patent confirmatory assignment

• Ten Questions about Confirmatory Assignments

1. Depending upon the applicable IP rights and related law of contract of the jurisdiction, to what extent can an unwritten agreement validly assign IP rights? 2. Assuming that an unwritten assigment is valid, what is the evidentiary showing that is required? 3. Can one record an unwritten assignment on, e.g., the appropriate patent or trade mark registry? If so, what proof is required? 4. Is the evidentiary showing different in connection with establishing the validity of the assignment in the context of a transaction? 5. How can a purchaser receive sufficient comfort about the validity of the assignment, or is it a matter of risk allocation depending upon the positon of the parties? 6. Does the standard of evidence to establish an unwritten assignment differ once again in the context of a court proceeding? 7. Does the standard of evidence to establish an unwritten assignment differ yet again iin the context of taxation? 8. Is a confirmatory assignment a form of ratification? 9. If it not a form of ratification, what is the proper legal characterization for the agreement? 10. In light of all of the foregoing, does the confirmatory assignment confer any benefit to the parties, other evidentiary or substantive?

13 comments:

Confirmatory assignments are frequently used where a written assignment already exists, but the parties do not want to disclose that document because it contains sensitive information (e.g. payments, etc.). In addition, they are often used to confirm an 'automatic' assignment (e.g. from an employee to his/her employer). The latter may be useful, for example, when submitting a US application with UK inventors.

In the United States, this is a statutory question: "Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing." 35 USC Section 261. Your questions are far more interesting as applied to licenses or servitudes more generally. Based on hundreds of years of common law, one would imagine that all personal property, including patents, would require encumbrances to be publicly recorded for them to be enforceable on subsequent purchasers for value without actual notice. In fact, equitable servitudes on personal property were not enforceable at all at common law. As far as I can tell, patents present a unique exception to this history. For that reason I have wondered whether it is fair even to call patents property -- despite their being deemed so by statute. On my view, this is the most underappreciated obstacle to the emergence of a healthy market for patents. Lemley and Myhrvold suggested years ago a solution to the problem -- namely, of requiring the public disclosure of all assignments and licenses. That seems to have gone nowhere thanks to an incomplete understanding by current stakeholders of how such a transition would result in an entirely new market equilibrium, or at least to the general desire for incremental rather than radical changes to the status quo.

Confirmatory assignments are commonly used to record assignments in writing where the commercial terms of an assignment are to remain confidential. I cannot think of many instances where I would be happy to rely on a written confirmation of an unwritten assignment. It is my understanding that in most common law countries an assignment must be in writing for it to be legally effective, otherwise at best your unwritten assignment may only transfer an equitable interest in the relevant IP. A type of assignment document I have occasionally seen and used is the assignment that is both operative and confirmatory. In other words, "I confirm that I assigned, but if that assignment wasn't legally effective for any reason then I hereby assign". It isn't ideal, but sometimes it's the only way to fix a break in the chain of title when you really don’t think you can rely on that unwritten assignment.

3. Can one record an unwritten assignment on, e.g., the appropriate patent or trade mark registry? If so, what proof is required? Yes, that is possible in certain jurisdictions. At the most you would need a date of assignment and particulars of the assignee and the assignor. The relevant forms necessary to record the assignment are prepared by the agents and signed on behalf of the assignee. Example, Singapore

Rob hit the nail on the head. They are used to simplify matters in circumstances where the parties may have been better to have signed short-form agreemnts. A party will often not want to disclose a document with all of the juicy commercial terms, so a confirmatory assignment may be used. A final (arguably erroneous) use may be where a party has, to settle a matter, assigned a CTM under cover of a letter or unilateral agreement signed only by the owner. In the case of a CTM, the assignment has to be signed by both parties to be valid. Therefore, whilst the mark may be assigned in the head of the previous owner, something more needs to be done to validly assign. Arguably the follow-up is not confirmatory in those circumstances, but I've seen the document that followed described as confirmatory.

