I was having a discussion the other day with an inventor about patents. That’s not really abnormal considering patents are a big part of our industry. However this conversation was specifically about assigning patent rights to a company when you license your product idea to them.
Patent Assignment: The sale and/or transfer of ownership of a patent by the assignor (Inventor or co-inventor) to the assignee.
This is the only legally recognized way by the USPTO of transferring ownership of a patent. Not a handshake, or a contract, or even a deathbed gift will be recognized as a valid form of patent transfer by the USPTO.
Just to be clear – from a business perspective it is NEVER a good idea to assign a patent to a company in the course of a licensing deal. There is simply no need. The license contract itself serves as a pseudo assignment in the terms it grants the company for use of the intellectual property. Most importantly it does it in a way that is 100% reversible if the time comes that you and the company part ways.
As we were talking I started to think about how sites like Quirky (who have never been very interested in telling inventors about the damage to Patent rights using their site causes) handle patents on products they chose to commercialize.
I found the answer in their terms and conditions statement…..and I guess it tells the story.
“In connection with any Accepted Product Idea, to the extent that you submit User Content in connection with that Accepted Product Idea and your User Content is incorporated or made part of any commercialized version of that Product Idea, you hereby assign to Company, and agree to deliver such additional assignments or other instruments of transfer or Intellectual Property Rights perfection as may be reasonably requested by the Company, all of your right, title and interest in such User Content, including without limitation all Intellectual Property Rights. You further agree that you will not make any claims against the Company or any third party who is assigned or licensed rights in such User Content by the Company, based on any allegations that any activities by the Company or such third party infringe your (or anyone else's) Intellectual Property Rights in such User Content. You further acknowledge and agree that in connection with any such assignment you reserve no rights whatsoever and the Company shall have the right to enforce all Intellectual Property Rights in such User Content against you and any subsequent use by you of such User Content.”
Like I said, it’s never a good idea to assign your patent to anyone in a licensing deal. It is an irreversible action that gives 100% rights to the company and leaves you.... out in the cold.
I'm afraid I have to disagree. If the price is right, selling your patent through assignment makes a huge amount of sense. Some of my most successful clients have fully sold their patents to licensees and then went on to make other inventions.
ReplyDeleteI agree with you Mark – Selling IP is often the best road for an inventor. However, that’s not what they are doing. They are making you assign it as a function of their contract for acceptance. This is normally handled using a contract vehicle that has terms and an allowance for expiration. As you know an assignment does not. It’s on or off. Since a license is basically a rental agreement there is no need to change ownership.
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