equitable assignment in patent

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3 Types of Patent Rights to be transferred

This article discusses the transfer rights under the Patent Law, know here whether the ‘Patent Rights’ can be transferred. There are three main ways in which a patent can be transferred from one person (the patentee) to another:

• Granting a license
• Transmission.

License- A patent license is permission granted by the patentee to another person or company to make, use, or sell the patented invention. A license can be exclusive (granted to only one licensee) or non-exclusive (granted to multiple licensees).

Assignment- An assignment is a transfer of the entire ownership of the patent from the patentee to another person or company. This requires a written document, called an assignment deed, which must be signed by both the assignor (the patentee) and the assignee (the person or company receiving the assignment).

Transmission- Transmission refers to the transfer of ownership of a patent due to the death of the patentee. The patent will be transferred to the patentee’s heirs or estate, as specified in their will or according to the laws of inheritance in the relevant jurisdiction.

It’s important to note that a patent can also be abandoned by the patentee, in which case it will no longer be in effect.

Table of Contents

The patentee is entitled to give a licence of right for making use of the patent to any person in accordance with the procedure prescribed in the Patent Act and Rules . Patent licenses can be of two types-

• Compulsory License
• Licences of rights

COMPULSORY LICENSE (SEC 84 OF PATENT ACT, 1970)

At any time after the expiration of three years from the date of the grant of a patent, any person interested may make an application to the Controller for the grant of compulsory licence on patent on any of the following grounds-

  (a).  that the patented invention has not satisfied the reasonable requirements of the public,

  (b). that the availability of such patent invented is not on reasonable price,

  (c). that in India the patent invented is not working.

‘LICENCES OF RIGHT’

Before the amendment in 2002 to the Patent act 1970, if the comptroller determines that the patented invention has not been satisfied (made available to the public) or is not available to the public at a reasonable price, he or she has the authority to issue an order for the patent to be endorsed with the words “licences of right.” This endorsement is intended to serve the public interest by ensuring that the patented invention is made available to the public at a reasonable price.

If a patent has been endorsed with the words “licences of right,” then any person interested in working (using or exploiting) the patented invention in India may require the patentee to grant them a license for that purpose after the expiration of 3 years from the date of endorsement. The terms of the license must be mutually agreed upon by the patentee and the licensee. This provision allows the public to gain access to patented inventions that are not being made available or are not being made available at a reasonable price, helping to ensure that the patented inventions are used for the benefit of the public.

PUBLIC USE OF AN INVENTION

Public use and exercise of an invention refer to the use and exploitation of the invention in public, rather than by the public. In other words, the invention is being used or exercised in a way that is visible or accessible to the general public. For a patent to be considered void (invalid), the invention and the manner in which it can be used must be made known to the public through a description in a work that has been publicly circulated, or through a specification that has been enrolled. It is not necessary for the invention to be actually used by the public or for it to be widely known to the public for a patent to be considered void. This provision is intended to ensure that patented inventions are used for the benefit of the public, rather than being kept secret or restricted from use.

A license is a legal agreement that allows a person or entity (the licensee) to use a patented invention in a specific manner. A license can be express (explicitly granted in writing), implied (arising through the actions or conduct of the parties), or statutory (provided for by law). A license can also be exclusive, non-exclusive, or limited. An exclusive license grants the licensee the exclusive right to use the patented invention, meaning that no one else, including the patentee, can use the invention without the permission of the licensee. A non-exclusive license, on the other hand, allows the patentee and others to use the patented invention. A limited license places certain restrictions on the use of the patented invention, such as limiting the licensee to using the invention in a specific place, for a specific time period, or for a specific purpose. A sole license is similar to an exclusive license, but it only prevents others (besides the patentee) from using the patented invention, rather than preventing the patentee from using the invention as well.

ASSIGNMENTS

A patentee has the right to assign their patent rights to another person or entity, either in whole or in part. The assignee becomes the owner of the assigned patent rights and has the same rights and responsibilities as the original patentee. When there are two or more assignees, they become co-owners of the patent, which means that they all have equal rights and responsibilities in relation to the patent. It is important to note that the assignment of a patent must be in writing and must be registered with the relevant patent office in order to be effective.

Assignments of the patent can be done in 2 different ways as follows-

• Legal Assignment- An assignment is a legal transfer of ownership of a patent from the original patentee (also known as the “assignor”) to the assignee. An agreement to assign is a document that sets out the terms and conditions under which a patent will be assigned in the future. Once the assignment is complete and the necessary documentation has been filed with the relevant patent office, the assignee becomes the legal owner of the patent and has the same rights and responsibilities as the original patentee. The assignee’s name can then be entered in the register of patents as the proprietor of the patent, and they can exercise all the rights of the proprietor of a patent.
• Equitable Assignment- An equitable assignment is a transfer of ownership of a patent that is based on an agreement between the assignor (the original patentee) and the assignee. An equitable assignment can be made by any document, such as a letter or undertaking that clearly sets out the terms of the assignment. An equitable assignment is effective immediately and can be made even while a patent application is still pending. In equity, the assignee is entitled to their share of the patent, but legally, the patentee is still treated as the proprietor of the patent until a legal assignment is made. An equitable assignee cannot have their name entered in the register of patents as the proprietor of the patent until they obtain a legal assignment. However, they can take legal action against the assignor/patentee to compel them to execute a legal assignment.

TRANSMISSION

When the patentee dies, their interest in the patent passes to their legal representative as part of their estate, just like any other property. The legal representative is responsible for managing the patent and can transfer it to another party if they choose to do so. Similarly, if the patentee becomes insolvent or bankrupt, the patent may be transferred to a creditor as part of the bankruptcy or insolvency proceedings. In the case of a company, if the company is dissolved, the patent may be transferred to one of the shareholders or to a third party. The specific process for transferring a patent in these cases will depend on the laws of the country in which the patent was granted

A patent is a legal protection granted to an inventor for a certain period of time, in exchange for disclosing their invention to the public. A patent gives the patent owner the right to exclude others from making, using, selling, and importing the patented invention without the owner’s permission. There are three main ways in which a patent can be transferred from one person (the patentee) to another: by granting a license, by assignment, or by transmission.

A patent license is permission granted by the patentee to another person or company to make, use, or sell the patented invention. A license can be exclusive (granted to only one licensee) or non-exclusive (granted to multiple licensees).

An assignment is a transfer of the entire ownership of the patent from the patentee to another person or company. This requires a written document, called an assignment deed, which must be signed by both the assignor (the patentee) and the assignee (the person or company receiving the assignment).

Transmission refers to the transfer of ownership of a patent due to the death of the patentee. The patent will be transferred to the patentee’s heirs or estate, as specified in their will or according to the laws of inheritance in the relevant jurisdiction.

It’s also important to note that a patent can be abandoned by the patentee, in which case it will no longer be in effect.

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• 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

Don't miss a new article. Henry Patent Law's Patent Law News + Insights blog is designed to help people like you build smart, scalable patent strategies that protect your intellectual property as your business grows. Subscribe to receive email updates every time we publish a new article — don't miss out on key tips to help your business be more successful.

India: Ownership And Forms Of Transfer Of Patents Rights In India- A Primer

Introduction.

Once a patent for an invention is granted, it is important to consider (1) if the patentee/proprietor of the patent is going to manufacture, market, sell and/or distribute the invention, (2) whether the patentee/proprietor of the patent is going to sell all rights in his/her invention to someone else for a sum of money, or (3) if the patentee/proprietor of the patent will license someone else to produce and bring the patented product to market under specified terms by the Patentee that must be met for the licensee. This article discusses how one may effect, use or monetize the patented invention.

A patent is considered as a transferrable property that can be transferred from the original patentee to any other person by assignment or by operation of law. A patent can be licensed or assigned only by the owner of the patent. In case of co-owners or joint-owners, a co-owner can assign or license the patent only upon consent of the other owner(s).

Requirements for creation of any interest in a patent:

Section 68 of the Indian Patents Act 1970 provides for the mortgage of, license or creation of any interest in the patent.

" Assignments, etc., not to be valid unless in writing and duly executed. 1 —An assignment of a patent or of a share in a patent, a mortgage, license or the creation of any other interest in a patent shall not be valid unless the same were in writing and the agreement between the parties concerned is reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and duly executed "

Requirements 2 :

• The assignment, mortgage or license should be reduced to writing in a document embodying all the terms and conditions governing the rights and obligations between the parties;
• An application for registration of such document should be filed in the prescribed manner in Form-16 within the time prescribed under section 68. The document when registered will have effect from the date of execution.