Associated with the issue of confirmatory assignments is the issue of assignment documents with a purported "effective date" earlier than the date of execution of the document. In jurisdictions where rights in an application can only be assigned in writing, the writing requirement was then not fulfilled as at the "effective date". This may be particularly important in relation to priority claims.

I have seen such Confirmatory Assignments used as evidence supporting a transfer request before the EPO, but it wasn't my job to question them even though the whole procedure looked quite fishy to me. Once upon a time there was a nice little company A which got gobbled by company B. One year later, company B was in turn purchased lock, stock and barrel by company C. A, B and C were in three different countries. A's European representative kept prosecuting the EP cases, but only bothered to file a transfer request when a given application was just about to mature into a grant, providing in most cases a confirmatory assignment drafted by an US notary public as evidence. The document stated that A's IP was transferred to three entities Ca, Cb and Cc, which are all presumably 100% subsidiaries of C. I infer that the applications are jointly owned by all three companies. The assignment is signed by Ca, Cb and Cc's officers as well as the notary. The document couldn't have been signed by A's officers, since A did not exist anymore at that point. There is no mention whatsoever of company B either , so the document did not describe what actually happened, since A could never have dealt directly with C. The representative's cover letter only requests transfer to company Ca, leaving Cb and Cc out of the picture, and Ca is the only name entered in the EPO's register. I googled up a bit and I found out that B wrote in its ultimate annual that it now owned all of B's IP, and C later stated in its own annual report that B's IP was now located in yet another subsidiary Cd, different from Ca, Cb or Cc. In one case the Umschreibestelle questioned the confirmatory assignment in that in only bore the signature of one of the parties. The representative adamantly replied that the assignment should be taken at face value and that's it. The EPO did not insist, and took down the transfer - in Ca's name only. In one of the applications this examiner was bone-headed enough to be minded to consider a refusal, prompting the representative to file a "divisional" application in order to keep the show going. The weird thing was that the "divisional" was in A's name, even though it no longer existed for years. The new application was eventually abandoned, so all the interesting questions which arose did not need to be answered. From the preceding, I think I'd start kicking and yelling about who actually owns a patent (and thus entitled to initiate action) if I were ever dragged before court in an infringement action where a confirmatory assignment was involved. The standard for proving a transfer of rights appears to be much lower as to the right to transfer of an opposition. A confirmatory assignment may appear a practical shortcut, but it could be a false saving. As to the argument that a confirmatory assignment can keep details secret, I don't think they're worth the risk either. I've seen IP sale contracts accepted as evidence for a transfer before the EPO where more black ink was poured to obscure passages than the CIA ever used when declassifying a document. BTW, one of these contracts involved yet another of C's subsidiries transferring its IP to numbered entities conveniently located in tax flexible territories.

Thanks for all of your great comments. In one off-site communication on the topic yesterday, I suggested that confirmatory assignments are among the "dirty little secrets" of IP practice. She wrote back that in fact they are the "dity little not-so-secrets" of IP. I suspect that we are both right.

Something that does not appear to be widely appreciated is that the box for the date of agreement on EPO Form 1002 is provided for the convenience of the applicant only, there being no requirement in the EPC to provide a date. I have often filed forms with no date where the information was not available, and no objection has ever been raised. I have only seen this explicitly stated in the answer to question 80 in Dr. Günter Gall's classic book for EQE candidates "European & International patent applications: questions and answers" [ISBN 0-85121-555-6; 1989 edition]. Dr Günter Gall was a Director of the EPO and evidently wrote with authority. I have had more knowledgeable inventors query the appropriateness of signing any sort of assignment of rights that he doesn't own because the invention belongs to the employer by virtue of UK law, and have then had to explain the USA [for example] doesn't recognise this aspect of UK law. Such assignments made in respect of a first filing are certainly useful when subsequently filing in the USA if the inventor is no longer contactable or become uncooperative, eg due to imminent redundancy.

