This type of argument, which is effectively that the expired patent anticipates the assigned claims, is limited to expired patents, however, and is therefore of limited use.

Finally, as the doctrine of assignor estoppel arises out of the “good faith and fair dealing” that comes with contract law, the parties may be able to contract around its application. The Minerva decision noted that “the assignment of specific patent claims carries with it an implied assurance” of validity, whether this warranty is put in writing or not, but can the assignment expressly disclaim such a warranty? An assignment agreement that contains express language that the intellectual property at issue is being assigned “as is,” with no representations or warranties as to its validity, may suffice to escape application of the doctrine.

Assignees, on the other hand, may wish to take additional steps to ensure that the assignor cannot later challenge an assigned patent. The assignment could include express language preventing the assignor from challenging the validity of the assigned patents in court or at the Patent and Trademark Office, removing one potential loophole to the estoppel. If a full bar cannot be negotiated, terms that deter a validity challenge without an outright bar can be considered. Payment for the assignment can be staged over time, with a validity challenge resulting in forfeiture of any unpaid amounts, or an assignor can be required to pay the assignee’s legal costs associated with a validity challenge. The assignment could also include a noncompete clause, preventing the assignor from working in the field of the patent for a period of time. As noncompete agreements in employment contracts have come under increasing scrutiny, such a clause in connection with an assignment of an invention is more likely to hold up than a conventional employee noncompete.

Assignor estoppel is a potentially damaging surrender of a defense to patent infringement that should be understood and fully considered when entering into a patent assignment. Assignors should carefully consider the terms of an assignment to avoid placing unforeseen limits on their future activities. Likewise, assignees should know whether they are receiving this assurance of validity when signing an agreement, to ensure they are receiving the full scope of benefits for which they bargained. Assignments of patents, patent applications, and inventions therefore should be carefully scrutinized and not be treated simply as “form” agreements.

Thomas P. McNulty
Peter C. Lando

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EMPLOYMENT AGREEMENTS AND PATENT OWNERSHIP RIGHTS

Employers often have new employees sign an Employment Agreement at the time of their employment. Basic terms of an Employment Agreement often require that the employee protect the intellectual property of the employer, and not disclose confidential information of the employer without authorization. The basic terms of an Employment Agreement also often include a requirement that the employee assign to the employer any intellectual property rights of the employee to any inventions conceived by the employee under the terms of their employment.

However, it is important for the employer to realize that an Employment Agreement executed by an employee, that requires the employee to assign to the employer their intellectual property rights in any invention conceived by the employee under the terms of their employment is not an actual assignment of the invention to the employer. A separate Assignment Agreement transferring intellectual property rights in an invention from the inventor employee to the employer is required.

This issue was addressed earlier this year by the United States Court of Appeals for the Federal Circuit in the case of Advanced Video Technologies LLC, v. HTC Corporation, HTC America, Inc., BlackBerry Limited, Blackberry Corporation and Motorola Mobility LLC.

In the Federal Circuit case, Advanced Video Technologies LLC appealed an order from the United States District Court for the Southern District of New York that dismissed its complaints of patent infringement for lack of standing. The District Court based its decision to dismiss the patent infringement complaints on the ground that a co-owner of the patent was not a party to the action, and the co-owner’s ownership interests in the patent were not transferred to Advanced Video.

The dismissal of the patent infringement complaints by the District Court was affirmed by the Federal Circuit.

The appeal to the Federal Circuit involved U.S. Patent No. 5,781,788, titled “Full Duplex Single Clip Video Codec”. The infringement of the patent was not at issue. The single issue considered by the Federal Circuit was whether or not a co-inventor of the patent transferred her ownership interests in the patent under the terms of an Employment Agreement. The co-inventor did not sign any separate Assignment Agreement transferring her ownership interests in the patent to her employer. The co-inventor only signed an Employment Agreement.

The patent identifies three co-inventors of the subject matter of the patent. For brevity sake, and to simplify this article, I identify the co-inventors as Inventor No. 1, Inventor No. 2 and Inventor No. 3. The invention that is the subject of the patent was created while the three co-inventors were employed by Infochips Systems Inc.

Through a series of transfers, which are not discussed here for brevity sake and to simplify this article, the ownership interest in the invention and the ownership interest in the Employment Agreements were transferred from Infochips Systems Inc. to Advanced Video. At one point during the series of transfers discussed above, the ownership interest in the invention and the ownership interest in the Employment Agreements were transferred to an entity called AVC Technology Inc. (“AVC”). In 1995, AVC filed a parent patent application that eventually led to the patent of this article. Two of three co-inventors, Inventor No. 1 and Inventor No. 2 executed assignments of their ownership interests in the invention and the patent application to AVC. Inventor No. 3, however, refused to assign her ownership interest in the invention and in the patent application to AVC. Although the patent application was not assigned to AVC by Inventor No. 3, AVC filed Petitions with the Patent Office requesting that it be permitted to prosecute the patent application. The Patent Office granted AVC’s Petitions, and the patent was issued to AVC. The patent rights held by AVC were later transferred to Advanced Video.

In 2016, Advanced Video filed three patent infringement lawsuits against HTC Corporation, HTC America, Inc., Blackberry Limited, Blackberry Corporation and Motorola Mobility LLC (the Appellees) in the District Court for the Southern District of New York. In the lawsuits, Appellees filed a Motion to Dismiss for lack of standing. Advanced Video argued in the District Court that it had acquired Inventor No. 3’s ownership rights in the invention and in the patent through the aforementioned series of transfers, beginning with a transfer from Inventor No. 3 to Infochips under the terms of the Employment Agreement signed by Inventor No. 3. Advanced Video argued that there were three provisions of the Employment Agreement signed by Inventor No. 3 that effected a transfer of the invention and patent rights of Inventor No. 3 to Advanced Video.

The first provision of the Employment Agreement signed by Inventor No. 3 is a “will assign” provision. This provision of the Employment Agreement states that “I agree that I…will assign to the Company all my right, title, and interest in and to any and all inventions”. The second provision of the Employment Agreement is a “trust” provision. This provision of the Employment Agreement states that “I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company…all my right, title, and interest in and to any and all inventions”. The third provision of the Employment Agreement is a quitclaim provision. This provision of the Employment Agreement recites “I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have infringement [sic] of any patents”.

The District Court concluded that none of the three provisions effected a transfer of Inventor No. 3’s ownership rights in the invention and in the patent to Advanced Video. Additionally, because Inventor No. 3 was not a party to the lawsuit, the District Court dismissed the case for lack of standing. Advanced Video appealed to the Federal Circuit.

At the Federal Circuit, Advanced Video argued that Inventor No. 3’s ownership rights transferred upon execution of the Employment Agreement by Inventor No. 3, citing the “will assign” language in the Employment Agreement.

The District Court had earlier found that “will” invoked a promise to do something in the future and did not effect a present assignment. The Federal Circuit agreed with the District Court that no present assignment existed in the Employment Agreement. The “will assign” language alone does not create an immediate assignment of Inventor No. 3’s rights in the invention.

At the Federal Circuit, Advanced Video also argued that the “will hold in trust” language of the Employment Agreement created an immediate trust in favor of Infochips (recall that Infochips’ ownership interest in the Employment Agreement was later transferred to Advanced Video”. The court stated that even if they were to determine that Inventor No. 3’s interests in the invention were immediately placed in trust, it did not follow that those interests were automatically, or ever, actually transferred out of trust in favor of Infochips. Absent a transfer, Inventor No. 3 would continue to hold the invention rights as a trustee. The Court further pointed out that while Advanced Video could potentially seek to enforce its alleged ownership rights, or allege a breach of Inventor No. 3’s duties as a trustee by her failure to transfer those rights by bringing an action against Inventor No. 3, no party brought such an action. Since Advanced Video had not sought to enforce any obligation Inventor No. 3 might have had under the trust, it ultimately has no standing to bring a patent infringement action.

The Court further noted that even if Advanced Video is correct that Inventor No. 3’s rights are held in trust, Advanced Video, as a trust beneficiary, cannot maintain a patent infringement suit where Inventor No. 3 is not a party, nor can Inventor No. 3 as a co-owner of the patent be involuntarily joined as a plaintiff, except under limited circumstances that did not apply.

Advanced Video further maintained that it had standing because it eventually acquired Inventor No. 3’s ownership interest in the invention when Inventor No. 3 quitclaimed her interest to Infochips under the terms of the Employment Agreement.

Advanced Video argued that the quitclaim provision of the Employment Agreement which recites “I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have infringement [sic] of any patents, copyrights, or mask work rights resulting from any such application assigned hereunder to the Company” should essentially be read to mean all claims “assignable hereunder,” and that rights that Inventor No. 3 promised she “will assign” were immediately quitclaimed under the Employment Agreement. The Court noted that the Employment Agreement, however, did not provide “assignable hereunder” language. The Court noted that Advanced Video cited no authority showing that “assigned hereunder” covers patent rights that could have been assigned under a contract, but were never actually assigned.

The Court held that the quitclaim provision waives Inventor No. 3’s rights to interests in any patent rights that she assigned under the Employment Agreement. But, as no patent rights were ever assigned to Infochips, the quitclaim provision has no application. The Court then found that the quitclaim provision of the Employment Agreement did not effect an assignment of the patent from Inventor No. 3 to Infochips, AVC, or Advanced Video.

The Federal Circuit then held that Advanced Video did not have full ownership of the patent. Inventor No. 3 was neither a party to the suits, nor had Inventor No. 3 consented to the suits. Advanced Video, therefore, had no standing to maintain its suits. Accordingly, the Federal Circuit affirmed the District Court’s dismissal of the cases.

The Federal Circuit’s decision reemphasizes the importance that employers, even though they may have Employment Agreements in place that require employees to assign to the employer any intellectual property rights of the employee to any inventions conceived by the employee under the terms of their employment, a separate assignment agreement transferring intellectual property rights in an invention from the inventor employee to the employer is required.

Considerations for Patent Assignments After Minerva Ruling

Post author By Austen Zuege

By Austen Zuege & Benjamin Edlavitch

A version of this article about patent assignments and assignor estoppel appeared in an online magazine on August 4, 2021 as intellectual property “expert analysis”.