Forms/Nature of Transfer of Patent Rights:

Grant of a Patent confers to a patentee the right to prevent others from making, using, exercising or selling the invention without his permission. The following are the ways in which a patentee can deal with the patent:

• Transmission of patent by operation of law

1. Assignment

The term 'assignment' is not defined in the Indian Patents Act. Assignment is an act by which the patentee assigns whole or part of his patent rights to the assignee who acquires the right to prevent others from making, using, exercising or vending the invention. There are three kinds of assignments

• Legal Assignment
• Equitable Assignment

Legal Assignment : An assignment (or an agreement to assign) of an existing patent is a legal assignment, where the assignee may enter his name as the patent owner. A patent which is created by deed can only be assigned by a deed. A legal assignee entitled as the proprietor of the patent acquires all rights thereof.

Equitable Assignments : Any agreement including a letter in which the patentee agrees to give a certain defined share of the patent to another person is an equitable assignment of the patent. However an assignee in such a case cannot have his name entered in the register as the proprietor of patent. But the assignee may have notice of his interest in the patent entered in the register.

Mortgages: A mortgage is an agreement in which the patent rights are wholly or partly transferred to assignee in return for a sum of money. Once the assignor repays the sum to the assignee, the patent rights are restored to assignor/patentee. The person in whose favor a mortgage is made is not entitled to have his name entered in the register as the proprietor, but he can get his name entered in the register as mortgagee.

2. Licenses:

The Patents Act allows a patentee to grant a License by the way of agreement under section 70 of the Act. A patentee by the way of granting a license may permit a licensee to make, use, or exercise the invention. A license granted is not valid unless it is in writing. The license is contract signed by the licensor and the licensee in writing and the terms agreed upon by them including the payment of royalties at a rate mentioned for all articles made under the patent. Licenses are of the following types,

• Voluntary License
• Statutory License(such as compulsory License)
• Exclusive/Limited License
• Express/Implied License

Voluntary licenses:

It is the license given to any other person to make, use and sell the patented article as agreed upon the terms of license in writing. Since it is a voluntary license, the Controller and the Central government do not have any role to play. The terms and conditions of such agreement are mutually agreed upon by the licensor and licensee. In case of any disagreement, the licensor can cancel the licensing agreement.

Statutory licenses:

Statutory licenses are granted by central government by empowering a third party to make/use the patented article without the consent of the patent holder in view of public interest. Classic example of such statutory licenses is compulsory licenses. Compulsory licenses are generally defined as "authorizations permitting a third party to make, use, or sell a patented invention without the patent owner's consent 3 .

Compulsory Licenses(CLs)

Though CLs works against the interest of the patent holder, it is granted under certain provided conditions under the Patents Act. Under section 84 of the Indian Patents Act 1970, any person can make an application for grant of a compulsory license for a patent after three years, from the date of grant of that patent, on any of the following grounds:

(a) The reasonable requirements of the public with respect to the patented invention have not been satisfied; (b) The patented invention is not available to the public at a reasonably affordable price. (c) The patented invention has not worked in the territory of India.

Under Section 92 A of the Act, CLs can also be granted for exporting pharmaceutical product(s) to any country incapable of manufacturing pharmaceutical products for the benefit of the people in that country, further when working of the patent required another related patent under Section 88 of the Act or on notification by the Central Government, the controller can grant a license to an interested person. The Central or State Government can use the invention or its process for its own purpose either with or without royalty.

Exclusive Licenses and Limited Licenses:

Depending upon the degree and extent of rights conferred on the licensee, a license may be Exclusive or Limited License. An exclusive license excludes all other persons including the patentee from the right to use the invention. Any one or more rights of the patented invention can be conferred from the bundle of rights owned by the patentee. The rights may be divided and assigned, restrained entirely or in part. In a limited license, the limitation may arise as to persons, time, place, manufacture, use or sale.

Express and Implied Licenses:

An express license is one in which the permission to use the patent is given in express terms. Such a license is not valid unless it is in writing in a document embodying the terms and conditions. In case of implied license though the permission is not given in express terms, it is implied from the circumstances. For example: where a person buys a patented article, either within jurisdiction or abroad either directly from the patentee or his licensees, there is an implied license in any way and to resell it.

3. Transmission of Patent by Operation of law

When a patentee dies, his interest in the patent passes to his legal representative; in case of dissolution or winding up of a company or bankruptcy transmission of patent by operation of law occurs.

Conclusion:

An assignment is the transfer of all the proprietary rights by the patentee to the assignee while the license is the right granted to work the invention by withholding the proprietary rights with the patentee 4 . An assignee can in turn reassign his rights to third parties while the licensee cannot change the title or cannot reassign his rights to the third person. An assignee is assigned with all the rights that the patent owner can enjoy while the licensee cannot enjoy such rights. Also an assignee has the right to sue the infringer while the licensee is not empowered with the rights to sue any party for the infringement of the patent in his name. Having known the difference between assignment and license from the aforesaid, the patentee can decide the best possible way of commercializing his/her invention.

1. https://indiankanoon.org/doc/1027357/

2. Patent Law, Fourth edition , P.Narayanan, Eastern Law House, Pg: No:268

3. F.M. SCHERER & JAYASHREE WATAL, POST-TRIPS OPTIONS FOR ACCESS TO PATENTED MEDICINES IN DEVELOPING COUNTRIES 13 (Comm'n on Macroeconomics & Health, Working Paper No. WG4:1, 2001), available at http://www.cmhealth.org/docs/-wg4_paper1.pdf (last visited Dec. 16, 2013 ).