Anonymous' knowledgeable inventors have a point, and this has always been my rationale for obtaining confirmatory assignments. It must surely be a fundamental principle that one cannot assign what one does not own, so a written assignment from an employee to an employer that already owns the invention by terms of a contract of employment must surely be void. The problem is not solved by writing the employment contract in such a way as to place the employee under an obligation to assign, because a subsequent assignment to another party, while being a breach of contract, will not necessarily enable the invention to be reclaimed by the employer (see, eg Stanford v Roche 583 F.3d 832 (Fed. Cir. 2009). As I understand it, the US law relating to employee inventions is basically the common law. The issue is not that the USPTO will not recognise that the employer owns the invention, rather it is the specific requirement that the inventor assign the rights reflected in the particular patent application, ie that a suitable assignment cannot be completed until the inventor has the actual filed specification and claims before her. A general assignment of the invention, and all notional future rights, will not suffice for this purpose. However, an assignment of a PCT application designating the US is fine (although it may take a little effort to persuade the USPTO to accept a document that is not in its standard form). An unavailable or uncooperative inventor remains problematic even if you have a suitable assignment document, because the USPTO cannot accept the filed application until it has an inventor's declaration, or a petition has been granted to allow the application to be accepted without the signed declaration. Though not a US attorney, for my sins I have found myself with clients in this situation, and it can be a lot of work to resolve.

"This and the related topic of failure to agree or document assignment of IPRs arise all too frequently. I have been faced with the challenge of "I paid, so I own" throughout my career. Here are 10 thoughts on this topic: 1. No one should believe that the law will come to their rescue if they do not document a written assignment and have it signed by the assignor and the assignee. 2. Assignments of IPRs are a perfect example of lack of global harmonisation. There is huge discrepancy between national laws as to what formalities are required - few require more than a written assignment signed by both parties. 3. The greatest density of disputes is between consultants and the corporations who hire them. The expectation is that IPRs in the "work product" automatically transfer. Big mistake. 4. English law enjoys equity, and can be persuaded to find an intention to assign (aka an equitable assignment). Hoping for this result is a lottery. In other parts of Europe, the odds are worse. 5. The position is not as random within an employee/employer relationship, because generally the first owner is the employer. However, at the edges ("course of employment") it is well worth documenting the position. In this context, do not assume that ownership is the end of the matter. Always think about attribution issues (such as moral rights) and economic reward (for exceptional contribution). 6. Failure to document the IPR position is statistically likely to create a significant commercial issue downstream. I have personally seen IPOs delayed, joint ventures stall and tens of disputes that frustrate and delay commercial exploitation. 7. The consolation prize in an ownership dispute is typically a licence. Within this one word, is a world of pain as the parties debate scope (field of use), term (for a project to perpetual), ambit (exclusive to non-exclusive), not to mention royalty. So whilst ownership is undoubtedly first place, bottom of the class will not get much at all. 8. Banks and investors still struggle to understand and value IPRs in the same way as tangible assets such as property and stock, so they scare easily. If chain of title and ownership is not clear, expect them to have significant concerns in all other areas such as validity and infringement. 9. Joint ownership looks like a good compromise. Normally it isn't. There is no global uniformity on the rights conferred on joint owners - and even within a jurisdiction it's different between the various IPRs. 10. Which means that I'm normally just so relieved to receive a confirmatory assignment, that I seldom have the energy to think about Neil's 10 questions - but now I will!"

Many interesting comments on assignments. Here is a further related issue, perhaps basic compared to a confirmatory assignment under the original fact pattern. Assume the inventor has executed an assignment to her employer for a US provisional patent application that includes assignment of all later applications, using standard language regarding assigning international applications, US, non-US applications. The assignment properly assigns the right to claim priority. Then a PCT application is timely filed that claims priority to this provisional. The PCT application includes new disclosure in the specification, including new examples, and new claims. Is a second assignment needed or does the assignment of the provisional suffice? For all jurisdictions? If a new assignment is needed, how is it worded to avoid the issue of 're-assigning' what has already been assigned in the provisional assignment? Seems one can only assign rights one has not already assigned away.

In answer to the last comment, yes, a new assignment is needed. An assignment has to relate to an invention, and if that invention is new, it cannot have been previously assigned. Equitably, yes, but then we argue over whether the new invention is actually covered.