Introduction

For many decades, the terms and content of patent assignments have been relatively uncontroversial. However, the Supreme Court’s recent ruling in Minerva Surgical, Inc. v. Hologic, Inc. established that assignor estoppel will apply to some assignments but not others. [i] Consequently, the execution of an assignment of patent rights is now potentially more contentious than before. Parties to an assignment may now wish to scrutinize the terms of an assignment document as well as the factual context around the execution of an assignment that may give rise to implied terms. What follows is an analysis of practical considerations for a patent assignment, including sample assignment clauses that might be negotiated, in light of Minerva .

Minerva reaffirmed the doctrine of assignor estoppel but limited its scope to what an assignor represents in assigning patent rights. The assignor is estopped from challenging the validity of the patent when the “assignor’s claim of invalidity contradicts explicit or implicit representations” the assignor made. [ii] A key aspect of the Court’s holding involved determining the scope of “implicit representations” that result in assignor estoppel.

The Minerva Decision

Inventor Truckai had assigned patent applications to Novacept, Inc., which was later acquired by Hologic, Inc. [iii] Afterwards, Truckai founded Minerva Surgical, Inc., and Hologic sued Minerva for patent infringement on resulting patents. [iv] Hologic argued that assignor estoppel barred Minerva from arguing the patents were invalid and the district court and the Federal Circuit both found that assignor estoppel barred the defendant from pursuing invalidity defenses. [v] The Court vacated and remanded the case in a 5-4 ruling and explained that “the limits of the assignor’s estoppel go only so far as, and not beyond, what he represented in assigning the patent application.” [vi] Therefore, “if Hologic’s new claim is materially broader than the ones Truckai assigned, then Truckai could not have warranted its validity in making the assignment” and, thus, “there is no basis for estoppel.” [vii]

The Court outlined a total of three examples where assignor estoppel does not apply. “One example . . . is when the assignment occurs before an inventor can possibly make a warranty of validity as to specific patent claims. Consider a common employment arrangement. An employee assigns to his employer patent rights in any future inventions he develops during his employment; the employer then decides which, if any, of those inventions to patent. In that scenario, the assignment contains no representation that a patent is valid. How could it? The invention itself has not come into being.” [viii] “A second example is when a later legal development renders irrelevant the warranty given at the time of assignment.” [ix] Thirdly, a post-assignment change in patent claim scope in which the “new claims are materially broader than the old claims” does not trigger assignor estoppel. [x] This last example was the situation alleged in Minerva : materially broader continuation claims filed after execution of the assignment were not subject to assignor estoppel because the Court held there was no implied warranty of validity. [xi] While the majority opinion helpfully gave a few examples of circumstances that would or would not give rise to an implied warranty, they are hardly exhaustive and do not reach some fairly common assignment scenarios, leaving some ambiguity. [xii]

Practical Considerations and Possible Assignment Clauses

Almost all of the factors that determine whether assignor estoppel will apply may be within the control of the parties to an assignment. It may be possible to include explicit terms in the assignment document in order to avoid later dispute about what was or was not implied by circumstances of execution. The question becomes, what are the sorts of terms that assignors and assignees may now wish to consider? The following are simply examples; particular parties will have different interests and their relative bargaining power will of course vary from one situation to the next. Though as discussed below the enforceability of certain terms should not be assumed in all scenarios.

Assignees will now have motivations to try to add clauses to employment and services agreements establishing assignment obligations with some or all of the following additional terms: assignment timing requirements ( i.e. , after assignor estoppel attaches), requirements for non-quitclaim assignment or warranty of validity requirements, and express no-challenge clauses. For example, if an assignee’s claims are materially broadened, then the assignor could not have warranted the claims’ validity at the time of the assignment and there is no basis for assignor estoppel, as the Court held in Minerva . [xiii] Assignees seeking to acquire patent rights on a stand-alone basis will now have reasons to do one or more of the following: add an express warranty of validity or a no-challenge clause to an assignment, obtain a further post-grant warranty of validity (especially if any claim is materially broader), obtain a new assignment with each continuation or divisional application having materially different claims (especially any broader claims), and include a choice of law provision. The following are sample clauses that might be used to pursue assignee objectives:

I hereby waive all my rights to challenge validity of said invention in the United States and its territorial possessions and in all foreign countries and of all Letters Patent or similar legal protection in the United States and its territorial possessions and in any and all foreign countries to be obtained for said invention by said application or any continuation, continuation-in-part, divisional, renewal, substitute, or reissue thereof or any legal equivalent thereof in a foreign country for the full term or terms for which the same may be granted. [No-challenge clause for stand-alone assignment]

I hereby waive all my rights to challenge validity of any and all inventions which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company in the United States and its territorial possessions and in all foreign countries (collectively, “the Invention(s)”) and of all Letters Patent or similar legal protection in the United States and its territorial possessions and in any and all foreign countries to be obtained for the Invention(s) by any application or any continuation, continuation-in-part, divisional, renewal, substitute, or reissue thereof or any legal equivalent thereof in a foreign country for the full term or terms for which the same may be granted. [No-challenge clause for employment agreement]

Assignors (including employee-inventors [xiv] ) will now have greater reasons to question and push back against terms present in—or missing from—assignee-supplied assignment forms. As the Supreme Court put it, assignor estoppel “raises the price of patent assignments.” [xv] For example, assignors will have reasons to demand one or more of the following: insist upon only a quitclaim assignment [xvi] or language expressly denying any warranty of validity, inserting a clause that assignor estoppel shall not apply, sign an assignment only with regard to a patent application lacking claims, [xvii] refuse to sign any “confirmatory” assignment that gives rise to a new warranty, and negotiate additional consideration ( e.g. , larger payment, bonus(es), a raise in base compensation, promotion in job title, etc.) if an assignee expects any express or implied warranty. The following are sample clauses that might be used to pursue some of those assignor objectives:

I hereby make this assignment without representation or warranty as to patentability or validity of said invention. [No Warranty of Validity]

It is possible that an assignor could unilaterally write-in additional terms into an assignment form prepared by the assignee, given that only the assignor conventionally signs an assignment under U.S. law. [xviii] Assignees might be faced with scenarios where further consideration is required to subsequently “undo” terms unilaterally written-in by the assignor if consideration was already paid—giving rise to assignees withholding payment until the executed assignment (free from unilateral modifications) is delivered.

Given that assignors and assignees may have widely divergent interests, with each seeking to receive more in exchange for less, there may be a need to reach a compromise with regard to assignment terms. For example, one or more of the following terms might be agreed to: explicitly spell out what due diligence has or has not been performed and expressly include a partial warranty of validity limited to actual knowledge and due diligence activities and/or include express language that assignor estoppel is limited only to validity challenges based on the law as it exists at the time and/or only to prior art of which the assignor was actually aware at the time (putting the obligation on the assignee to inform the assignor of all material prior art). [xix] The following are sample clauses that might be used to pursue some of those compromise objectives:

After performing due diligence, I hereby warrant and represent my belief in the validity of the specific claims presented to me as of the Effective Date of this Assignment to define said invention only with regard to prior art actually known to me as of the Effective Date and only with regard to patent statues, regulations, case law, and any other controlling authorities in effect as of the Effective Date, but this warranty does not extend to any other patent claims that are materially broader than the specific claims presented to me as of the Effective Date, and I hereby accept no liability for any finding of unpatentability or invalidity by any competent authority; and [Partial Warranty of Validity]

I agree, upon payment of a reasonable fee, to conduct further due diligence with respect to any materially broader claim and to make a similar warranty and representation of my belief in validity of that materially broader claim if, in my discretion, such a warranty and representation is justified by all of the facts and information available to me at that time. [Promise to Make Future Warranties for a Reasonable Fee]

Enforceability Considerations

The enforceability and effectiveness of warranties of validity and related contractual clauses present a number of other issues. Among those is the need for consideration in order for an assignment to constitute a valid contract. [xx] This is where an inventor bonus program could be useful—a bonus could be provided as consideration for an assignment and an explicit warranty, or even just for the warranty alone.

Obligations to assign, such as in employment agreements, are subject to state (or foreign) law. [xxi] But obligations to assign do not necessarily also create an obligationto warrant as to validity. A party under an obligation to assign might therefore refuse to provide a warranty of validity absent receipt of further consideration. And the enforceability of an employment agreement or master services agreement that purports to impose a prospective obligation to warrant validity of an invention not yet conceived is a question distinct from the enforceability of prospective obligations to assign, and may need to be sorted out by courts.

To even further complicate things, it has been suggested that a confirmatory assignment could create a warranty of validity that did not attach to an earlier assignment. [xxii] That position seems doubtful, though it turns on the particular language used. A true “confirmatory” assignment merely acknowledges (confirms) a prior assignment, perhaps curing technical defects such as to fix a typo, add missing information needed to accommodate recordation requirements in particular jurisdictions, or to omit sensitive price information in a publicly recorded version. If the prior assignment contained no warranty of validity, express or implied, then merely confirming that prior (warranty-less) assignment creates no new warranty. That would be especially true for nunc pro tunc assignments that relate back to the effective date of an earlier warranty-less assignment. Many assignments include boilerplate language about further writings to effectuate the transfer in the event of a technical defect or barrier to recordability. But if a new warranty is expressly (or implicitly) added to a purportedly “confirmatory” assignment, then the assignment is not really (or not merely) a confirmatory assignment and there must be consideration for the new warranty term—continued employment alone would not be sufficient consideration in some states. [xxiii]

The execution of an assignment of patent rights is now potentially more contentious than before. However, it seems that amending an assignment in light of Minerva may reduce disputes subsequent to its execution.

Have an invention you would like to patent? Have a brand you would like to register as a trademark? Concerned about infringing someone else’s intellectual property? Is someone else infringing your IP? Need representation in an IP dispute? Austen is a patent attorney / trademark attorney who can help. These and other IP issues are his area of expertise. Contact Austen today to discuss.

[i] U.S. No. 20–440 (June 29, 2021).

[ii] Id. Slip Op. at 1.

[iii] Id. at 2-3.

[iv] Id. at 3.

[v] Id. at 3-4.