4. IPR, Biosafety and Bioethics, Deepa Goel, Shomini Parashar, Pg Nos 88-89

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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• Introduction
• Recent Case Highlights
• Public Policies Limiting Patents
• Under-Utilized Defenses
• Who Decides What When?
• a) general canons of construction
• b) role of other claims
• c) role of specification
• d) role of prosecution history
• e) role of prior art, experts, and extrinsic evidence
• f) claim preamble
• g) claim transition
• h) method claims
• i) non-method claims
• j) particular claim language
• Content And Form Of A Claim Construction
• Relationship To Certain Defenses
• a) whether sec. 112(6/f) treatment invoked
• b) construction of sec. 112(6/f) claim element
• c) relationship to claim differentiation
• a) preamble
• b) printed matter, instructions on use, mental steps
• c) non-functional descriptive material
• d) intended use
• e) wherein and whereby clauses
• f) intended result
• g) process portion of product-by-process claim
• h) source or process restrictions in product claim or product limitation
• i) optional, conditional steps
• j) input signals in a circuit
• k) theory of operation
• Non-Infringement
• Expiration of Patent; Extension Of Term
• Dedication to Public
• a) sec. 112(6/f) element
• b) product-by-process claim
• c) reverse doctrine of equivalents
• a) required evidence
• b) matter of law restrictions
• c) prosecution history estoppel
• d) disclosure-dedication restriction
• e) relationship to sec. 112(6/f)
• Sec. 271(a) (Direct) Infringement Of Any Type Of Claim
• a) "use" of claimed method
• b) "offer to sell" a method
• a) “makes” claimed invention
• b) “uses” claimed invention
• c) “sells” or "imports" claimed invention
• d) “offers to sell” claimed invention
• Sec. 271(a) (Direct) Multi-Actor (Divided; Joint) Infringement
• Sec. 271(a) (Direct) Infringement To Support Indirect Infringement
• Indirect Infringement Requires Knowledge Of Patent
• a) communication to direct infringer
• b) knowledge of infringement
• c) relevance of litigation defenses
• d) relevance of clearance opinion
• e) relevance of non-infringing uses
• f) relevance of instructions to users
• g) relevance of efforts to avoid infringement
• a) knowledge of infringement
• b) “offers to sell or sells”
• c) “component,” “material or apparatus”
• d) “material part of the invention”
• e) substantial non-infringing use
• Sec. 271(e)(2) Infringement (e.g., ANDA)
• Sec. 271(e)(1) “Safe Haven”
• a) “component”
• b) sec. 271(f)(1)
• c) sec. 271(f)(2)
• a) “a product”
• b) “made by a patented process”
• c) sec. 295 shifting burden of proof
• d) sec. 287(b) restriction on damages
• a) abatement
• b) intervening rights
• c) “substantially identical” claim scope
• d) relationship to pending litigation
• Presumptions And Burdens
• Assignor And Licensee Estoppel
• Person Having Ordinary Skill In The Art (“PHOSITA”)
• a) Alice step one
• b) Athena Diagnostics En Banc Rehearing Denial
• c) improvement to computer or machine functionality
• d) categories of patent-ineligible subject matter
• f) Alice step two
• g) idea’s breadth immaterial
• h) idea’s novelty immaterial
• i) idea’s utility immaterial
• j) preemption of idea
• k) machine-or-transformation “test”
• l) non-method claims
• m) when decided?
• Utility (Sec. 101)
• Regards As The Invention (Sec. 112(2/b))
• a) post-Nautilus decisions
• b) ambiguous claims
• c) unclear how to test for compliance
• d) requiring forward-looking assessments of likely future results
• e) terms of degree
• f) functional (and result) claims
• g) coined terms
• h) hybrid claims
• i) “consisting essentially of” claims
• j) impossibility in claim
• k) correction of errors in claim
• l) who decides what when?
• Particular And Distinct Claims (aka Indefiniteness) (Sec. 112(2/b) + Sec. 112(6/f))
• a) which disclosure governs
• b) support “full scope” of claim
• c) omission of non-optional element
• d) original claims
• e) functional claims
• f) genus claims
• g) relationship to enablement
• b) enable “full scope” of claim
• c) undue/unreasonable experimentation
• d) teaching away
• Best Mode (Sec. 112(1/a))
• a) "filed before"
• b) patent owner’s burden
• “Invention” Date (Sec. 102(g))
• (FITF) U.S. Patents/Published Apps Qualifying As Prior Art (Sec. 102(a)(2) (AIA))
• (FITF) Other Prior Art (Sec. 102(a)(1) (AIA))
• a) ready for patenting
• b) commercial offer for sale
• c) may be secret
• d) method claims
• Public Use Bar
• Experimental Sale Or Use
• a) third-party on sale/public use
• b) “printed publication” (sec. 102(a), (b))
• c) sec. 102(e) prior art
• d) applicants’ “publications”/disclosures
• e) patent owner’s other patents
• f) prior invention (sec. 102(g)) [by one of the co-inventors]
• g) prior invention (sec. 102(g)) [by third party]
• h) derivation from others; derived knowledge (sec. 102(f))
• i) “known or used by others” in U.S. (sec. 102(a))
• j) applicant admitted prior art and knowledge
• k) overcoming putative prior art
• a) inherent disclosure
• b) genus - species
• c) method claims
• d) apparatus claims
• e) reference enabling
• f) single reference
• g) expert testimony
• h) relationship to written description support
• a) analogous art
• b) what a reference teaches
• c) teaching away
• d) motivation to combine or modify art
• e) reasonable expectation of success
• f) the manner in which the invention was made
• g) objective indicia of non-obviousness (secondary considerations)
• h) nexus to claimed invention
• i) objective indicia of obviousness
• j) admissions and omissions supporting obviousness
• k) genus – species
• l) method claims
• m) obvious as a matter of law
• Sec. 135 Repose
• a) same invention
• b) obviousness-type (non-statutory)
• c) terminal disclaimer
• d) safe harbor for “divisionals”
• Broadening Reissue, Reexam, IPR Or PGR (Secs. 251, 305, 314, 316, 326)
• Inventorship (Secs. 101, 102(f), 116, 256)
• Abandonment Of Invention (Sec. 102(c))
• Disclaimer Of Claim (Sec. 253(a))
• Oath Defect
• Other Defects
• Unclean Hands
• Likely Survives Therasense
• Pleading Requirements
• Effect Of Finding Inequitable Conduct
• Ownership/Standing