All comments must be moderated by a member of the IPKat team before they appear on the blog. Comments will not be allowed if the contravene the IPKat policy that readers' comments should not be obscene or defamatory; they should not consist of ad hominem attacks on members of the blog team or other comment-posters and they should make a constructive contribution to the discussion of the post on which they purport to comment. It is also the IPKat policy that comments should not be made completely anonymously, and users should use a consistent name or pseudonym (which should not itself be defamatory or obscene, or that of another real person), either in the "identity" field, or at the beginning of the comment. Current practice is to, however, allow a limited number of comments that contravene this policy, provided that the comment has a high degree of relevance and the comment chain does not become too difficult to follow. Learn more here: http://ipkitten.blogspot.com/p/want-to-complain.html

The IPKat: Intellectual Property News and Fun for Everyone!

How many page-views has the IPKat received?

Not just any old ipkat ....

Get the Kat in your Inbox!

The kat that tweets current followers: 22.9k.

Follow the IPKat on LinkedIn

Follow the IPKat on Facebook

Follow the ipkat on reddit.

The IPKat's most-read posts in the past 30 days

Search This Blog

Blog Archive

• ►  September 2024 (7)
• ►  August 2024 (32)
• ►  July 2024 (41)
• ►  June 2024 (39)
• ►  May 2024 (35)
• ►  April 2024 (40)
• ►  March 2024 (38)
• ►  February 2024 (37)
• ►  January 2024 (40)
• ►  December 2023 (48)
• ►  November 2023 (40)
• ►  October 2023 (39)
• ►  September 2023 (39)
• ►  August 2023 (36)
• ►  July 2023 (37)
• ►  June 2023 (40)
• ►  May 2023 (46)
• ►  April 2023 (44)
• ►  March 2023 (34)
• ►  February 2023 (39)
• ►  January 2023 (36)
• ►  December 2022 (30)
• ►  November 2022 (35)
• ►  October 2022 (35)
• ►  September 2022 (34)
• ►  August 2022 (24)
• ►  July 2022 (21)
• ►  June 2022 (24)
• ►  May 2022 (24)
• ►  April 2022 (26)
• ►  March 2022 (26)
• ►  February 2022 (39)
• ►  January 2022 (42)
• ►  December 2021 (40)
• ►  November 2021 (40)
• ►  October 2021 (34)
• ►  September 2021 (37)
• ►  August 2021 (36)
• ►  July 2021 (39)
• ►  June 2021 (25)
• ►  May 2021 (40)
• ►  April 2021 (35)
• ►  March 2021 (36)
• ►  February 2021 (28)
• ►  January 2021 (41)
• ►  December 2020 (47)
• ►  November 2020 (37)
• ►  October 2020 (40)
• ►  September 2020 (42)
• ►  August 2020 (44)
• ►  July 2020 (56)
• ►  June 2020 (48)
• ►  May 2020 (50)
• ►  April 2020 (52)
• ►  March 2020 (58)
• ►  February 2020 (54)
• ►  January 2020 (62)
• ►  December 2019 (45)
• ►  November 2019 (60)
• ►  October 2019 (66)
• ►  September 2019 (58)
• ►  August 2019 (54)
• ►  July 2019 (60)
• ►  June 2019 (60)
• ►  May 2019 (66)
• ►  April 2019 (74)
• ►  March 2019 (67)
• ►  February 2019 (69)
• ►  January 2019 (68)
• ►  December 2018 (50)
• ►  November 2018 (42)
• ►  October 2018 (47)
• ►  September 2018 (31)
• ►  August 2018 (29)
• ►  July 2018 (28)
• ►  June 2018 (37)
• ►  May 2018 (44)
