ASSIGNMENT AND RECORDING OF PATENTS - Patent law

Despite the differences between real property deeds and a patent, the chain of title associated with real property does have its corollary in patents in which a patent holder has assigned his rights to the claimed invention to one or more other parties.When a title to a piece of real property is transferred from one party to another, that transfer is typically recorded at the municipal registrar’s office. When the ownership of a patent is assigned from one party to another, that assignment should be recorded at the USPTO in the name of the new assignees. This recordation has the legal effect of providing notice as to who is the holder of record, much in the same way that the transfer of a deed to real property is recorded. The public notification effect of the recordation is important because it is possible that one party could attempt to assigna patent that he does not own to another party. In such a case, the rightful holder, by having his assignment recorded, serves to provide public notice of the fact that he is the rightful assignee.

If a legal entity is assigned an ownership interest in a patent but does not record it and that interest is subsequently assigned to a different legal entity, it is possible that the first entity could lose their interest by failing to record it.While this might not seem fair, it is entirely in the first assignee’s power to make sure their right is recorded.Like wise, before purchasing or licensing a U.S. patent or patent right (including patent applications), it is incumbent on the purchaser to search the USPTO’s record of assignments database to be sure the party transferring the right is the holder of record. Assignments can be viewed online by going to www.uspto.gov and searching assignments in the Public PAIR portion of the website.

An assignment of a patent right is an assignment of the complete ownership interest. In contrast, a license does not transfer the entirety of the ownership interest but rather a limited portion of that interest. For example, a license may apply for a limited time, geographical area, or field of use (where that field of use is less than actually claimed in the patent).While a license may be recorded in the USPTO, it does not have to be and usually is not. The reason is that the assignment recordation statute does not provide any sort of right of priority to one who has his license interest publicly recorded at the USPTO and so a purchaser of a patent takes the patent subject to any licensing rights that have been granted previously, even when those previous license grants have not been publicly recorded at the USPTO. Whethera party is acquiring the patent right by assignment or license, he needs to verify that the party transferring those rights has the legal ownership rights to do so. This verification includes not only checking the assignment register at the USPTO, as we just discussed, but also querying the patent assignee as to whether other licenses to the patents have been granted to any other party and, if so, reviewing those licenses to be sure that they do not impinge the scope of what he is attempting to acquire.

This verification process is typically part of the intellectual property due diligence under taken by the acquiring party prior to any actual transaction. Purchasing a patenting which either the transfer or does not have legal title or the patent is subject to certain types of previously issued licenses can impinge on one’s freedom to operate with the patented technology simply because somebody else might actually be the lawful owner of that property. This is much like buying a bogus deed to a piece of land; theerst while purchaser could be in for a big surprise when he attempts to take possession of the land. No body likes that kind of surprise.


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