[vi] Id. at 16.

[viii] Id. at 15.

[x] Id. at 15-16.

[xi] Id. at 16-17.

[xii] There are also ambiguities in the Court’s decision that stem from shifting terminology. For instance, are (granted) “patent claim(s)” = (pending) patent application claim(s) “presented” to the USPTO = (unfiled) claims prepared by assignee’s attorney = (unfiled) claims prepared by assignor or assignor’s attorney? A “patent claim” is not necessarily synonymous with a “patent application claim”. An assignment knowingly executed while a pending patent application claim stands rejected might arguably carry no warranty, though Minerva does not explicitly address such a scenario.

[xiv] See Bd. of Trs. of Leland Stanford Junior Univ. v. Roche Molecular Sys. , Inc. , 563 U.S. 776, 786 (2011) (“In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights.”); Banks v. Unisys Corp . , 228 F.3d 1357, 1359 (Fed. Cir. 2000) (“The general rule is that an individual owns the patent rights to the subject matter of which he is an inventor, even though he conceived it or reduced it to practice in the course of his employment.”).

[xv] Minerva , Slip Op. at 14,n.4.

[xvi] See, e.g., Van Renesselaer v. Kearney , 52 U.S. 297, 322 (1851); Black’s Law Dictionary 503 (10th ed. 2014) (quitclaim deed is one that “conveys a grantor’s complete interest or claim in certain real property but that neither warrants nor professes that the title is valid.”). Assignor estoppel for patents is derived from real property law. Minerva , slip op. at 5-6. A patent quitclaim assignment could include language such as “hereby conveys and quitclaims” or “hereby transfers by quitclaim”, and the document title could explicitly use the word “quitclaim” (or “quit-claim”).

[xvii] A U.S. utility patent application (but not a design patent application) can receive a filing date even if lacking a claim. 37 C.F.R. § 1.53 .

[xviii] However, handwritten changes to an assignment are normally initialed and dated by each of the assignor(s) to avoid disputes about post-execution changes not agreed to by the assignor(s). See MPEP § 323 .

[xix] See Mast, Foos, & Co. v. Stover Mfg. Co. , 177 U.S. 485, 493 (1900) (“we must presume the patentee was fully informed of everything which preceded him, whether such were the actual fact or not”); In re Wood , 599 F.2d 1032, 1036 (CCPA 1979) (“we presume full knowledge by the inventor of all the prior art in the field of his endeavor. However, with regard to prior art outside the field of his endeavor, we only presume knowledge from those arts reasonably pertinent to the particular problem with which the inventor was involved.”) accord Airbus SAS v. Firepass Corp. , 941 F.3d 1374, 1380 (Fed. Cir. 2019).

[xx] See Mars, Inc. v. Coin Acceptors, Inc. , 527 F.3d 1359, 1370 (Fed. Cir. 2008) ( “ Construction of patent assignment agreements is a matter of state contract law.”) and Jim Arnold Corp. v. Hydrotech Sys., Inc. , 109 F.3d 1567, 1572 (Fed. Cir. 1997) (“the question of who owns the patent rights and on what terms typically is a question exclusively for state courts”; collecting cases); but contrast, e.g., Hewett v. Samsonite Corp. , 507 P.2d 1119, 1121 (Colo. App. 1973) (continued employment insufficient consideration for patent assignment, which was found invalid for lack of consideration) and Jostens, Inc. v. Nat’l Computer Sys. , 318 N.W.2d 691, 703-04 (Minn. 1982) (mere continued employment provided insufficient consideration under Minnesota law for coercive intellectual property agreement) with, e.g., Preston v. Marathon Oil Co. , 684 F.3d 1276, 1284-85 (Fed. Cir. 2012) (under Wyoming law, no additional consideration is required to support an employee’s post-employment execution of an agreement to assign intellectual property to his employer). A state-by-state or country-by-country survey is beyond the scope of this article.

[xxi] See Allen v. Riley , 203 U.S. 347, 355-57 (1906); Akazawa v. Link New Tech. , 520 F.3d 1354, 1356-58 (Fed. Cir. 2008); see also 35 U.S.C. § 261 ; but see DDB Techs., L.L.C. v. MLB Advanced Media, L.P. , 517 F.3d 1284, 1290 (Fed. Cir. 2008) (whether patent assignment clause creates automatic assignment or mere obligation to assign treated under Federal Circuit law).

[xxii] Dennis Crouch, “Assignor Estoppel Persists — But Only for Claims Specifically Assigned,” Patently-O (June 29, 2021).

[xxiii] See, e.g., Jostens, 318 N.W.2d at 703-04.

Tags Assignments , Assignor Estoppel , Patents

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Employment Agreements for Employee-Inventors Should Be Drafted to Assign Patent Rights at the Time the Agreement is Signed Rather than Requiring Later Acts

May 14, 2012

LES Insights

By John C. Paul ; D. Brian Kacedon

Authored by Uttam G. Dubal, D. Brian Kacedon, and John C. Paul

To assert a patent in litigation, a party must show that it held legal title to the patent when the lawsuit began. Otherwise, a court may dismiss for lack of standing. Often employers rely on employment agreements signed by employee-inventors to claim legal title to the asserted patents. These agreements usually contain clauses that assign all of the inventor's patent rights to the employer and require the employee to assist the employer in securing patent rights. Whether an employer possesses title to a patent often turns on whether the assignment was expressly undertaken at the time of the signed agreement, or whether it was deferred to some future time. In a recent opinion in C.R. Daniels, Inc. v. Naztec Int'l Group, LLC , 1:11-cv-01624 (D. Md. Apr. 13, 2012), 1 the district court addresses these issues and denied the defendant's motion to dismiss because the plaintiffs held legal title to the asserted patents.

In response to allegations of patent infringement relating to a particular type of wheeled voting booth, defendant Naztec International Group, LLC contended that plaintiffs C.R. Daniels, Inc. and Casto & Harris, Inc. did not own the asserted patents when the lawsuit commenced and therefore lacked standing. Central to the court's analysis were three documents: (1) the complaint of patent infringement filed in June 2011; (2) the assignment records both executed and filed with the U.S. Patent and Trademark Office in September 2011; and (3) the inventors' employment agreements, which included clauses that automatically assigned any future patent rights to the employer.

One of the inventors of the asserted patents, Gary Abel, executed an assignment of rights to C.R. Daniels a few months after the suit was filed. Similarly, the other inventor, Joseph Wilson, executed an assignment of his rights to Casto after the suit was filed. These assignment documents were recorded with the USPTO in September 2011. Each of these assignments contained the following language: "Assignor owns, and by this document assigns to Assignee, all right, title, and interest to the Patent Rights."

In claiming legal title to the asserted patents, the Plaintiffs relied on the employment agreements, which were entered into several years before the filing of the complaint. Abel signed his with C.R. Daniels in December 1999. The agreement stated: "I hereby agree that without further consideration to me any inventions or improvements that I may conceive, make, invent or suggest during my employment . . . shall become the absolute property of [C.R. Daniels], and I will, at any time at the request of [C.R. Daniels] . . . execute any patent papers covering such inventions [that may be] necessary or helpful in the prosecution of applications for patent thereon [and related litigations]." Wilson's employment agreement with Casto included a virtually identical clause.

The C.R. Daniels Decision

In C.R. Daniels , the court focused on the language in both inventors' employment agreements, which stated that " without further consideration to [the inventor] any inventions . . . shall become the absolute property of [employer]." As in most employment contracts, those clauses addressed the ownership of intellectual property that had not yet come into being at the time they were executed. The use of such "future-oriented" language is common and inevitable in these situations. The crucial consideration of when the employer obtains legal title to the invention turns on whether the assignment was "expressly undertake[n] . . . at the time of the agreement," or whether it was left "to some future date."

Generally, if the agreement does not merely obligate the inventor to grant future rights in any future invention, but rather expressly grants any future rights, then no further act would be required once an invention came into being. The transfer of title in this scenario would occur by operation of law, sometimes referred to as the FilmTec rule (after FilmTec Corp. v. Allied-Signal, Inc ., 939 F.2d 1568 (Fed. Cir. 1991), in which it was first set forth). Alternatively, many employment and consulting agreements contain language that serve as an agreement to assign , not an actual assignment. Agreements with such "will be assigned" language require a later assignment for legal title to pass.

After setting forth this framework, the C.R. Daniels court determined that the language in both inventors' employment agreements indicated that no further act would be required once an invention came into being. In other words, the transfer of title would occur automatically, by operation of law. Neither employment agreement contained language indicating that some other act had to be performed for the assignment to be complete. As for the language relating to "execut[ing] any patent papers covering such inventions," the court considered this language to merely create obligations of the inventors to assist their employer in performing ministerial acts to obtain and enforce the patents.

The court found it troubling that in the applications of the asserted patents, the inventor-applicants affirmed that they had not "assigned, granted, conveyed or licensed and [were] under no obligation under contract or law to assign, grant, convey or license, any rights in the invention[s]." The inventors were, however, bound by their earlier employment agreements, which controlled in this instance. Thus, the Plaintiffs were found to hold legal title to the asserted patents before the commencement of this infringement suit.

Strategy and Conclusion

Assignment of patents for existing and yet-to-be-conceived inventions are commonly assigned by operation of law under written employment contracts between employee-inventors and their employers. Companies should take care in drafting employment agreements and ensure that the relevant clauses do not require inventor-employees to perform additional, later acts to complete an assignment.

While courts try to avoid requiring specific wording of such clauses—thereby potentially exalting form over substance—clear language that immediately and automatically assigns rights by operation of law will avoid any potential confusion or perceived lack of standing. Because a case may be dismissed for lack of standing at any time, both plaintiffs and defendants in litigation should, regardless of the stage of litigation, assess whether the language of the relevant employment agreements raise a potential standing issue. In addition, parties should always review relevant assignment records prior to filing suit to make sure any issues are addressed prior to the initiation of litigation.

1 The C.R. Daniels decision: link no longer available

Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients

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Thought leadership, is your company's patent assignment agreement too broad.