• ►  April 2018 (44)
• ►  March 2018 (60)
• ►  February 2018 (58)
• ►  January 2018 (54)
• ►  December 2017 (44)
• ►  November 2017 (61)
• ►  October 2017 (68)
• ►  September 2017 (38)
• ►  August 2017 (30)
• ►  July 2017 (57)
• ►  June 2017 (62)
• ►  May 2017 (57)
• ►  April 2017 (53)
• ►  March 2017 (53)
• ►  February 2017 (41)
• ►  January 2017 (35)
• ►  December 2016 (55)
• ►  November 2016 (45)
• ►  October 2016 (44)
• ►  September 2016 (61)
• ►  August 2016 (33)
• ►  July 2016 (38)
• ►  June 2016 (47)
• ►  May 2016 (62)
• ►  April 2016 (62)
• ►  March 2016 (63)
• ►  February 2016 (41)
• ►  January 2016 (47)
• ►  December 2015 (57)
• ►  November 2015 (76)
• ►  October 2015 (71)
• ►  September 2015 (60)
• ►  August 2015 (69)
• ►  July 2015 (74)
• ►  June 2015 (72)
• ►  May 2015 (67)
• ►  April 2015 (65)
• ►  March 2015 (93)
• ►  February 2015 (73)
• ►  January 2015 (87)
• ►  December 2014 (89)
• ►  November 2014 (58)
• ►  October 2014 (73)
• ►  September 2014 (78)
• ►  August 2014 (68)
• ►  July 2014 (73)
• ►  June 2014 (76)
• ►  May 2014 (72)
• ►  April 2014 (69)
• ►  March 2014 (67)
• ►  February 2014 (78)
• ►  January 2014 (78)
• ►  December 2013 (64)
• ►  November 2013 (78)
• ►  October 2013 (72)
• ►  September 2013 (54)
• ►  August 2013 (57)
• ►  July 2013 (72)
• ►  June 2013 (56)
• ►  May 2013 (63)
• ►  April 2013 (73)
• ►  March 2013 (62)
• ►  February 2013 (55)
• ►  January 2013 (62)
• ►  December 2012 (48)
• ►  November 2012 (77)
• ►  October 2012 (69)
• ►  September 2012 (65)
• ►  August 2012 (56)
• ►  July 2012 (70)
• ►  June 2012 (68)
• ►  May 2012 (61)
• ►  April 2012 (70)
• ►  March 2012 (78)
• ►  February 2012 (81)
• ►  January 2012 (81)
• ►  December 2011 (66)
• ►  November 2011 (69)
• ►  October 2011 (62)
• ►  September 2011 (43)
• ►  August 2011 (61)
• ►  July 2011 (68)
• ►  June 2011 (61)
• ►  May 2011 (63)
• ►  April 2011 (68)
• ►  March 2011 (76)
• ►  February 2011 (66)
• ►  January 2011 (64)
• ►  December 2010 (74)
• ►  November 2010 (60)
• ►  October 2010 (67)
• ►  September 2010 (60)
• ►  August 2010 (64)
• Invisible goods
• Breaking news: Vodkat appeal dismissed
• Friday fantasies
• Inbev loses Budweiser CTM appeal
• Schlumberger v EMGS: A Non-Obvious Marriage of Skills
• A press-ing problem
• Wednesday whimsies
• A blueprint to nurture the creatives: it takes Bra...
• The definite Article?
• If you think software patents are a pain, try soft...
• Do poor people like different patents to rich people?
• Monday miscellany
• Letter from AmeriKat - Hot News - too hot to handle?
• Intellectual property standards: how do YOU behave?
• The bare facts and the Naked truth
• EPO: hearings in "broccoli and tomato cases"
• Never mind the golden rabbits, what about the Gold...
• New German court to try chocolate rabbit disputes
• This bunny (litigation) never dies
• Letter from AmeriKat II: Bilski, Baby (Justice St...
• Letter from AmeriKat I: Bilski, Baby! (Justice St...
• EPO: English version of notice concerning communic...
• Some culinary IP news....
• Another referral to the EBO: Allowability of discl...
• All threats, no action ...