Assignments

• Bona Fide Purchaser (Sec. 261)
• Constitutional And Statutory (fka “Prudential”) Standing
• Co-Ownership Of Patent
• License/Exhaustion
• Exhaustion; First Sale Doctrine
• Implied License
• Acquiescence
• Legal Estoppel
• Equitable Estoppel
• Increased Damages; Non-Willfullness- Basics
• Willfulness
• Pre- Halo Willfulness And Increased Damages
• Opinion Of Counsel
• Waiver Of Privilege
• Who Decides Willfulness Or Misconduct?
• Enhancement of Damages
• Damages and Other Monetary Remedies – Basics
• a) time limitation on damages
• b) sec. 287 marking; notice of claim; impact on damages
• c) indirect-infringement damages limited to extent of direct infringement
• d) apportionment
• e) limits re: extraterritorial reach (foreign activities)
• f) failure to mitigate damages
• g) “benefit rule” in mitigation of damages
• a) lost sales
• b) reduced prices/price erosion
• Lost Royalties
• Established Royalty
• a) Georgia-Pacific factors
• b) hypothetical negotiation
• c) royalty base; entire market value rule
• d) royalty rate
• e) rejected reasonable royalties methodologies
• f) FRAND standard essential patents
• Supplemental Damages
• Prejudgment Interest
• Provisional Rights; Pre-Issuance Reasonable Royalty (Sec. 154(d))
• Post-Judgment (“Ongoing”) Royalties
• Equitable Principles Governing Injunction
• Irreparable Harm
• Legal Remedies Inadequate
• Balance of Hardships
• Serves Public Interest
• Preliminary Injunction
• Scope Of Injunction
• Contempt Of Injunction
• ITC Remedies
• Court Of Federal Claims
• Claim Preclusion
• Issue Preclusion
• Kessler Doctrine
• Judicial Estoppel
• AIA Trial-Based Estoppel
• Prosecution Laches
• Reissue Recapture Rule
• Reissue/Reexamination Defects
• Improper Claim Structure Under Sec. 112(4/d)
• Improper Adjustment Or Extension Of Patent Term
• Cross-Appeal Rule
• Scope Of Issues Limited After Appeal
• Sovereign Immunity
• Medical Practitioner Immunity
• Lack Of Personal Jurisdiction
• Improper Venue
• Sanctions and Fees Against Patent Owner- Basics
• Cases Awarding Fees
• Cases Denying Fees
• “Exceptional Case”: Factors For And Against
• Prevailing Party
• Amount Of Fees Award
• Rule 11 Sanctions
• Counter-Attacks
• BASICS : Although an assignment must be in writing,  35 U.S.C. § 261 , ownership can be transferred by other means not requiring a writing, such as through intestate succession laws. Sky Tech. (Fed. Cir. 08/20/09); see Vapor Point (Fed. Cir. 08/10/16) (O’Malley, J., Concurring) (recommending court overrule precedent suggesting in-writing requirement can be superseded under state law). Exclusive license with right to sue need not be in writing. Bard Peripheral III (Fed. Cir. 01/13/15). Written assignment or document memorializing prior assignment must be made pre-suit. Bard Peripheral III (Fed. Cir. 01/13/15). Post-complaint “nunc pro tunc assignments are not sufficient to confer retroactive standing” under Sec. 281, even if preceded supplemental or amended complaint. Alps South (Fed. Cir. 06/05/15) (although patent owner can be added post-complaint to cure standing defect); but see Sealant (Fed. Cir. 06/11/15) (non-precedential) (standing is claim-by-claim and need exist at time claim first made in the action).
• Must Convey Undivided Interest Or Exclusive Patent Right To Constitute Assignment : “‘To create an assignment, a contract must transfer: (1) the entire exclusive patent right, (2) an undivided interest in the patent rights, or (3) the entire exclusive right within any geographical region of the United States.’” Diamond Coating (Fed. Cir. 05/17/16) (no assignment of all substantial rights where original patent owner retains a right to make, use and sell patented products, plaintiff’s rights to license or enforce are restricted, and plaintiff did not obtain right to practice the patent).
• “Hereby Grants” (Present Tense Active Verbs) Conveys Legal Title; “Agrees To Assign” (Passive Verbs In Indefinite Or Future Tense) Conveys Only Equitable Title : A party with legal title to a patent has standing to sue even if it may not have equitable title and, conversely, a party with equitable title but no legal title lacks standing. The issue normally arises where someone agrees to assign patent rights in future inventions, but fails to actually assign them. If one uses “does hereby grant [or “assign”]” (rights in any future inventions to the assignee) language, then legal title will pass by operation of law once the invention comes into existence.  See Stanford (Fed. Cir. 09/30/09) (where inventor first entered an “agree to assign” contract with Stanford giving it equitable rights in future inventions, but then inventor entered a “hereby assign” contract with defendant’s predecessor in interest, and then made invention and application was filed, legal title automatically transferred to that predecessor upon filing of the application, so legal title was in defendant when inventor later assigned rights to Stanford; and Stanford not “bona fide purchaser as it had constructive notice of the “hereby assign” contract), aff’d on other grounds , Bd. of Tr. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc. (U.S. 06/06/2011) (but two Justices question Fed. Cir. distinction between “agree to assign” and “hereby assign”); Omni Medsci (Fed. Cir. 08/02/21) (2-1) (aff’g denial of R. 12(b)(1) mtn. for lack of standing; bylaws’ provision that certain patents “shall be the property of the University” did not “automatically and presently assign[] legal title” to the inventions, in part because does not use present-tense active verbs); Preston (Fed. Cir. 07/10/12) (aff’g Summ. J. of no standing because plaintiff employee’s employment agreement automatically assigned (“does hereby assign” any invention conceived or made while employed) patent rights to employer (the defendant)); Advanced Video II (Fed. Cir. 01/11/18) (2-1) (aff’g dismissal of complaint for lack of standing: “will assign” provision in employment agreement was a mere promise to assign to employer (putative predecessor in interest to plaintiff)); Filmtec (Fed. Cir. 07/22/91) (vacating preliminary injunction in view of serious doubts re who has title to patent; an assignment of rights in an invention made prior to the existence of the invention is an assignment of an expectant interest conveying equitable title to the assignee which, “once the invention is made and an application for patent is filed,” conveys legal title to the assignee and the assignor has nothing left to assign). But “will be assigned” or “agree to assign” language transfers only equitable title, not legal title. Speedplay (Fed. Cir. 03/01/00) (aff’g plaintiff obtained substantially all rights in patent from the inventor via a “hereby … assigns” provision); SiRF Tech. (Fed. Cir. 04/12/10) (aff’g that petitioner in ITC had standing, because respondent failed to show that invention fell within scope of one inventor’s automatic assignment to another company; recording in PTO an assignment from inventor to the plaintiff shifts burden of proof (production?) to challenger to challenge that assignment by, e.g., proving earlier assignment by inventor to another company); Abraxis (Fed. Cir. 11/09/10) (plaintiff lacked standing when complaint was filed because promise to assign was not present assignment, and attempt to cure retroactively failed), rehearing en banc denied (Fed. Cir. 03/14/11); Gellman (Fed. Cir. 11/30/11) (non-precedential) (“this court has consistently required that present assignments of future rights expressly undertake the assigning act at the time of the agreement, and not leave it to some future date”).
• Transfer Of Ownership Of Software Developed Does Not Necessarily Assign Patent Rights : A software development contract giving company exclusive rights to the software does not necessarily grant ownership rights in any patentable methods or systems invented in creating such software. James (Fed. Cir. 04/20/18) (rev’g dismissal of suit for correction of inventorship for lack of standing; if plaintiff proves sole inventorship then he may own the patents).
• Bayh-Dole Act Does Not Assign Inventors’ Rights To Their Federally Funded Employers : It is a “basic principle of patent law that inventors own their inventions.” Bayh-Dole Act does not deprive inventors of their interest in federally funded inventions. 201(e)’s “any invention of the contractor” does not refer to all inventions of the contractor’s employees, but rather to “those owned by or belonging to the contractor.” “The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.” Bd. of Tr. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc. (U.S. 06/06/2011).
• State Law Governs Interpretation Of Contract Purportedly Assigning Invention, But Federal Law Governs Whether Automatic Assignment : Abbott Point (Fed. Cir. 01/13/12) (2-1) (aff’g plaintiff did not own patent or have standing);  Intellectual Ventures (Erie Indemnity) (Fed. Cir. 03/07/17) (aff’g dismissal for lack of standing; “whether a patent assignment clause creates an automatic assignment or merely an obligation to assign” is a question of federal law); Schwendimann (Fed. Cir. 05/13/20) (2-1) (aff’g assignment valid, and properly reformed under state law, despite misnaming assignee, in view of other writings showing correct intended assignee; “by virtue of the reformation, the written instrument was corrected nunc pro tunc , to the point of the assignment”).
• Termination Upon Failure Of Condition Subsequent Does Not Necessarily Defeat Transfer Being Deemed An Assignment : “An assignment of a patent ‘may be either absolute, or by way of mortgage and liable to be defeated by non-performance of a condition subsequent.” Vaupel (Fed. Cir. 09/13/91) (transfer granted all substantial rights, despite retaining “1) a veto right on sublicensing by Vaupel; 2) the right to obtain patents on the invention in other countries; 3) a reversionary right to the patent in the event of bankruptcy or termination of production by Vaupel; and 4) a right to receive infringement damages.”) But see Propat (Fed. Cir. 01/04/07) (grant did not transfer all substantial rights; the power “to terminate the agreement and end all of Propat’s rights in the patent if Propat fails to perform up to the specified benchmarks, although not dispositive, is yet another indication that Authentix retains a significant ownership interest in the patent”).

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Equitable Assignment: Everything You Need to Know

An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness. 3 min read updated on February 01, 2023

An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness.

Equitable Assignment

An equitable assignment may not appear to be self-evident by the law's standard, but it presents the assignee with a title that is protected and recognized in equity. It's based on the essence of a declaration of trust; specifically, essential fairness and natural justice. As long as there is valuable consideration involved, it does not matter if a formal agreement is signed. There needs to be some sort of intent displayed from one party to assign and the other party to receive.

The evaluation of a righteous equitable assignment is completed by determining if a debtor would rationally pay the debt to another party alleging to be the assignee. Equitable assignments can be created by:

• The assignor informing the assignee that they transferred a right to them
• The assignor instructing the other party to release their obligation from the assignee and place it instead on the assignor

The only part of an agreement that can be assigned is the benefit. Generally speaking, there is no prerequisite for the written notice to be received or given. The significant characteristic that separates an equitable assignment from a legal assignment is that most of the time, an equitable assignee may not take action against a third party. Instead, it must rely on the guidelines governing equitable assignments. In other words, the equitable assignee must team up with the assignor to take action.

The Doctrine of Equitable Assignment in Wisconsin

In Dow Family LLC v. PHH Mortgage Corp ., the Wisconsin Supreme Court issued in favor of the doctrine of equitable assignment. The case was similar to many other foreclosure cases, except this one came with a twist. Essentially, Dow Family LLC purchased a property and the property owner insisted the mortgage on the property had been paid off. However, in actuality, it wasn't. 

Prior to the sale, the mortgage on the property was with PHH Mortgage Corp. When PHH went to foreclose on the mortgage, Dow Family LLC contested it. There was one specific rebuttal that caught the attention of the Wisconsin Supreme Court. The official mortgage on record was with MERS, an appointee for the original lender, U.S. Bank.

Dow argued that PHH couldn't foreclose on the property because the true owner was MERS. Essentially, Dow was stating that the mortgage was never assigned to PHH. Based on this argument, PHH utilized the doctrine of equitable assignment.

Based on a case from 1859, Croft v. Bunster, the court determined that the security for a note is equitably assigned when the note is assigned without a need for an independent, written assignment. Additionally, Dow contended that the statute of frauds prohibits the utilization of the doctrine, mainly because it claimed every assignment on a property must be formally recorded.

During the case, Dow argued that the MERS system, which stored the data regarding the mortgage, was fundamentally flawed. According to the court, the statute of frauds was satisfied because the equitable assignment was in accordance with the operation of law. Most importantly, the court avoided all consideration regarding the MERS system, concluding it was not significant in their decision. 

The outcome was a major win for lenders, as they were relying on the doctrine specifically for these types of circumstances.

Most experts agree that this outcome makes sense in the current mortgage-lending environment. This is due to the fact that it is still quite common for mortgages to be bundled up into mortgage-backed securities and sold on the secondary market.

Many economists claim that by not requiring mortgages to be recorded each time a transfer is completed, the loans are more easily marketed to investors. Additionally, debtors know who their current mortgage company is because the new lender must always notify the current borrower in order to receive payment. It was determined that recording and documenting the mortgage merely provides a signal to the rest of the world that the property owner secures a debt.