In the recently decided Whitewater West Industries, Ltd. v. Alleshouse case, the Federal Circuit invalidated a company’s employment agreement that required an employee residing in California to assign his patent rights for a post-employment invention to the company. 1 While the district court found the company’s employment agreement to be enforceable, the Federal Circuit disagreed, holding that the assignment provision in the employment agreement had a broad restraining effect that rendered the agreement invalid under the California Business and Professions Code. 2

Background of the Case Wave Loch, Inc. is a company that designed sheet-wave attractions. 3 Sheet-wave attractions are large, sophisticated water rides used in amusement parts by wave riding enthusiasts. 4 In 2007, Wave Loch hired Richard Alleshouse to work on the sheet-wave attractions. 5 Alleshouse’s responsibilities during his employment with Wave Loch included assessing and documenting the physical condition of existing sheet-wave rides, improving the existing sheet-wave rides through research and design, and developing new rides using engineering principles such as 3D parametric modeling and numerical analysis. 6

In 2008, Alleshouse signed a Covenant Against Disclosure and Covenant Not to Compete (Agreement) with Wave Loch that included the following assignment provision: a. Assignment: In consideration of compensation paid by Company, Employee agrees that all right, title and interest in all inventions, improvements, developments, trade-secret, copyrightable or patentable material that Employee conceives or here-after may make or conceive, whether solely or jointly with others: (a) with the use of Company’s time, materials, or facilities; or (b) resulting from or suggested by Employee’s work for Company; or (c) in any way connected to any subject matter within the existing or contemplated business of Company shall automatically be deemed to become the property of Company as soon as made or conceived, and Employee agrees to assign to Company, its successors, assigns, or nominees, all of Employee’s rights and interests in said inventions, improvements, and developments in all countries worldwide. Employee’s obligation to assign the rights to such inventions shall survive the discontinuance or termination of this Agreement for any reason. 7 In July 2012, Alleshouse contacted Yong Yeh, a licensed attorney, to discuss his obligations under the Agreement and the possibility of starting a joint venture (later known as Pacific Surf Designs) with Yeh. 8 Alleshouse resigned from Wave Loch late July 2012, and in October 2012, Alleshouse and Yeh filed two provisional patent applications related to sheet-wave water attractions. 9 The provisional patent applications resulted in U.S. Patent No. 9,044,685, U.S. Patent No. 9,302,189, and U.S. Patent No. 9,592,433 (collectively, the “Patents”). 10 The Patents list Alleshouse and Yeh as the inventors and were assigned to Pacific Surf Designs. 11 District Court Finds in Favor of Whitewater In March 2017, Whitewater West Industries, Ltd. (Whitewater), the successor of Wave Loch, sued Alleshouse, Yeh, and Pacific Surf Designs (Defendants) in the United States District Court for the Southern District of California, alleging that the Agreement required Alleshouse to assign his rights in the Patents to Whitewater. 12 The Defendants challenged the validity of the Agreement in part on the ground that it violated the following provision of California Business and Professions Code § 16600: 13 Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void. 14 The district court held that “the Agreement does not restrain Alleshouse from engaging in the sheet wave profession. It only requires him to assign inventions resulting from his work at Wave Loch or relating to Wave Loch’s business at the time he was there.” 15 The district court ultimately ruled in favor of Whitewater, finding that Alleshouse breached the assignment provision of the Agreement by failing to assign the rights in the Patents to Whitewater. 16 Whitewater further alleged that Yeh should be removed from inventorship status on the Patents since he did not contribute to the conception of the inventions. 17 The district court agreed, finding that Yeh should not have been listed as an inventor since Alleshouse alone conceived the inventions. 18

Federal Circuit finds Assignment Provision Invalid On appeal, the Federal Circuit held that the assignment provision of the Agreement is invalid under § 16600 since the assignment provision’s restraining effect impairs an individual’s right under § 16600 to pursue his profession, trade, or business. 19 The assignment provision, which is unlimited in time and geography, applies when Alleshouse’s post-employment invention is “suggested by” his work for Wave Loch and when his post-employment invention is “in any way connected to any subject matter” that was within Wave Loch’s “existing or contemplated” business when Alleshouse worked for Wave Loch. 20 Since the inventions of the Patents were conceived without use of any trade secret or other confidential information after Alleshouse left Wave Loch, the Federal Circuit held that the Agreement is invalid under § 16600’s strict standards governing restraints on former employees. 21

The Federal Circuit also reversed the judgment of the district court’s correction of inventorship claim. 22 In this case, correcting inventorship under 35 U.S.C. § 256 depended on Whitewater’s acquisition of an ownership interest in the Patents based on the assignment provision on which its contract claim rests. 23 Since the assignment provision was invalidated, Whitewater lacked standing to contest inventorship, and therefore its claim to correct inventorship failed. 24

Invention Assignment Provision Drafting Considerations While broad assignment provisions extending to post-employment inventions likely violate § 16600, California law allows for assignment provisions that apply to inventions conceived by current employees that relate to the employer’s business. 25 Also, assignment provisions directed to inventions developed or derived from an employer’s trade secret or other confidential information, even if conceived post-employment, may still be enforceable. 26 Several other states including Delaware, Kansas, Minnesota, Nevada, North Carolina, Utah, and Washington have statutes similar to § 16600 addressing invention assignment agreements. 27 Thus, companies should draft the assignment provisions of their employment agreements to include language that complies with the requirements of these state statutes. Companies should also consider clearly outlining the confidentiality provisions in their employment agreements and taking measures within the company to protect that confidential information. Had Wave Loch extended its confidentiality provisions to protect the information used by Alleshouse to arrive at his patented inventions, Whitewater may possess full ownership of the Patents today.

1 Whitewater West Indus., Ltd. v. Alleshouse, Nos. 2019-1852, 2019-2323, 2020 WL 6788760, *12 (Fed. Cir. Nov. 19, 2020). 2 See id. at *6. 3 See id. at *1. 4 See id. 5 See id. at *2. 6 See id. 7 See id. 8 See id. at *3. 9 See id. 10 See id.; see also U.S. Patent Nos. 9,044,685 (issued June 6, 2015), 9,302,189 (issued Apr. 5, 2016); and 9,592,433 (issued Mar. 14, 2017). 11 Whitewater West Indus., Ltd., Nos. 2019-1852, 2019-2323, 2020 WL 6788760 at *3. 12 See id. 13 See id. at *4. 14 Cal. Bus. & Prof. Code § 16600. 15 Whitewater West Indus., Ltd., Nos. 2019-1852, 2019-2323, 2020 WL 6788760 at *4. 16 See id. 17 Whitewater West Indus., Ltd. v. Alleshouse, Case No. 17-cv-00501, 2020 WL 4261884, *13 (S.D. Cal. 2019). 18 See id. 19 Whitewater West Indus., Ltd., Nos. 2019-1852, 2019-2323, 2020 WL 6788760 at *6. 20 See id. 21 See id. at *4. 22 See id. at *12. 23 See id. 24 See id. 25 See Cal. Labor Code § 2870(a). 26 See Applied Materials, Inc. v. Advanced Micro-Fabrication Equipment (Shanghai) Co., 630 F. Supp. 2d 1084, 1086 (N.D. Cal. 2009). 27 Del. Code Ann., Title 19, § 805; Illinois Revised Stats., Chapter 140, §§ 301-303; Kansas Stats. Ann., §§ 44-130; Minnesota Stats. Ann., § 181.78; Nevada Stat., § 600.500; North Carolina General Stats., §§ 66-57.1, 66-57.2); Utah Code Ann., §§ 34-39-2, 34-39-3; Washington Revised Code Ann., §§ 49.44.140, 49.44.150.

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Procuring U.S. Patents without a Signed Assignment of Patent Rights

Increased employee mobility, health challenges, and the economic downturn due to the COVID-19 pandemic may result in more inventors than usual being unavailable to assign patent rights. Fortunately, applicants may procure a U.S. patent even if an assignment document cannot be obtained for the application to be filed. This article summarizes the requirements for filing and prosecuting a U.S. patent application filed post-America Invents Act (AIA) without a patent assignment and identifies pitfalls when establishing ownership of patent rights for patent prosecution. Inventors being unavailable may also complicate obtaining the declarations required for U.S. patent prosecution, but solutions are available as we previously discussed here .

Need for an Assignment

For a patent to issue to an assignee, the United States Patent and Trademark Office (the “USPTO”) must be made formally aware of the assignment so that the assignee is recognized as the patent applicant. Filing an Application Data Sheet (ADS) for a patent application identifying the assignee as the applicant provides informal notice to the USPTO. MPEP § 301 discusses ownership/assignability of patents and applications, including formal assignment recordation at the USPTO. Recording an assignment may be necessary to permit the assignee to “take action” in the patent application during prosecution and for the patent to issue in the name of the assignee. 37 CFR 1.46 ; MPEP §§ 301 , 302 , 605 . In other words, assignees may face obstacles prosecuting a patent without an executed assignment. The assignment(s) must transfer the entirety of patent rights from each of the inventors to the assignee, e.g., corporation, partnership, university, government entity, etc. There can be multiple assignees if different inventors assign their rights to different assignees, a situation that results in two or more partial assignees that must each be identified to the USPTO as an applicant. MPEP § 301 .

As only one patent assignment is required per inventor per patent application, subsequent applications claiming priority may often rely on an earlier assignment (depending on the assignment’s particular language). If new subject matter is introduced in the application being filed, such as in a continuation-in-part application, another assignment may be required.

Persons who may file a Patent Application without an Assignment

Fortunately, applicants may procure a patent even if an inventor is not available to sign an assignment before application filing or during prosecution before payment of the issue fee.

A person to whom the inventor is under the obligation to assign the invention may file a patent application and be identified as the applicant. An assignment can then be subsequently executed and the USPTO notified as discussed above. Alternatively, other documentary evidence of ownership, such as an employment agreement, invention disclosure form, or other documentation, can be recorded with the USPTO in lieu of a signed assignment document. 37 CFR 1.46 . Employment agreements may contain language stating that the inventor assigns all rights, title, and interests in any invention developed while employed by the employer. In some instances, the employment agreement may affirmatively state that the employee is under an obligation to assign the invention to the employer. An invention disclosure form may contain language stating that the inventor’s signature on the form acknowledges the inventor’s assignment of and/or obligation to assign any rights, title, and interest in the invention disclosure to the employer. If the invention disclosure form includes the inventor’s signature, this may be sufficient evidence that the employer is an obligated assignee. 37 C.F.R. 1.46(b)(1) . It is important to examine any documentary evidence of ownership before recordation to identify any information (e.g., industry trend language, discussion of prior art, personal information of an employee, etc.) that may require redaction before recordation and/or may make public recording of the documentary evidence an undesirable option for the applicant.