• New referral to the EBO: until when can a correcti...
• The Branding Summer of our Content and Discontent
• Azzurri take aim at "creaking" patent system
• DSS' patent out of the money in Germany, too
• Added matter, intermediate generalisation and a go...
• Becker match goes to a fifth set
• Two outstanding competitions: a Kat apologises
• England's new shirt sponsors?
• When a School Boy's Trick Meets Strangers in a Tra...
• Portakabin ruling: a bad result for trade mark own...
• An IP system for the 21st Century: Gurry speaks
• Odd Couple challenge Digital Economy Act
• "You say vuvuzela, I say lepatata ..."
• Cracking Ideas and a day to remember
• Importing non-UK decoders into the EU: a multiplic...
• Monsanto: court makes a meal of soya ruling
• A PET aversion? Biorenewable monomers take centre ...
• EPO implicated in Golden Balls dispute
• Letter from AmeriKat II: Bilski, Baby! (Justice Ke...
• Letter from AmeriKat I: Bilski, Baby! (Justice Ke...
• Is rebranding the key to reversing BlackBerry's fo...
• Old woman rebranded in wonder makeover
• The EQE "Pre-Exam" - Who Needs It?
• Heartache for heartburn drugmaker, though court sw...
• A map, a copyright dispute and the Bundesverfassun...
• ►  June 2010 (57)
• ►  May 2010 (61)
• ►  April 2010 (75)
• ►  March 2010 (63)
• ►  February 2010 (50)
• ►  January 2010 (54)
• ►  December 2009 (50)
• ►  November 2009 (70)
• ►  October 2009 (58)
• ►  September 2009 (49)
• ►  August 2009 (55)
• ►  July 2009 (59)
• ►  June 2009 (57)
• ►  May 2009 (40)
• ►  April 2009 (51)
• ►  March 2009 (61)
• ►  February 2009 (56)
• ►  January 2009 (60)
• ►  December 2008 (53)
• ►  November 2008 (66)
• ►  October 2008 (60)
• ►  September 2008 (52)
• ►  August 2008 (56)
• ►  July 2008 (60)
• ►  June 2008 (74)
• ►  May 2008 (78)
• ►  April 2008 (72)
• ►  March 2008 (70)
• ►  February 2008 (59)
• ►  January 2008 (75)
• ►  December 2007 (55)
• ►  November 2007 (71)
• ►  October 2007 (64)
• ►  September 2007 (54)
• ►  August 2007 (51)
• ►  July 2007 (77)
• ►  June 2007 (75)
• ►  May 2007 (76)
• ►  April 2007 (62)
• ►  March 2007 (92)
• ►  February 2007 (84)
• ►  January 2007 (83)
• ►  December 2006 (59)
• ►  November 2006 (74)
• ►  October 2006 (57)
• ►  September 2006 (52)
• ►  August 2006 (53)
• ►  July 2006 (61)
• ►  June 2006 (60)
• ►  May 2006 (66)
• ►  April 2006 (64)
• ►  March 2006 (83)
• ►  February 2006 (59)
• ►  January 2006 (78)
• ►  December 2005 (65)
• ►  November 2005 (68)
• ►  October 2005 (56)
• ►  September 2005 (68)
• ►  August 2005 (70)
• ►  July 2005 (74)
• ►  June 2005 (90)
• ►  May 2005 (79)
• ►  April 2005 (84)
• ►  March 2005 (63)
• ►  February 2005 (70)
• ►  January 2005 (83)
• ►  December 2004 (81)
• ►  November 2004 (95)
• ►  October 2004 (81)
• ►  September 2004 (66)
• ►  August 2004 (43)
• ►  July 2004 (63)
• ►  June 2004 (49)
• ►  May 2004 (49)
• ►  April 2004 (46)
• ►  March 2004 (61)
• ►  February 2004 (40)
• ►  January 2004 (59)
• ►  December 2003 (57)
• ►  November 2003 (62)
• ►  October 2003 (52)
• ►  September 2003 (58)
• ►  August 2003 (73)
• ►  July 2003 (40)