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Supreme Court Limits Patent Assignor Estoppel

In Minerva Surgical, Inc. V. Hologic, Inc. , the Supreme Court limited the equitable doctrine of assignor estoppel that prevents an assignor from subsequently challenging the validity of the patent he or she assigned. The Court outlined three scenarios where assignor estoppel might not apply, and has employers wondering if and how they can better shield their patents from subsequent inventor challenges.

The Backstory

For inventor-assignor estoppel to come into play, an inventor has to assign his or her rights in a patent application or patent and then be in a situation where he or she wants to challenge the validity of the assigned patent. Minerva illustrates one scenario where that may occur: an inventor (Mr. Truckai), having assigned patent rights to his employer, subsequently leaves that position and starts a competing company (Minerva) that eventually is charged with infringement of his assigned patents (U.S. Patent Nos. 6,872,183 and 9,095,348).

Critical to the Court’s decision in Minerva , the patents at issue were granted after the inventor had assigned his rights. It is also interesting that one of the patents stems from a continuation application that was filed and granted after he had left and started the competing company.

• In August 1998, Truckai and his co-inventors assigned the invention described in U.S. Patent Application No. 09/103,072, the application, and all continuation applications thereof (etc.).
• After a series of divisional and continuation applications, the application that was granted as U.S. Patent No. 9,095,348 was filed in 2013, and the patent granted in 2015.
• In February 2001, Truckai and his co-inventors assigned the invention described in U.S. Patent Application No. 09/710,102, the application, and all continuation applications thereof (etc.).
• After a series of continuation applications, the application that was granted as U.S. Patent No. 6,872,183 was filed in 2004, and the patent granted in 2005.

Assignor Estoppel

The Supreme Court explains that the doctrine of assignor estoppel was developed “to deal with inconsistent representations about a patent’s validity.”:

The classic case (different in certain respects from the one here) begins with an inventor who both applies for and obtains a patent, then assigns it to a company for value. Later, the inventor/assignor joins a competitor business, where he develops a similar—and possibly infringing—product. When the assignee company sues for infringement, the assignor tries to argue—contrary to the (explicit or implicit) assurance given in assigning the patent—that the invention was never patentable, so the patent was never valid. That kind of about-face is what assignor estoppel operates to prevent—or, in legalese, estop.

The Supreme Court’s New Limitations on Assignor Estoppel

The Supreme Court declined Minerva’s invitation to eliminate the doctrine of assignor estoppel altogether, but agreed “Assignor estoppel should apply only when its underlying principle of fair dealing comes into play.” Thus, the Court delineated three scenarios where assignor estoppel might not apply:

• A change in the law. The Court explained:A second example is when a later legal development renders irrelevant the warranty given at the time of assignment. Suppose an inventor conveys a patent for value, with the warranty of validity that act implies. But the governing law then changes, so that previously valid patents become invalid. The inventor may claim that the patent is invalid in light of that change in law without contradicting his earlier representation. What was valid before is invalid today, and no principle of consistency prevents the assignor from saying so.
• When the claims at issue are materially broader than the claims assigned . The Court explained:Most relevant here, another post-assignment development—a change in patent claims—can remove the rationale for applying assignor estoppel. …. [T]he assignee, once he is the owner of the application, may return to the PTO to “enlarge[]” the patent’s claims. …. And the new claims resulting from that process may go beyond what “the assignor intended” to claim as patentable. …. Assuming that the new claims are materially broader than the old claims, the assignor did not warrant to the new claims’ validity. And if he made no such representation, then he can challenge the new claims in litigation: Because there is no inconsistency in his positions, there is no estoppel.

Question: Does this reasoning cast doubt on the USPTO’s practice of accepting a copy of an inventor’s oath or declaration from a parent application to satisfy the statutory requirement for an inventor’s oath or declaration in a continuation application?

Each of these “exceptions” rests on the same principle: “The limits of the assignor’s estoppel go only so far as, and not beyond, what he represented in assigning the patent application.” In other words, assignor estoppel only bars invalidity challenges that are inconsistent with representations inherent in making the assignment.

Having outlined these exceptions, the Supreme Court remanded to the Federal Circuit to assess whether the claims at issue were indeed “materially broader than the ones Truckai assigned.”

This phrasing bothers me, because there was no dispute that the inventor had effectively assigned the patents at issue. I believe the question on remand is whether the claims at issue are “materially broader” than the ones in existence when the assignments were executed.

The Dissenting Opinions

Justice Alito wrote a dissenting opinion explaining his views that the Court should address whether “ Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co. , 266 U. S. 342 (1924), which recognized assignor estoppel, should be overruled.” He criticizes both the majority and the principal dissent for “evading stare decisis .”

Justice Barrett wrote a dissenting opinion explaining her views that the 1952 Patent Act abrogated the doctrine of assignor estoppel altogether. Justices Thomas and Gorsuch joined her dissent.

Practical Limits of Assignor Estoppel

While employers may find it disconcerting that an inventor may be permitted to challenge his or her own patent, the Federal Circuit already decided that assignor estoppel does not apply to Inter Partes Review proceedings (or presumably Post Grant Review proceedings), because the governing statutes permit challenge by “a person who is not the owner of a patent.” Indeed, Minerva already had successfully invalidated some claims of the asserted patents in an IPR. Moreover, inventor-assignor estoppel will not necessarily prevent an inventor’s subsequent employer from challenging the assigned patent(s). Here, Minerva was found to be “in privity” with the inventor because he was the founder, President, and CEO. (This issue is discussed more in the underlying Federal Circuit decision .)

Maneuvering Around Minerva

Companies who want to prevent their employee-inventors from being able to subsequently challenge their patents may be considering several maneuvers around Minerva ’s holding. In view of the Court’s statement that assignor estoppel does not apply at all to employment agreement-type assignments which assign rights in future inventions not tied to any specific patent applications, it may be risky to rely on a “no challenge” clause in an employment agreement. Because the Court did not question the effectiveness of the original assignments, it may not be helpful to obtain second or “quitclaim”-type assignments for each patent granted in a given family. The most promising maneuvers could include giving monetary “patent awards” to inventors when a patent is granted, but that approach could be difficult to implement when the inventor(s) have left the company, and still would rely on equitable principles at least three Supreme Court justices are skeptical of, or contractual terms that may be viewed as contrary to public policy.

Courtenay C. Brinckerhoff

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• Insights & Research

Procedure For Patent Ownership Transfer In India

04-Sep-2023

A patent is an exclusive right awarded for an invention. An invention is a product or a technique that, in general, offers a new way of doing something or presents a new technical solution to a problem. A patent is like an investment for an inventor to use the invention solely or earn through licensing it.

In India, patent protection can be achieved by the following:

• Filling up and submitting a patent application to the patent office.
• Inspecting the application and conducting thorough search of all reports available by the patent office
• The application for the grant will be placed for grant once all patent conditions have been satisfied. The Patent Journal, which is released periodically, publishes notification of the grant of a patent.

A patentee has the choice to prevent others from producing, using, practising, or selling the invention without his permission after receiving a patent.

A patentee can transfer the ownership of the patent to another to use the invention by way of:

• By activity of law

Assignment is not defined in Indian Patents Act. The patentee transfers all or a part of his patent rights to the appointee who obtains the right to prevent others from creating, utilising, practising, or disseminating the invention. Section 50(3) of the Patents Act, 1970 states that in case a patent is co-owned by two or more individuals, any share of the patent cannot be assigned to anyone else without the consent of all co-owners.

Types of Assignment

There are three types of assignments.

• Legal assignment

 An assignment (or consent to appoint) under a valid patent is one in which the trustee may identify himself as the patent owner. A deed must be used to allot a patent that was created through one. All patent rights are granted to a duly appointed person who is qualified to be its owner.

• Equitable assignment

Any form or agreement including a letter in which the proprietor agrees to share a certain share of the patent with another individual is referred to as the equitable assignment of the patent. In any case, an appointee in such a situation is not eligible to have his name listed as the patent owner in the register. However, they can notify the register of their interest in the patent.

Mortgages are assignments in which the owner transfers all or a portion of their rights to the assignee in return for a fixed sum of money. The owner regains full ownership of the mortgaged property once the debt has been settled. The lender must have their name listed in the register as a mortgagee rather than registering themselves as the proprietor.