Also, a person who shows sufficient proprietary interest in the matter may file a patent application and be identified as the applicant upon showing that such an action is appropriate, with the resulting patent being issuable in the applicant’s name. 37 CFR 1.46 . If filing a national stage application, the applicant must have been identified in the international stage of the international application or as the applicant in the publication of the international registration.

Showing Sufficient Proprietary Interest or Obligation to Assign

As provided in 37 CFR 1.46(b)(2) , “[i]f the applicant is a person who otherwise shows sufficient proprietary interest in the matter, such applicant must submit a petition including: (i) The fee set forth in § 1.17(g); (ii) A showing that such person has sufficient proprietary interest in the matter; and (iii) A statement that making the application for patent by a person who otherwise shows sufficient proprietary interest in the matter on behalf of and as agent for the inventor is appropriate to preserve the rights of the parties.” Additionally, as stated in MPEP § 409.05 , “[t]he ability for a person who otherwise shows sufficient proprietary interest in the matter to make an application for patent is not limited to situations in which all of the inventors refuse to execute the application, or cannot be found or reached after diligent effort.”

Showing sufficient proprietary interest requires “proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties.” 37 CFR 1.46(a) ; 37 CFR 1.424 . Showing sufficient proprietary interest is discussed in MPEP § 409.05 and may be established in various ways depending on the circumstances. MPEP § 409.05 states that

A proprietary interest obtained other than by assignment or agreement to assign may be demonstrated by an appropriate legal memorandum to the effect that a court of competent jurisdiction (federal, state, or foreign) would by the weight of authority in that jurisdiction award title of the invention to the 37 CFR 1.46 applicant. The facts in support of any conclusion that a court would award title to the 37 CFR 1.46 applicant should be made of record by way of an affidavit or declaration of the person having firsthand knowledge of same. The legal memorandum should be prepared and signed by an attorney at law familiar with the law of the jurisdiction involved. A copy (in the English language) of a statute (if other than the United States statute) or a court decision (if other than a reported decision of a federal court or a decision reported in the United States Patents Quarterly) relied on to demonstrate a proprietary interest should be made of record.

Remember that an applicant as a person who otherwise shows sufficient proprietary interest in the matter must submit the required petition, fee, and information prior to paying the issue fee as set forth in 37 CFR 1.46 .

Final Considerations

Patent applicants can gain control over patent prosecution and assert patent rights even without execution of a signed assignment by an inventor. Before doing so, however, applicants should coordinate with patent counsel regarding their particular circumstances and should consult current USPTO rules.

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October 27, 2020

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Client Resources Are you Sure You Own that Patent?

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Hint: The standard employment agreement you have been using that includes an assignment of IP provision might not be sufficient.

In the United States, employers don’t own an employee’s or consultant’s inventions unless the employee/consultant signs an agreement transferring his or her ownership of an invention to the employer. [1] The agreement transferring the employee’s ownership rights is called an “assignment.” And if a patent names more than one inventor, the inventors jointly and equally own the patent, even if one inventor contributed the lion’s share of the invention and the other inventor(s) made much smaller contributions. Absent an assignment from each inventor, each inventor can separately sell or license his or her interest to whomever he or she chooses.

Having full title to a patent is important for a number of reasons. First and foremost, a company’s intellectual property is often its most valuable asset, so it’s important to make sure it has actually obtained the necessary agreements to transfer the rights in its employees’/contractors’ inventions to the company. A patent also can’t be enforced against an infringer unless all owners join the lawsuit. And lack of full ownership will impair a company’s ability to sell or license a patent to others.

But just making sure you have an “invention assignment” agreement for each inventor is not enough. The specific language and timing of the agreements matter. For example, in the recent Federal Circuit Court of Appeals decision, Advanced Video Technologies v. HTC Corp. , [2] the patent infringement suit was dismissed because the company did not obtain a proper assignment from one of the three employee inventors. Two of the inventors signed an agreement transferring their rights in the patent to their employer, but the third inventor did not. The third inventor, however, did sign an employee agreement a few years before the patent application was filed which included an invention assignment section that provided the employee “will assign” all of her inventions to the company. The patent was then transferred a number of times, but an express present assignment from the third inventor (such as I hereby assign my entire right title and interest in US Pat. No. XYZ to company) was never obtained. The Federal Circuit, applying well-established precedent, held the company did not, in fact, fully own the patent because it never obtained the third inventor’s ownership rights in the patent. Instead, the standard employee invention assignment agreement the company had used was merely a promise to assign at some point in the future. As a result, the case was dismissed. The company would first need to bring a state-law based claim to enforce the employee invention assignment agreement and formally obtain the third inventor’s ownership.

Instead of a promise to assign in the future, the agreement could have included a present assignment of the future invention by also providing the employee not only will assign, but hereby assigns his or her ownership interests in a future invention. Such present assignment language has been upheld by the Federal Circuit and the Supreme Court as effective to transfer the employee’s rights in a future invention to the company without the need for a further assignment. See Board of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Systems, Inc. , 563 U.S. 776 (2011); see also FilmTec Corp. v. Allied-Signal, Inc. , 939 F.2d 1568, 1572-73 (Fed. Cir. 1991).

Using employee invention assignment agreements that only include a promise to assign in the future also leaves open the possibility of the employee transferring his or her rights in an invention to a third party before he or she assigns to the employer, which is what happened in the Stanford Supreme Court case cited in the preceding paragraph.

In addition to having the right language in an employee invention assignment agreement, which employees should be required to sign on their first day of work, a company should also have each inventor sign another assignment agreement for each patent application that specifically lists the patent application, for example, by title and application number, so there is no question the patent at issue was transferred and so the assignment of the specific patent application can be recorded with the US Patent and Trademark Office.

Besides having the right language in an assignment agreement, timing also matters. In upcoming articles we will discuss how proper timing is important for ensuring the employee’s assignment is valid and for ensuring the validity of priority claims in corresponding international applications.

[1] There is a narrow exception for employees that are “hired to invent,” but this rarely applies and should not be relied on. Absent an assignment, an employer may also be entitled to a license to an employee patented invention under the Shop Rights doctrine, which is not the same as owning the patent.

[2] Case Nos. 16-2309, 2310, 2311 (Fed. Cir. Jan. 11, 2018).

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Patent Assignment Agreement

This Patent Assignment Agreement is a comprehensive document designed to facilitate the transfer of patent ownership from the original patent owner, known as the assignor, to another party, known as the assignee .

A patent is a legal grant issued by the United States Patent and Trademark Office (USPTO) to an inventor, providing exclusive rights to make, use, and sell their invention for a limited period , typically 20 years from the filing date. This protection is granted in exchange for the public disclosure of the invention. This system encourages innovation and lets inventors benefit from their creations for a specified period of time.

An assignment is the legal transfer of ownership or rights of a patent from one party (assignor) to another (assignee) . Using a Patent Assignment Agreement, the assignor forever relinquishes their rights to the patent, and the assignee assumes control and ownership of those rights for the duration of the patent.

This assignment can be made either before or after a patent application has been issued as a patent. By law, a patent is considered personal property and, so, can be sold or transferred in the same way one could sell a car or a piece of furniture. This document formally initiates the transfer process, providing clarity and protection for both parties involved. This agreement is particularly useful when inventors, companies, or individuals who wish to transfer their patent rights, whether for financial considerations, strategic partnerships, or other business transactions.

This document is different from a Trademark Assignment Agreement, which is used for the transfer of a different kind of intellectual property, known as a trademark. A trademark is usually a brand name or logo, unlike a patent, which is usually an invention of some sort. This is also slightly different from an Intellectual Property Release . Although that form could be used for a patent, it is generally used for copyrighted material, like works of art or pieces of music. In that case, payment is not made and, instead, the copyrighted works are simply "released," or given to another party. This document can also be distinguished from an Intellectual Property Permission Letter, as there, one party is writing to request permission to use the intellectual property of another. The Patent Assignment Agreement would then come after the letter, but the letter is not the formal legal document that initiates the transfer.

How to use this document

This document includes all the information necessary to transfer the ownership of a patent from one party to another. This document should be used when the transfer will be permanent, usually for a one-time fee , and no royalties will be due after the assignment. This document allows the parties to fill in details of the patent to be transferred, such as the patent name, original recordation number, and date the patent was initially issued . This ensures that everything needed for new recordation with the United States Patent and Trademark Office (USPTO) is present.

Once the document has been completed, both parties should sign the document in front of a notary and have the notary complete the notary page. The document must then be recorded with the USPTO within three months of its signing, or it becomes void. The current cost for filing an assignment with the USPTO is $40 per patent. The assignment can be filed either online or by mail.

Applicable law

In the United States, specific federal laws govern patent assignments, primarily under Title 35 of the United States Code , which pertains to the country's patent system. Section 261 of Title 35 outlines the general provisions related to patent ownership and transfers. According to this statute, patent assignments must be in writing to be valid, and they require the signature of the owner of the patent or their authorized representative. The law also specifies that the assignment must be recorded with the USPTO to establish priority and provide notice to the public.

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Section 302

302 Recording of Assignment Documents [R-07.2015]

37 cfr 3.11 documents which will be recorded..

(a) Assignments of applications, patents, and registrations, and other documents relating to interests in patent applications and patents, accompanied by completed cover sheets as specified in § 3.28 and § 3.31 , will be recorded in the Office. Other documents, accompanied by completed cover sheets as specified in § 3.28 and § 3.31 , affecting title to applications, patents, or registrations, will be recorded as provided in this part or at the discretion of the Director.
(b) Executive Order 9424 of February 18, 1944 (9 FR 1959, 3 CFR 1943-1948 Comp., p. 303) requires the several departments and other executive agencies of the Government, including Government-owned or Government-controlled corporations, to forward promptly to the Director for recording all licenses, assignments, or other interests of the Government in or under patents or patent applications. Assignments and other documents affecting title to patents or patent applications and documents not affecting title to patents or patent applications required by Executive Order 9424 to be filed will be recorded as provided in this part.
(c) A joint research agreement or an excerpt of a joint research agreement will also be recorded as provided in this part.