Creative Commons Attribution-Non Commercial Licence

Subscribe to the ipkat's posts by email here, feed me ipkat.

Has the Kat got your tongue?

The ipkat's cousins: some ip-friendly blogs for you, out for the count....

Considerations for Patent Assignments After Minerva Ruling

• Post author By Austen Zuege

By Austen Zuege & Benjamin Edlavitch

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

Introduction

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

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

The Minerva Decision

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

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

Practical Considerations and Possible Assignment Clauses

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

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

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

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

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

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

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

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

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

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

Enforceability Considerations

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

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

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

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

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

[i] U.S. No. 20–440 (June 29, 2021). 

[ii] Id. Slip Op. at 1.

[iii] Id. at 2-3.

[iv] Id. at 3.

[v] Id. at 3-4.

[vi] Id. at 16.

[viii] Id. at 15.

[x] Id. at 15-16.

[xi] Id. at 16-17.

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

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

[xv] Minerva , Slip Op. at 14,n.4.   

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

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

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

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

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

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

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

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

• Tags Assignments , Assignor Estoppel , Patents

• About IPWatchdog
• IPWatchdog Team
• Article Submission
• Contributors

Practical Considerations for Patent Assignments After the Supreme Court’s Decision in Minerva Surgical v. Hologic

“Because the focus remains on ensuring fairness and consistency, when patent ownership is derived from an assignment from the inventor, inventors and companies alike should not consider patent assignments to be routine documents without possible negative implications.”

What SCOTUS Said

As a refresher, the case centered around two patents invented by Csaba Truckai related to procedures and devices to treat abnormal uterine bleeding. In 2004, Truckai assigned his interest in a patent application which claimed a moisture permeable applicator head to destroy cells in the uterine lining and any future continuation applications to his company, Novacept. Novacept sold its portfolio of patents and patent applications to another company, which was eventually acquired by respondent Hologic, Inc. in 2007. After assigning his rights to Novacept, Truckai founded petitioner Minerva Surgical, Inc. in 2008 and developed a competing device which used a moisture impermeable applicator head to treat abnormal uterine bleeding and was also the subject of an issued patent. In 2013, Hologic filed a continuation application adding claims for an applicator head without regard to whether the applicator head is moisture permeable or impermeable. The U.S. Patent and Trademark Office (USPTO) later issued the patent.

Hologic sued Minerva for patent infringement in 2015. Minerva challenged the validity of the asserted patent, arguing that it was invalid because it lacked written description support for a moisture impermeable head. Hologic invoked the doctrine of assignor estoppel to argue that Minerva (and Truckai) were estopped from challenging the validity of the patent. The district court agreed, and the jury found that Minerva infringed. The Federal Circuit upheld the district court’s decision, finding that assignor estoppel applied.

In a 5-4 decision, the Supreme Court rejected each of the three arguments raised by Minerva challenging the applicability of the doctrine of assignor estoppel. First, the Court rejected Minerva’s argument that the doctrine of assignor estoppel was eliminated by the Patent Act of 1952. The Court held that accepting this argument would eliminate a host of other common law preclusion doctrines in patent disputes, a position the Court found to be “untenable.” Second, the Court rejected Minerva’s argument that the doctrine of assignor estoppel was eliminated by earlier case law from the Court. To the contrary, the Court noted that its earlier rulings cited by Minerva merely enforced boundaries and limitations on the doctrine of assignor estoppel without eliminating the doctrine itself. Third, the Court rejected Minerva’s argument outright that the doctrine should be eliminated for policy reasons to weed out “bad patents.”

Despite reinforcing the doctrine’s existence, the Court did recognize the need to (again) clarify its bounds, which are defined by the principles of fairness and consistency in which the centuries-old doctrine is rooted. The Court pointed out that the primary purpose of the doctrine is to prevent an inventor from making inconsistent representations about a patent’s validity—in the first instance warranting (either explicitly or implicitly) that the patent is valid when assigning his or her rights but then later claiming that the patent he or she assigned is invalid and should never have issued. Conversely, the doctrine of assignor estoppel may not apply in situations where later challenges to patent validity would pose little risk of unfairness or inconsistencies—such as when an inventor assigns a patent application before it is possible to make any warranties of validity for specific patent claims.