Requirements for Patent Assignment

• As mentioned before, patent assignment can only be considered a valid assignment if it has been drafted in writing and duly executed through the legal process.
• The written draft must define all the rights and obligations of both the parties with respect to the patent.
• The assignee shall apply in writing to the Controller of Patents to enter their name into the register of patents. Once the Controller of Patents is satisfied that the assignee has a genuine interest in the patent, they shall enter the details of assignment into their register.
• Form-16 must be duly filled and filed before the Controller General of Patents, Designs and Trademarks. It records the necessary details that must be mentioned for assignment, such as name of the applicant, details of all parties involved, description of the draft through which assignment is being sought.
• Two copies of the deed must be attached to the application as well.
• Fees for the process varies for different individuals and entities and is different when applied physically and through the Internet. A detailed breakdown of the official fees for the process is mentioned in the First Schedule of the Patent Act.

Amending Patent Assignment Agreement

The parties to the assignment may agree to change certain provisions of the agreement in the event of an infringement or mutual concession. The equitable assignment deed can primarily be used to process amendments to patent assignments. If the deed needs to be changed, it must be registered with the Controller of Patents before the assignment process is complete.

Termination of Patent Assignment Agreement

Since a deed is permanent and irrevocable, it cannot genuinely be terminated. A patent assignment pretty essentially constitutes a choice that cannot be undone. If it is a mortgage assignment deed, it can only be terminated.

Patent licensing is a process of granting permission to a third party to extract benefits by selling and using the licensed product. The patent owner gives license to a third party to use his patented invention based on the agreement and royalty. The license can be given for a period of time as per the mutual understanding between patent owner and licensee. During this time period, the licensee can use patented invention and can take financial benefits.

Licensing is a contract between two parties where licensor agrees the terms and conditions of patent owner. Since it is a contract or agreement, it must follow the Sections 10 and 11 of Indian Patent Act 1970. As per Section 68 of the Patent Act 1970, the agreement must be in writing.

Types of License

There are eight types of patent licencing as follows:

• Exclusive license

Exclusive licencing grants the licensee all rights, excluding the title to the innovation. Patent ownership is transferred from the patent owner to the licensee. Only the invention's title belongs to the patent holder. As a result, the licensee takes on all of the invention's obligations. The patent cannot, however, be licenced to another party by the licensee. It is given solely to him/her. As a result, the only individual with permission to exploit the patented invention is the licensee.

• Non-exclusive license

In Non Exclusive Licensing, the license of the patent can be granted to more than one party and all of them can commercialize the patent into the market. Thus, patent owner has rights to license his patented invention to more than one party.

• Sub license

Licensee has rights to issue Sub license to different organizations for making the product of patented invention. Patent owner give rights to licensee and the licensee has the right to issue the license further to a third party that can use patented invention. The financial benefits will depend on the contract between the primary licensee and third party.

• Cross-license

Cross-Licensing is the exchange of licenses between different organizations and creators. When invention requires the support of other products to make its place in the market, Cross-Licensing process is used.

• Voluntary licensing

Licencing on a voluntary basis is a gesture of goodwill towards the community. It also applies to patents for medicines. With voluntary licencing, the owner of a patent can grant the right to produce, import, or distribute a pharmaceutical product to other parties on an exclusive or non-exclusive basis. The licensee is allowed to sell and distribute the goods in a market, according the agreement. According to the terms and conditions outlined in the contract, the patent owner receives their royalty.

• Compulsory licensing

In Compulsory Licensing, the authorization is given to a third party to make, use or sell a patented invention without the consent of patent owner. According to the Sections 84 and 92 of Indian Patent Act 1970, if the specified conditions are satisfied, license can be granted to a third party without permission of patent owner. According to Section 84 of IPA 1970, any person who is interested or already the holder of the license under the patent can request to the Controller for grant of Compulsory License after three years from the date of grant of that patent. The patent office considers the nature of the invention, ability of the applicant to use the invention for the public interest, any measures already taken by the patentees or any licensee to make full use of the invention and time elapsed from grant of the patent. Compulsory Licensing is usually reserved for pharmaceutical patents. Government allows someone to practice patented invention to make, use or sell patented invention without taking permission of patent owner for the public benefits.

• Carrot licensing

This strategy is appropriate when the potential licensee is not using the patented innovation and is not obligated to obtain a licence. In this situation, the patent holder must persuade the party to use his product and explain how licencing it can be advantageous for them. In a marketing strategy known as carrot licencing, the owner of the patent tries to demonstrate to the licensee what may be accomplished by purchasing a licence for it.

• Stick licensing

Stick Licensing is another approach of licensing which is totally contrast of the carrot licensing. In Stick Licensing approach, prospective licensee is already using the patented technology and thus infringing the patent. The patent owner can file a suit against the infringer or settle with the infringer agreeing to license his patent.

• Difference between Assignment and Licenses

Transmission of Patent by Operation of law

When a patentee passes away, the patent's premium passes to his legal representative. If an organisation dissolves, goes out of business, or is liquidated, the patent is transferred by legal means.

A licence is the right granted to use the creation while keeping the exclusive rights with the patentee, whereas an assignment is the exchange of a variety of restriction rights by the patentee to the appointee. As a result, an appointee may transfer his privileges to third parties, whereas a licensee is not permitted to do so or to modify the title of his position.

An appointee is given all of the rights that the patent owner can enjoy, whereas a licensee is not permitted to do so. Additionally, an appointee has the right to file a lawsuit against the infringer while the licensee is not permitted to do so for the infringement of the patent in his name. The patentee can select the best strategy for commercialising his or her discovery after learning the difference between assignment and licence from the aforementioned information.

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The equitable/legal title conundrum and claiming priority in patent applications

The decision of Mr. Justice Birss in Accord Healthcare Limited –v- Research Corporation Technologies, Inc. [2017] EWHC 2711 (Ch) is destined to have businesses who deal with inventions derived from university professors scrambling to review their patent assignments. In it, he considers the impact of an assignment relating to an equitable right and one which deals with just a bare legal right.

The decision could well have serious ramifications for companies and universities alike in relation to the claiming of priorities, whether a patent is valid at all, and thus the flow of royalties derived from the patent.

Does this ‘accord’ with your understanding?

Interestingly, the case considered both US Federal law, the law of the State of Texas, as well as English law and the approach to equitable and beneficial title to property (in this case intellectual property), and the legal title.

The case concerned the University of Houston, Texas, and the Defendant’s (RCT) predecessor.  In 1966 they entered into an agreement (the ‘FAA Project’) in which Houston would first offer RCT any inventions in respect of this project (‘FAA’ means ‘Functionalised Amino Acid’). In the present case, the compound in issue was lacosamide which in 2018 was expected to achieve worldwide sales of €1 billion.  Although the basic patent had recently expired (earlier in 2017), a Supplementary Protection Certificate (which gives protection to the basic patented compound, i.e. lacosamide) was not due to expire until 2022, hence the reason why the Claimant (‘Accord’, a generic drug company) sought to challenge the base patent (because if that fell, so did the SPC).

The inventor, Professor Kohn, and his group had been working on various amino acid compounds since the 1980s and the discovery that lacosamide was a highly effective anti-convulsant only became apparent in the mid-1990’s.  A patent application in the US was filed on March 15th 1996: the international application being filed on March 17th 1997 (i.e. within the year, the two-day discrepancy being accounted for by the weekend).

Between those two dates, a student (Mr. Choi – part of Professor Kohn’s team), published his PhD thesis in which the activity of lacosamide as an anti-convulsant was disclosed.  It was accepted that if the priority date of the US filing could be attacked, so that the accepted date for filing the invention was the later international application, the Choi thesis would disclose the invention (as a prior public disclosure which would be novelty-destroying).

‘Your assignment, should you choose to accept it…’

The central point of the case concerned the relationship between Professor Kohn, the University of Houston and the procedure adopted under the 1966 FAA agreement in order for an invention to be vested in RCT.  It was a question of fact that Professor Kohn was not an employee of the university, nor was he ‘paid to invent’: if he had been the university would be the first owner of any invention. There was, however, a contractual obligation upon faculty members to assign any inventions to the university (or any person they appoint, such as RCT). 