37 CFR 3.58 Governmental registers.

(a) The Office will maintain a Departmental Register to record governmental interests required to be recorded by Executive Order 9424. This Departmental Register will not be open to public inspection but will be available for examination and inspection by duly authorized representatives of the Government. Governmental interests recorded on the Departmental Register will be available for public inspection as provided in § 1.12 .
(b) The Office will maintain a Secret Register to record governmental interests required to be recorded by Executive Order 9424. Any instrument to be recorded will be placed on this Secret Register at the request of the department or agency submitting the same. No information will be given concerning any instrument in such record or register, and no examination or inspection thereof or of the index thereto will be permitted, except on the written authority of the head of the department or agency which submitted the instrument and requested secrecy, and the approval of such authority by the Director. No instrument or record other than the one specified may be examined, and the examination must take place in the presence of a designated official of the Patent and Trademark Office. When the department or agency which submitted an instrument no longer requires secrecy with respect to that instrument, it must be recorded anew in the Departmental Register.

37 CFR Part 3 sets forth Office rules on recording assignments and other documents relating to interests in patent applications and patents and the rights of an assignee.

37 CFR 3.11(c) provides that the Office will record a joint research agreement or an excerpt of a joint research agreement.

302.01 Assignment Document Must Be Copy for Recording [R-08.2012]

37 cfr 3.24 requirements for documents and cover sheets relating to patents and patent applications..

(a) For electronic submissions: Either a copy of the original document or an extract of the original document may be submitted for recording. All documents must be submitted as digitized images in Tagged Image File Format (TIFF) or another form as prescribed by the Director. When printed to a paper size of either 21.6 by 27.9 cm (8 1/2 inches by 11 inches) or 21.0 by 29.7 cm (DIN size A4), the document must be legible and a 2.5 cm (one-inch) margin must be present on all sides.
(b) For paper or facsimile submissions: Either a copy of the original document or an extract of the original document must be submitted for recording. Only one side of each page may be used. The paper size must be either 21.6 by 27.9 cm (8 1/2 inches by 11 inches) or 21.0 by 29.7 cm (DIN size A4), and in either case, a 2.5 cm (one-inch) margin must be present on all sides. For paper submissions, the paper used should be flexible, strong white, non-shiny, and durable. The Office will not return recorded documents, so original documents must not be submitted for recording.

The United States Patent and Trademark Office will accept and record only a copy of an original assignment or other document. See MPEP § 317 . The document submitted for recordation will not be returned to the submitter. If the copy submitted for recordation is illegible, the recorded document will be illegible. Accordingly, applicants and patent owners should ensure that only a legible copy is submitted for recordation.

302.02 Translation of Assignment Document [R-08.2012]

37 cfr 3.26 english language requirement..

The Office will accept and record non-English language documents only if accompanied by an English translation signed by the individual making the translation.

The assignment document, if not in the English language, will not be recorded unless accompanied by an English translation signed by the translator.

302.03 Identifying Patent or Application [R-07.2015]

37 cfr 3.21 identification of patents and patent applications..

An assignment relating to a patent must identify the patent by the patent number. An assignment relating to a national patent application must identify the national patent application by the application number (consisting of the series code and the serial number; e.g., 07/123,456). An assignment relating to an international patent application which designates the United States of America must identify the international application by the international application number; e.g., PCT/US2012/012345. An assignment relating to an international design application which designates the United States of America must identify the international design application by the international registration number or by the U.S. application number assigned to the international design application. If an assignment of a patent application filed under § 1.53(b) of this chapter is executed concurrently with, or subsequent to, the execution of the patent application, but before the patent application is filed, it must identify the patent application by the name of each inventor and the title of the invention so that there can be no mistake as to the patent application intended. If an assignment of a provisional application under § 1.53(c) of this chapter is executed before the provisional application is filed, it must identify the provisional application by the name of each inventor and the title of the invention so that there can be no mistake as to the provisional application intended.

The patent or patent application to which an assignment relates must be identified by patent number or application number unless the assignment is executed concurrently with or subsequent to the execution of the application but before the application is filed. Then, the application must be identified by the name(s) of the inventors, and the title of the invention. If an assignment of a provisional application is executed before the provisional application is filed, it must identify the provisional application by name(s) of the inventors and the title of the invention.

The Office makes every effort to provide applicants with the application numbers for newly filed patent applications as soon as possible. It is suggested, however, that an assignment be written to allow entry of the identifying number after the execution of the assignment. An example of acceptable wording is:

“I hereby authorize and request my attorney, (Insert name), of (Insert address), to insert here in parentheses (Application number , filed ) the filing date and application number of said application when known.”

302.04 Foreign Assignee May Designate Domestic Representative [R-10.2019]

35 u.s.c. 293 nonresident patentee; service and notice..

Every patentee not residing in the United States may file in the Patent and Trademark Office a written designation stating the name and address of a person residing within the United States on whom may be served process or notice of proceedings affecting the patent or rights thereunder. If the person designated cannot be found at the address given in the last designation, or if no person has been designated, the United States District Court for the Eastern District of Virginia shall have jurisdiction and summons shall be served by publication or otherwise as the court directs. The court shall have the same jurisdiction to take any action respecting the patent or rights thereunder that it would have if the patentee were personally within the jurisdiction of the court.

37 CFR 3.61 Domestic representative.

If the assignee of a patent, patent application, trademark application or trademark registration is not domiciled in the United States, the assignee may designate a domestic representative in a document filed in the United States Patent and Trademark Office. The designation should state the name and address of a person residing within the United States on whom may be served process or notice of proceedings affecting the application, patent or registration or rights thereunder.

An assignee of a patent or patent application who is not domiciled in the United States may, by written document signed by such assignee, designate a domestic representative. The designation of domestic representative should always be submitted to the Office as a paper separate from any assignment document. The designation of a domestic representative should be clearly labeled “Designation of Domestic Representative” and it will be entered into the record of the appropriate application or patent file. The designation must be signed in accordance with 37 CFR 1.33(b) .

302.05 Address of Assignee [R-08.2012]

The address of the assignee may be recited in the assignment document and must be given in the required cover sheet. See MPEP § 302.07 .

302.06 Fee for Recording [R-10.2019]

37 cfr 3.41 recording fees..

(a) All requests to record documents must be accompanied by the appropriate fee. Except as provided in paragraph (b) of this section, a fee is required for each application, patent and registration against which the document is recorded as identified in the cover sheet. The recording fee is set in § 1.21(h) of this chapter for patents and in § 2.6(b)(6) of this chapter for trademarks.
(1) The document does not affect title and is so identified in the cover sheet (see § 3.31(c)(2)); and
(2) The document and cover sheet are either: Faxed or electronically submitted as prescribed by the Director, or mailed to the Office in compliance with § 3.27 .

The recording fee set in 37 CFR 1.21(h) is charged for each patent application and patent identified in the required cover sheet except as provided in 37 CFR 3.41(b) . If the request to record a document is submitted electronically, the fee is set forth in 37 CFR 1.21(h)(1) , currently at $0. If the request to record a document is not submitted electronically (i.e., is submitted on paper or via facsimile), the applicable fee is set forth in 37 CFR 1.21(h)(2) . Customers should check the current fee schedule on the Office website before submitting documents for recordation. See MPEP §§ 302.08 - 302.10 for additional information regarding the acceptable ways to submit documents for recordation.

302.07 Assignment Document Must Be Accompanied by a Cover Sheet [R-10.2019]

37 cfr 3.28 requests for recording..

Each document submitted to the Office for recording must include a single cover sheet (as specified in § 3.31 ) referring either to those patent applications and patents, or to those trademark applications and registrations, against which the document is to be recorded. If a document to be recorded includes interests in, or transactions involving, both patents and trademarks, then separate patent and trademark cover sheets, each accompanied by a copy of the document to be recorded, must be submitted. If a document to be recorded is not accompanied by a completed cover sheet, the document and the incomplete cover sheet will be returned pursuant to § 3.51 for proper completion, in which case the document and a completed cover sheet should be resubmitted.

37 CFR 3.31 Cover sheet content.

(1) The name of the party conveying the interest;
(2) The name and address of the party receiving the interest;
(3) A description of the interest conveyed or transaction to be recorded;
(i) For trademark assignments and trademark name changes: Each trademark registration number and each trademark application number, if known, against which the Office is to record the document. If the trademark application number is not known, a copy of the application or a reproduction of the trademark must be submitted, along with an estimate of the date that the Office received the application; or
(ii) For any other document affecting title to a trademark or patent application, registration or patent: Each trademark or patent application number or each trademark registration number or patent against which the document is to be recorded, or an indication that the document is filed together with a patent application;
(5) The name and address of the party to whom correspondence concerning the request to record the document should be mailed;
(6) The date the document was executed;
(i) Place a symbol comprised of letters, numbers, and/or punctuation marks between forward slash marks ( e.g. /Thomas O’Malley III/) in the signature block on the electronic submission; or
(ii) Sign the cover sheet using some other form of electronic signature specified by the Director.
(8) For trademark assignments, the entity and citizenship of the party receiving the interest. In addition, if the party receiving the interest is a domestic partnership or domestic joint venture, the cover sheet must set forth the names, legal entities, and national citizenship (or the state or country of organization) of all general partners or active members that compose the partnership or joint venture.
(b) A cover sheet should not refer to both patents and trademarks, since any information, including information about pending patent applications, submitted with a request for recordation of a document against a trademark application or trademark registration will become public record upon recordation.
(1) Indicate that the document relates to a Government interest; and
(2) Indicate, if applicable, that the document to be recorded is not a document affecting title (see § 3.41(b) ).
(d) Each trademark cover sheet required by § 3.28 seeking to record a document against a trademark application or registration should include, in addition to the serial number or registration number of the trademark, identification of the trademark or a description of the trademark, against which the Office is to record the document.
(e) Each patent or trademark cover sheet required by § 3.28 should contain the number of applications, patents or registrations identified in the cover sheet and the total fee.
(f) Each trademark cover sheet should include the citizenship of the party conveying the interest.
(1) Identify the document as a “joint research agreement” (in the space provided for the description of the interest conveyed or transaction to be recorded if using an Office-provided form);
(2) Indicate the name of the owner of the application or patent (in the space provided for the name and address of the party receiving the interest if using an Office-provided form);
(3) Indicate the name of each other party to the joint research agreement party (in the space provided for the name of the party conveying the interest if using an Office-provided form); and
(4) Indicate the date the joint research agreement was executed.
(h) The assignment cover sheet required by § 3.28 for a patent application or patent will be satisfied by the Patent Law Treaty Model International Request for Recordation of Change in Applicant or Owner Form, Patent Law Treaty Model International Request for Recordation of a License/ Cancellation of the Recordation of a License Form, Patent Law Treaty Model Certificate of Transfer Form or Patent Law Treaty Model International Request for Recordation of a Security Interest/ Cancellation of the Recordation of a Security Interest Form, as applicable, except where the assignment is also an oath or declaration under § 1.63 of this chapter. An assignment cover sheet required by § 3.28 must contain a conspicuous indication of an intent to utilize the assignment as an oath or declaration under § 1.63 of this chapter.