Arising out of the 1966 FAA agreement, the university had the right (but not the obligation) to offer inventions to RCT.  That required the university to make a decision whether or not to offer the invention.  Equally, RCT was not obliged to accept it, even if offered. It was accepted that how offer and acceptance were communicated was irrelevant, only that these acts were necessary.

In the case of lacosamide, Professor Kohn applied for the US priority filing in 1996 and then, before the international application was filed, executed an assignment of the invention to RCT. The issue was: what had he assigned to RCT?

The case heard evidence from eminent judges on Texan and US Federal law. Ultimately, it boiled down to matters of fact, and how those were to be interpreted.  The Professor’s obligation to assign all inventions, meant that the university was entitled to the equitable and beneficial interest in lacosamide. What the Professor held was simply the bare legal interest.  This is what he assigned to RCT.  That was not sufficient for the purposes of claiming priority, since that could only be claimed by the holder of the equitable or beneficial interest.  The consequence of that, therefore, was that absent any other legal reason, the earlier US priority date would not stand, and so the Choi thesis would invalidate the patent. 

‘But wait a moment….!’

Although the judge appeared unhappy with this outcome, there was a further possible saving argument, known as the ‘bona fide purchaser’ argument. This is a common law concept which in the US has been codified in Statute. It worked as follows: notwithstanding Houston was entitled to the equitable and beneficial interest, if a bona fide purchaser without notice of Houston’s interest entered into an assignment with the assignor (i.e. Professor Kohn), then that bona fide purchaser achieves full title (Houston’s only remedy being damages against the Professor).

On the facts, the judge concluded RCT did not have notice of Houston’s equitable title.  Therefore, the assignment from Professor Kohn to RCT was for both legal and equitable title, and so RCT were able to claim priority.  Accordingly, the Choi thesis did not invalidate the patent.

Accord’s other attacks on the patent’s validity also failed and so the SPC stood.

This was a close call. The absence of any correspondence (or even witness recollection) about the proper workings of the relationship between Houston and RCT, on the one hand lost RCT the first ground, but worked the other way in terms of the bona fide purchaser without notice. Arising out of the ‘collaborative way’ that the Professor, the university and RCT all dealt with each other and kept each other informed, played into the judge’s hands.  On the one hand the judge could claim that Houston had not made any offer/received any acceptance (because there was nothing written or otherwise) and so not followed any procedure.  That enabled him to claim that the assignment from the Professor to RCT was what RCT would have expected to have received (and so not have notice of Houston’s interest).  It therefore ‘trumped’ the title Houston had.  Had the judge not dealt with it this way, even if Houston had subsequently assigned their equitable or beneficial title to RCT after the filing of the international application, and so ‘perfected’ the title, this would still be too late because the wrong person was claiming priority at the relevant time.

It is the case, perhaps even more so in the UK than in the US, that the arrangements between university professors, their academic institutions and industry is somewhat ‘loose’, to say the least.  In most cases, this will never matter and whatever inventions or patents that emanate from the professor/university will never be litigated. However, where something as successful as the lacosamide patent comes under the microscope, then no stone will be left unturned by those wishing to invalidate the patent.  If the priority date can be attacked, it is invariably the case that there is better prior art between the initial filing and the later international filing, which invalidates the patent. As with lacosamide, the sums at stake may make it well worthwhile litigating the point.  As can be seen in this instance, it very nearly worked. 

The message from this case is undoubtedly that industry should look more closely and carefully at the project they have in place with universities and their professors and particularly the procedures in place relating to assignments.  In that way, entitlement to priority arising out of who has claimed it should never be in doubt.

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Part II The Transfer of Intangible Property, 13 Equitable Assignment of Choses in Action

From: the law of assignment (3rd edition), marcus smith, nico leslie.

This chapter studies the requirements that are necessary for an effective assignment of choses in action. In order to effect the assignment or a chose in action: the assignor must have manifested an intention to transfer the chose; the thing being assigned must be a chose in action, in present existence, certain or capable of being ascertained; the identity of the assignee must be clear; and the appropriate forms and formalities must have been satisfied. These requirements apply both to legal and equitable assignments. However, since legal assignments can only be affected by statute, the forms and formalities required for a legal assignment are those set out in the relevant legislation, and addressed elsewhere.

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Equitable assignment

Practical law uk glossary 2-107-6540  (approx. 3 pages).

• The assignor can inform the assignee that he transfers a right or rights to him.
• The assignor can instruct the other party or parties to the agreement to discharge their obligation to the assignee instead of the assignor.
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Updated Patent Assignment Dataset

Published on: 04/25/2024 15:05 PM

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what is Patent Assignment Deed and its Advantages

It’s an agreement between Assignor and Assignee which explains the rights and conditions related to patent assigned property which means intellectual property of Assignor who is holding monopoly power towards that property. Under Indian law, its mandatory to register Patent Assignment Deed under Section 68 of the Patents Act, 1970 which giving Assignee absolute rights from date of execution of deed.

Kind of assignment deed:

• Legal assignment – in this Assignee may enter his name as patent owner.  
• Equitable assignment – in this certain share is given to another person. Equitable Assignee can’t enter his name as owner but can register as having interest in the patent.  
• Mortgage – in this patent right is partially or wholly transferred to obtain money. On repayment of money, mortgagor becomes entitle to register his name as owner.

Illustration:

A is the Assignor who got grant of patent for his invented product from Government of India willing to assign that to B’s company for loyalty in terms of share of 30% from every year earnings. And further it mentions the rights and duty of Assignor and Assignee under the legal agreement. This helps parties get relief in case of breach of contractual obligations.

Who is Assignor and Assignee?

Assignor is the person who is willing to transfer the title of patent and Assignee is the person who is willing to receive the title, interest and such other rights of patent from the Assignor by giving the required consideration.

What is the advantage of Patent Assignment Deed?

• It helps parties to understand their rights and duties with respect to the said Patent.  
• Since all the provisions are written and mutually agreed upon by the parties it minimizes ambiguity. More so in case of any dispute arising between the parties it shall be resolved according to the dispute redressal clauses mentioned in the Deed.  
• Formation of assignment deed gives legality and enforceability to the transfer of any Intellectual Property.  
• An Assignment Deed is a prima facie evidence of contractual relationship between Assignor and Assignee.

What are general rights and duties of Assignor and Assignee under this deed?

• Assignor need an absolute title against the patented goods for transferring such rights to Assignee.  
• Deed need to comply with all the essentials of contract in order to execute legally. If it violates public policy or does not have a lawful consideration, then such contract is void ab initio.  
• Assignor can transfer his intellectual rights fully or conditionally to Assignee for the consideration. Consideration could be of monetary value forming a large sum or shared percentage from income or stocks exchange of the concerned parties.  
• Assignee will get the monopoly right as Assignor assigns the patented goods. Henceforth, the Assignee steps into the shoes of the Assignor and by the virtue of the deed acquires an absolute right to use and enjoy the patented goods.  
• Assignee has the right to get indemnified against any intervention/inconvenience caused while he is exercising his rights.  
• Assignee can sue for damages caused to him by Assignor’s action, it maybe mistakes or voluntary negligence/disturbance or fraudulent activity in the deed.  
• Assignee is obligated to pay the consideration mentioned if he fails to do so within a stipulated period of time. Assignor can bring a legal action for the recovery of consideration but cannot terminate the title already transferred.  
• Assignee shall pay renewal and such other charges after the assignment. Prior to the assignment the Assignor needs to ensure that the title is free from any encumbrances.

Can the Assignment Deed be Terminated/Amended?

• This amendment mostly happens in equitable assignment deed. The deed must be registered before the Controller of Patent and in case of infringement or mutual consciousness the parties may mutually agree to amend any provision of the deed.  
• Termination of the deed is unlikely as it’s irrevocable and permanent in nature. As assignment being transfer of title in a patent which is permanent. It may be terminated in case of mortgage assignment deed.

Akshay is a Language Enthusiast & an HNLU alumnus. He believes in simplicity & takes legal literacy very close to his heart.

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January 21, 2023

Transfer of patent rights.

This article has been written by Ms. Samriddhi Vishen, a 2 nd year LL.B. student of Shri Jai Narain Misra PG College (KKC), Lucknow .

In India, an applicant is granted a patent for his/her invention by the Government of India. They are given in order to safeguard inventions and to promote more of them in the future. They help to ensure certain rights with regard to the invention to its owner, including, the right to forbid others from utilizing, creating, producing, and marketing the same product or service in the market, and being a form of property, it is transferable and the rights entrusted to the patent owner can be transferred to another. Thus, this article attempts to examine the provisions related to such a transfer and related laws. 

Reasons for transfer

Patent Rights may be transferred for a number of reasons: the patent holder may no longer be involved in a particular field of technology, wish to recoup some of its R&D expenditure through patent sales, exchange patents or patent portfolios with other entities, be insolvent or facing bankruptcy, which would require it to sell assets, or there can be other purposes. Buyers may purchase patents for a variety of reasons, such as financial gain from owning patents, defensive purposes or the need to ensure access to the patented technology, among others. 

Mode of Transfer of Patent Rights  

The following are the ways in which a patent is transferable: 

• By Act of Parties: Assignment and License
• By operation of law 

It is to be noted that only the patent’s owner is authorized to grant Licenses or assign patents. When there are jointowners or co-owners, one of the owners cannot assign or License the patent without permission of the other(s). 

1. By Act of Parties: 

• Assignment- The Indian Patents Act does not define the word “assignment.” A patent owner may transfer all or a portion of his patent rights to an assignee, who then receives the exclusive right to bar anyone from creating, utilizing, exercising, or commercializing the invention. 

Registration of assignments- A person may submit an application in writing in Form 16 to the Controller General of Patents, Designs, and Trademarks (CGPDTM) for the registration of his title if they acquire a patent, a stake in a patent, or an entitlement as a mortgagee through an assignment. The CGPDTM must record the details of the trademark assignment in the register upon receipt of proof of title or to his satisfaction when such an application is submitted.

The following documents are needed in India for registration of a patent assignment:

• Application for recording of patent assignment in Form-16 
• Two copies of Assignment Deed along with the application
• Documents evidencing assignment of a patent or affecting the proprietorship 

Types of Patent Assignment- Assignments can be classified as either legal, equitable, or mortgage-related. 

Legal Assignment: Where the assignee may enter his name as the patent owner, an agreement to assign or an assignment of an existing patent is a legal assignment. Only through a deed can a patent be assigned if it was established by deed. All rights to a patent are acquired by a legal assignee who is qualified to act as its proprietor thereof. 

Equitable Assignment: An equitable assignment of the patent is any agreement, including a letter, in which the patentee consents to transfer a specific, identified portion of the patent to another party. However, in this situation, an assignee cannot have his name included as the patent owner. However, the assignee may request his interest in the patent to be entered in the register. 

Mortgage: A mortgage is an agreement that transfers all or a portion of the patent rights to the assignee in exchange for cash. The patent rights are returned to the assignor/patentee after the assignor pays the assigned amount. The person in whose favour a mortgage is granted does not have the right to be listed in the register as the proprietor; however, he may have his name listed there as the mortgagee.

• License: A patentee may grant a License by virtue of an agreement in accordance with section 70 of the Patents Act. Patent licencing must adhere to the clauses mentioned in Section 84-92 of the Act. A licensee (license holder) may be allowed to create, use, or exercise an invention by a patentee through the issuance of a License. A License is a written contract between the licensee and the licensor (owner of patent granting license) that details the terms agreed upon, including the payment of royalties at a specified rate for all products made under the patent. Some of the clauses under a patent licensing agreement include Identification of the Parties, recital clause, license clause, definition clause, payment clause, termination clause etc. 

Steps to File a Patent License:

1. Locate Manufacturers- To find out possible licensees.

2. Sign a Confidentiality Agreement- To safeguard your rights to your intellectual property, request that potential licensees sign a confidentiality agreement.

3. Negotiation- Negotiate the terms and conditions of the patent License with the licensee. This step involves discussion on a number of terms and conditions like- 

• the scope of the License, such as the nation or region to which the License extends; 
• the royalties, which can be paid as a percentage or fee, fixed or variable; 
• the duration of the License, including any terms for renewal or early termination; 
• and any restrictions, such as a minimum annual royalty or a minimum number of products sold.
• standards for product or quality control, compliance with legislation, any charges in addition to royalties (for instance, signing fees), the ability of the licensee to sublicense the rights, etc. are some other factors that may be taken into account.

4. Complete a Patent License Agreement- An official contract known as a patent license agreement gives the licensee certain rights to make use of or sell your patented invention. The license’s terms and conditions are described there. This document needs to be signed by both the licensor(s) and the licensee(s).

Types of Patent License: The following are the types of Licenses: 

Voluntary License: It is the license granted to anyone else to create, use, and market the patented product in accordance with the agreed terms in writing. The Controller and the Central government have no role to play because it is voluntary. The terms and conditions of such agreement are mutually agreed upon by the licensor and licensee. In case of any disagreement, the licensor can cancel the licensing agreement.

Statutory License: In the public interest, the central government may grant statutory licenses to allow a third party to produce or use a patented good without the patent holder’s consent. Compulsory licenses are a well-known example of such statutory licenses. The general definition of a compulsory license is “authorizations permitting a third party to make, use, or sell a patented invention without the patent owner’s consent.”

Exclusive License and Limited License: 

A license can be either an Exclusive License or a Limited License, depending on the extent and degree of the rights granted to the licensee. All other parties, including the patent holder, are prohibited from using the invention under an exclusive license. From the collection of rights held by the patentee, any one or more rights pertaining to the patented invention may be granted. The rights may be shared and transferred, completely or partially restricted. In a limited license, the restrictions may arise as to the people, the time, the place, the manufacture, the usage, or the sale.

Express License and Implied License: A License that expressly grants rights to use the patent is known as an express License. Such a License cannot be deemed valid unless the terms and conditions are set down in writing. In the event of an implicit License, even though the consent is not given explicitly, it is clear from the context. For instance, there is an implicit License to use and resale a patented article when a person purchases it directly from the patentee or his licensees, whether they are located domestically or abroad.

2. By Operation of law: When a patentee’s interest in the patent transfers to his or her legal representative upon death; in the event of a company’s dissolution, winding up, or bankruptcy, transfer of patent rights by operation of law occurs. 

Essentials of a Valid Assignment and License 

• The Patent Assignment and License must be reduced to writing in a document that outlines all the criteria that govern the parties’ rights and obligations.
• The written agreement must be duly registered with the Controller General of Patents, Designs, and Trademarks 

(CGPDTM) in accordance with the provisions of the Indian Patent Act, 1970.

Case Laws  

• PVR Pictures Ltd. v. Studio 18- The Delhi High Court ruled in the case of PVR Pictures Ltd. v. Studio 18 [2009 SCC OnLine Del 1878: (2009) 41 PTC 70] that a term sheet agreement does not constitute a license agreement.
• National Research Development Corpn. Vs ABS Plastics Limited- In the aforementioned case, the Honorable Delhi High Court ruled that granting a License or assigning a patent right to a third party is only valid if it is done in writing between the parties involved and is documented and submitted in the appropriate manner with the Controller of Patents. The court here held that the license was invalid and hence unenforceable because it was not registered at the patent office.
• Bayer Corporation vs Union Of India- The key issue in this case was whether Bayer should have granted Natco a voluntary and compulsory License together with the implementation of the bolar provisions in regard to the patent linkages in the Indian context. According to the court, Natco had met every condition outlined in Section 84(1) clauses (a), (b), and (c) of the Act, and as a result, the Controller General of Patents had every authority to give Natco a compulsory License.

The Court found out that the application filed by Natco outlining the areas in which the petitioner fell short was accurate. The court found that Bayer, the patent holder, had failed to demonstrate that the medicine in question is not worked in the territory of India and it failed to satisfy the reasonable requirement test for public use of the drug. The court further stated that Section 83(f) of the Act was intended to prevent patent holders from abusing their rights in connection with foreign trade.

Conclusion 

Thus, it is crucial to make sure that all conditions are satisfied when preparing, executing and recording the transfer of Patent Rights in India. When failing to do so, it could result in the loss of rights and potential exposure to liability.

References: 

Transfer of the Patent Rights

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Fintech and artificial intelligence: Intellectual Property Implications in India

This Article has been written by Ms. Khushboo Sharma, a 5th year Law-student of Vivekananda Institute of Professional Studies, Delhi.…

Regulatory compliance and IPR: Fintech’s Legal landscape in India

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