Each assignment document submitted to the Office for recording must be accompanied by a cover sheet as required by 37 CFR 3.28 . The cover sheet for patents or patent applications must contain:

(A) The name of the party conveying the interest;
(B) The name and address of the party receiving the interest;
(C) A description of the interest conveyed or transaction to be recorded;
(D) Each patent application number or patent number against which the document is to be recorded, or an indication that the document is filed together with a patent application;
(E) The name and address of the party to whom correspondence concerning the request to record the document should be mailed;
(F) The date the document was executed; and
(G) The signature of the party submitting the document.

For applications filed on or after September 16, 2012, if the assignment document is also intended to serve as the required oath or declaration, the cover sheet must also contain a conspicuous indication of an intent to utilize the assignment as the required oath or declaration under 37 CFR 1.63 . See 37 CFR 3.31(h) .

If the document submitted for recordation is a joint research agreement or an excerpt of a joint research agreement, the cover sheet must clearly identify the document as a "joint research agreement" (in the space provided for the description of the interest conveyed if using Form PTO-1595). The date the joint research agreement was executed must also be identified. The cover sheet must also identify the name(s) of the owner(s) of the application or patent (in the space provided for the name and address of the party receiving the interest if using Form PTO-1595). The name(s) of every other party(ies) to the joint research agreement must also be identified (in the space provided for the name of the party conveying the interest if using Form PTO-1595).

Each patent cover sheet should contain the number of patent applications or patents identified in the cover sheet and the total fee.

Examples of the type of descriptions of the interest conveyed or transaction to be recorded that can be identified are:

(A) assignment;
(B) security agreement;
(C) merger;
(D) change of name;
(E) license;
(F) foreclosure;
(H) contract; and
(I) joint research agreement.

Cover sheets required by 37 CFR 3.28 seeking to record a governmental interest must also (1) indicate that the document relates to a governmental interest and (2) indicate, if applicable, that the document to be recorded is not a document affecting title.

A patent cover sheet may not refer to trademark applications or registrations.

Form PTO-1595, Recordation Form Cover Sheet, may be used as the cover sheet for recording documents relating to patent(s) and/or patent application(s) in the Office.

Form PTO-1595. Recordation Form Cover Sheet for Patents

302.08 Mailing Address for Submitting Assignment Documents [R-08.2012]

37 cfr 3.27 mailing address for submitting documents to be recorded..

Documents and cover sheets submitted by mail for recordation should be addressed to Mail Stop Assignment Recordation Services, Director of the United States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-1450, unless they are filed together with new applications.

37 CFR 3.27 sets out how documents submitted for recording should be addressed to the Office. In order to ensure prompt and proper processing, documents and their cover sheets should be addressed to the Mail Stop Assignment Recordation Services, Director of the U.S. Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450, unless they are filed together with new applications. Requests for recording documents which accompany new applications should be addressed to the Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-1450.

302.09 Facsimile Submission of Assignment Documents [R-11.2013]

Assignments and other documents affecting title may be submitted to the Office via facsimile (fax). See the USPTO website or MPEP § 1730 for the facsimile number. This process allows customers to submit their documents directly into the automated Patent and Trademark Assignment System and receive the resulting recordation notice at their fax machine. The customer’s fax machine should be connected to a dedicated line because recordation notices will be returned automatically to the sending fax number through the Patent and Trademark Assignment System. If the Office system is unable to complete transmission of the recordation notice, the notice will be printed and mailed to the sender by U.S. Postal Service first class mail. Recorded documents will not be returned with the “Notice of Recordation.”

Any assignment-related document for patent matters submitted by facsimile must include:

(A) an identified application or patent number;
(B) one cover sheet to record a single transaction; and
(C) payment of the recordation fee by a credit card (use of the Credit Card form, PTO-2038 (see MPEP § 509 ), is required for the credit card information to be kept separate from the assignment records) or a USPTO Deposit Account.

The following documents cannot be submitted via facsimile:

(A) Assignments submitted concurrently with newly filed patent applications;
(B) Documents with two or more cover sheets (e.g., a single document with one cover sheet to record an assignment, and a separate cover sheet to record separately a license relating to the same property); and
(C) Requests for “at cost” recordation services.

The date of receipt accorded to an assignment document sent to the Office by facsimile transmission is the date the complete transmission is received in the Office. See MPEP § 502.01 . The benefits of a certificate of transmission under 37 CFR 1.8 are available.

If a document submitted by fax is determined not to be recordable, the entire document, with its associated cover sheet, and the Office “Notice of Non-Recordation” will be transmitted via fax back to the sender. Once corrections are made, the initial submission, amended, may then be resubmitted by mailing the corrected submission to the address set forth in 37 CFR 3.27 . Timely resubmission will provide the sender with the benefit of the initial receipt date as the recordation date in accordance with 37 CFR 3.51 .

The Patent and Trademark Assignment System assigns reel and frame numbers and superimposes recordation stampings on the processed and stored electronic images. Accordingly, copies of all recorded documents will have the reel and frame numbers and recordation stampings.

302.10 Electronic Submission of Assignment Documents [R-10.2019]

(i) Place a symbol comprised of letters, numbers, and/or punctuation marks between forward slash marks ( e.g. /Thomas O’ Malley III/) in the signature block on the electronic submission; or

37 CFR 1.4 Nature of correspondence and signature requirements.

(i) The S-signature must consist only of letters, or Arabic numerals, or both, with appropriate spaces and commas, periods, apostrophes, or hyphens for punctuation, and the person signing the correspondence must insert his or her own S-signature with a first single forward slash mark before, and a second single forward slash mark after, the S-signature ( e.g., /Dr. James T. Jones, Jr./); and
(ii) A patent practitioner (§ 1.32(a)(1) ), signing pursuant to §§ 1.33(b)(1) or 1.33(b)(2) , must supply his/her registration number either as part of the S-signature, or immediately below or adjacent to the S-signature. The number (#) character may be used only as part of the S-signature when appearing before a practitioner’s registration number; otherwise the number character may not be used in an S-signature.
(A) Presented in printed or typed form preferably immediately below or adjacent the S-signature, and
(B) Reasonably specific enough so that the identity of the signer can be readily recognized.
(3) Electronically submitted correspondence . Correspondence permitted via the Office electronic filing system may be signed by a graphic representation of a handwritten signature as provided for in paragraph (d)(1) of this section or a graphic representation of an S-signature as provided for in paragraph (d)(2) of this section when it is submitted via the Office electronic filing system.
(i) Certification as to the paper presented. The presentation to the Office (whether by signing, filing, submitting, or later advocating) of any paper by a party, whether a practitioner or non-practitioner, constitutes a certification under § 11.18(b) of this subchapter. Violations of § 11.18(b)(2) of this subchapter by a party, whether a practitioner or non-practitioner, may result in the imposition of sanctions under § 11.18(c) of this subchapter. Any practitioner violating § 11.18(b) of this subchapter may also be subject to disciplinary action. See § 11.18(d) of this subchapter.
(ii) Certification as to the signature. The person inserting a signature under paragraph (d)(2) or (d)(3) of this section in a document submitted to the Office certifies that the inserted signature appearing in the document is his or her own signature. A person submitting a document signed by another under paragraph (d)(2) or (d)(3) of this section is obligated to have a reasonable basis to believe that the person whose signature is present on the document was actually inserted by that person, and should retain evidence of authenticity of the signature. Violations of the certification as to the signature of another or a person’s own signature as set forth in this paragraph may result in the imposition of sanctions under § 11.18(c) and (d) of this chapter.
(5) Forms. The Office provides forms for the public to use in certain situations to assist in the filing of correspondence for a certain purpose and to meet certain requirements for patent applications and proceedings. Use of the forms for purposes for which they were not designed is prohibited. No changes to certification statements on the Office forms ( e.g., oath or declaration forms, terminal disclaimer forms, petition forms, and nonpublication request forms) may be made. The existing text of a form, other than a certification statement, may be modified, deleted, or added to, if all text identifying the form as an Office form is removed. The presentation to the Office (whether by signing, filing, submitting, or later advocating) of any Office form with text identifying the form as an Office form by a party, whether a practitioner or non-practitioner, constitutes a certification under § 11.18(b) of this chapter that the existing text and any certification statements on the form have not been altered other than permitted by EFS-Web customization.

Assignments and other documents affecting title may be submitted to the Office via the Office’s Electronic Patent Assignment System (EPAS). See the USPTO website at http://epas.uspto.gov for additional information regarding EPAS.

Any assignment related document submitted by EPAS must include:

(A) an identified application or patent number; and
(B) one cover sheet to record a single transaction which cover sheet is to be completed on-line.

The fee set in 37 CFR 1.21(h)(1) for recording an electronically submitted document is currently $0. Customers should check the current fee schedule on the Office website before submitting documents for recordation. If a recordation fee is required, see MPEP § 509 for detailed information pertaining to the payment of fees.

For an assignment document filed electronically, the signature of the person who signs the cover sheet must comply with 37 CFR 3.31(a)(7) or 37 CFR 1.4(d)(2) .

The date of receipt accorded to an assignment document sent to the Office by EPAS is the date the complete transmission is received in the Office.

If a document submitted by EPAS is determined not to be recordable, the entire document, with its associated cover sheet, and the Office "Notice of Non-Recordation" will be transmitted via fax back to the sender if possible. Once corrections are made, the initial submission, as amended, may then be resubmitted by mailing the corrected submission to the address set forth in 37 CFR 3.27 . Timely submission will provide the sender with the benefit of the initial receipt date as the recordation date in accordance with 37 CFR 3.51 .

301.01-Accessibility of Assignment Records
302.01-Assignment Document Must Be Copy for Recording
302.02-Translation of Assignment Document
302.03-Identifying Patent or Application
302.04-Foreign Assignee May Designate Domestic Representative
302.05-Address of Assignee
302.06-Fee for Recording
302.07-Assignment Document Must Be Accompanied by a Cover Sheet
302.08-Mailing Address for Submitting Assignment Documents
302.09-Facsimile Submission of Assignment Documents
302.10-Electronic Submission of Assignment Documents
303-Assignment Documents Not Endorsed on Pending Applications
304‑305-[Reserved]
306.01-Assignment of an Application Claiming the Benefits of a Provisional Application
307-Issue to Non-Applicant Assignee
308-Issue to Applicant
309-Restrictions Upon Employees of U.S. Patent and Trademark Office
310-Government License Rights to Contractor-Owned Inventions Made Under Federally Sponsored Research and Development
311-Filing of Notice of Arbitration Awards
312-[Reserved]
313-Recording of Licenses, Security Interests, and Documents Other Than Assignments
314-Certificates of Change of Name or of Merger
315-Indexing Against a Recorded Certificate
316-[Reserved]
317.01-Recording Date
317.02-Correction of Unrecorded Returned Documents and Cover Sheets
317.03-Effect of Recording
318-Documents Not to be Placed in Files
319-[Reserved]
320-Title Reports
321‑322-[Reserved]
323.01(a)-Typographical Errors in Cover Sheet
323.01(b)-Typographical Errors in Recorded Assignment Document
323.01(c)-Assignment or Change of Name Improperly Filed and Recorded by Another Person Against Owner’s Application or Patent
323.01(d)-Expungement of Assignment Records
324-Establishing Right of Assignee To Take Action in Application Filed Before September 16, 2012
325-Establishing Right of Assignee To Take Action in Application Filed On or After September 16, 2012

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COMMENTS

Patent Assignments in Employment Agreements
This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are ...
Employee Inventors and Patent Ownership: Whose Rights Are They Anyway?
When making determinations of patent ownership based on contractual obligations, courts have often deferred to state contract law. 7 However, when determining whether a patent assignment clause in an employment contract is an automatic assignment or merely an obligation to assign, the Federal Circuit's so-called FilmTec rule preempts state ...
Patent Assignments in Employment Agreements
Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in ...
PDF Patent Assignment Considerations within the U.S. and under the Patent
Assignment Considerations within the U.S. Stanford University v. Roche Molecular Systems, Inc. (131 S.Ct. 2188 (2011)) If using employment agreement, cannot be future interest ("obligated to assign") Must include present interest ("obligated to assign and hereby does assign") Are all employment contracts current under Stanford?
Patent Assignment: How to Transfer Ownership of a Patent
A patent assignment is an agreement where one entity (the "assignor") transfers all or part of their right, title and interest in a patent or application to another entity (the "assignee"). In simpler terms, the assignee receives the original owner's interest and gains the exclusive rights to pursue patent protection (through filing ...
Patent Assignments and Employee Designations
In a cautionary tale for employers, the court in IPVenture decided that the patent assignment language in Douglass Thomas's employment agreement was not sufficient to assign his patent rights to ...
Invention Assignment Agreements
Employee invention assignment agreements are one crucial tool for protecting intellectual property, but the laws governing them contain traps for the unwary. If the agreement is too narrow or ambiguous, it may allow inventions to slip away. Further, if the agreement fails to include certain provisions, it may be invalid in certain states.
PDF The Shifting Landscape of Patent Assignments
assignment agreement executed by a former employee that filed a set of provisional patent applications on personal inventions for his own venture within two mont hs of leaving his former employer was void. In that case, the former employer then sued the former employee, arguing that the employment contract included
Should You Sign an Inventions Assignment Agreement?
Fact-Checked. If you do creative, engineering, design, or development work, your employer might ask you to sign an invention assignment agreement: a contract giving your employer ownership rights in inventions and intellectual property you develop during your employment. Read on to learn whether these agreements are enforceable, what they ...
When a Promise Isn't Enough
IP Venture: Promise or Agreement to Assign in the Future Does Not Assign Employee Patent Rights to Employer. In a cautionary tale for employers, the court in IPVenture decided that the patent assignment language in Douglass Thomas's employment agreement was not sufficient to assign his patent rights to his employer. Thomas signed an ...
Patent assignments
While exploring patent assignments, it's also beneficial to explore into the tinges of. For further assistance and inquiries regarding filing electronic patent assignments, the Assignment Recordation Branch Customer Service Desk can be contacted at 571-272-3350 during business hours. Handling Reluctant Inventors.
Managing IP Ownership Issues with Employment Agreements
The "hired-to-invent" doctrine does not, however, transfer legal title to a patent. An agreement transferring all rights in the invention to the employer is always preferred. The language of an IP assignment provision included with an employment agreement is critical. Assignment provisions that have express, nonconditional language are likely ...
Do the Paperwork: How Properly Executing Patent Assignments Can Win
Properly prepared patent assignments and IP assignment clauses in employment agreements can play a critical role in an IPR proceeding — for example, by preventing your own patent applications from becoming invalidating prior art under 35 U.S.C. § 103(c). ... Thus, because of the lack of executed assignments or employment agreements, the ...
A Potential and Unintended Consequence of 'Routine' Patent Assignments
This type of assignment might occur when an employee signs an agreement at the onset of employment that assigns all future inventions and patent applications to the employer. The employee cannot warrant that any claims covering future applications resulting from his or her work are valid, as the inventions have not yet been made and the claims ...
EMPLOYMENT AGREEMENTS AND PATENT OWNERSHIP RIGHTS
A separate Assignment Agreement transferring intellectual property rights in an invention from the inventor employee to the employer is required. ... The co-inventor only signed an Employment Agreement. The patent identifies three co-inventors of the subject matter of the patent. For brevity sake, and to simplify this article, I identify the co ...
Considerations for Patent Assignments After Minerva Ruling
What follows is an analysis of practical considerations for a patent assignment, including sample assignment clauses that might be negotiated, in light of Minerva. Minerva reaffirmed the doctrine of assignor estoppel but limited its scope to what an assignor represents in assigning patent rights. The assignor is estopped from challenging the ...
Employment Agreements for Employee-Inventors Should Be ...
These agreements usually contain clauses that assign all of the inventor's patent rights to the employer and require the employee to assist the employer in securing patent rights. Whether an employer possesses title to a patent often turns on whether the assignment was expressly undertaken at the time of the signed agreement, or whether it was ...
Is Your Company's Patent Assignment Agreement Too Broad?
In the recently decided Whitewater West Industries, Ltd. v. Alleshouse case, the Federal Circuit invalidated a company's employment agreement that required an employee residing in California to assign his patent rights for a post-employment invention to the company. 1 While the district court found the company's employment agreement to be enforceable, the Federal Circuit disagreed, holding ...
Procuring U.S. Patents without a Signed Assignment of Patent Rights
Recording an assignment may be necessary to permit the assignee to "take action" in the patent application during prosecution and for the patent to issue in the name of the assignee. 37 CFR 1.46; MPEP §§ 301, 302, 605. In other words, assignees may face obstacles prosecuting a patent without an executed assignment.
Are you Sure You Own that Patent?
A patent also can't be enforced against an infringer unless all owners join the lawsuit. And lack of full ownership will impair a company's ability to sell or license a patent to others. But just making sure you have an "invention assignment" agreement for each inventor is not enough. The specific language and timing of the agreements ...
Patent Assignment Agreement
This Patent Assignment Agreement is a comprehensive document designed to facilitate the transfer of patent ownership from the original patent owner, known as the assignor, to another party, known as the assignee. A patent is a legal grant issued by the United States Patent and Trademark Office (USPTO) to an inventor, providing exclusive rights to make, use, and sell their invention for a ...
Sample Patent Assignments
To help you with this, three sample patent assignment agreements are provided below. They are intended to be used as follows: ASSIGNMENT OF RIGHTS OF PATENT: An assignment is intended for use for a patent that has been issued by the U.S. Patent and Trademark Office (USPTO). ASSIGNMENT OF RIGHTS TO APPLICATION: This type of assignment is for the ...
302-Recording of Assignment Documents
37 CFR 3.11 Documents which will be recorded. (a) Assignments of applications, patents, and registrations, and other documents relating to interests in patent applications and patents, accompanied by completed cover sheets as specified in § 3.28 and § 3.31, will be recorded in the Office. Other documents, accompanied by completed cover sheets ...

Patent Assignments in Employment Agreements – A Sometimes Overlooked, but Always Important, Component Intellectual property is often the most valuable asset a business can own.

Ensure that you have an assignment and not a mere promise to assign

Failure to obtain an automatic assignment can have negative consequences

Do not count on the hired-to-invent doctrine to result in ownership of employee inventions

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EMPLOYMENT AGREEMENTS AND PATENT OWNERSHIP RIGHTS

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Considerations for Patent Assignments After Minerva Ruling

Introduction

The Minerva Decision

Practical Considerations and Possible Assignment Clauses

Enforceability Considerations

Employment Agreements for Employee-Inventors Should Be Drafted to Assign Patent Rights at the Time the Agreement is Signed Rather than Requiring Later Acts

The C.R. Daniels Decision

Strategy and Conclusion

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