The Court helpfully provided representative examples of situations where the doctrine of assignor estoppel would not be an available defense to an inventor’s challenge to patent validity, and these generally arise when the facts indicate that the inventor was not originally in a position to “warrant” the validity of the patented invention, and a later challenge to the validity would not be inconsistent or unfair. One example is situations when an employee assigns rights in any future inventions developed during the course of employment. Such non-specific assignments thus may not be deemed to explicitly or implicitly warrant validity of future inventions not yet conceived at the time of assignment. A further example is situations when an assignee returns to the patent office after the assignment by the inventor and files a broadening amendment or continuation that results in new claims which are “materially broader than the old claims.” In this instance, because the assignor did not warrant the validity of the new and broader claims, estoppel does not apply, and the assignor can challenge the new claims in litigation. Similarly, the Court pointed out that no contradiction arises, and the doctrine should not apply, when a patent that was assigned later becomes invalid due to a change in the governing law.

In line with the above reasoning, the Court vacated the Federal Circuit’s ruling and remanded for consideration of whether Hologic’s new claim was “materially broader” than the claims in Truckai’s patent application at the time of assignment. The four dissenting Justices, however, were persuaded by the arguments presented by Minerva.  Justice Alito dissented on the basis that the Court could not properly decide the issues in this case without first deciding whether to overrule the Supreme Court’s decision in Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co. , 266 U.S. 342 (1924). Justices Amy Coney Barrett, Clarence Thomas, and Neil Gorsuch dissented on the basis that the doctrine of assignor estoppel was in fact abrogated by the Patent Act of 1952 because the doctrine was neither well-settled common law at that time nor did Congress ratify Westinghouse when it enacted the law.

Key Take-Aways

The doctrine of assignor estoppel continues to be an available defense in patent infringement suits to challenge the validity of an asserted patent. Application of assignor estoppel, however, remains a fact-intensive inquiry that requires careful examination of the assignment record and prosecution history to determine what the assignor may or may not have represented at the time of the assignment and whether the claims have been materially broadened since the assignment was executed. Because the focus remains on ensuring fairness and consistency, when patent ownership is derived from an assignment from the inventor, inventors and companies alike should not consider patent assignments to be routine documents without possible negative implications. The following considerations thus should be taken into account in preparing and executing patent assignments.

• Companies seeking to avoid assignor estoppel may wish to include express provisions in employment agreements preventing an inventor from later challenging the validity of the assigned patent or patent application. Care should be taken, however, in the preparation of such provisions as there may be enforceability issues with blanket or overly broad anti-challenge provisions.
• Avoid blanket assignment agreements in the employment context. These are commonly found in employment agreements, but reliance on such blanket requirements as the sole basis for assignment would not be expected to withstand the “fairness and consistency” scrutiny. Assignment agreements should be narrowly tailored in the context of specific patent(s) or patent application(s) and should include representations from the inventor(s) as to the validity of each assigned claim. Keep in mind, however, that inventors may seek to minimize any representations they make regarding the validity of certain claims to avoid the risk that estoppel will apply after their departure.
• It is a common practice for patent assignments to include “catch-all” provisions whereby the inventor assigns rights in all later continuations, divisionals, continuations-in-part, etc. It should not be presumed, however, that catch-all provisions will exclude an inventor’s option to later challenge patent validity, particularly for broadened claims. One option may be to ensure that catch-all phrases are worded to encompass all aspects of the subject matter described in the application without limitation to the actually claimed embodiments. In addition to an initial assignment agreement, assignees may also consider having inventor(s) sign a declaration each time a continuation is filed or amendment is made affirmatively attesting to the validity of the new claims. Since inventor declarations in the US must only be filed before issuance, there may be benefit in delaying execution of the declaration until after allowance, and the execution of the declaration at that time may be evidence that the inventor is accepting validity of the claims as allowed. This poses the risk, however, that the inventor/assignor may be unavailable for signing declaration after allowance, which may be the case if the inventor/assignor has departed the assignee company. An alternative may be to file a declaration at the time of filing the application and also filing a confirmatory declaration after allowance.
• In many situations, companies provide nominal payments to employees upon issuance of patents for which they are inventors. Such payments may be accompanied by documentation indicating that acceptance is evidence that the inventor believes that the claims, as granted, are valid. It is difficult, of course, to predict which employees or inventors may depart a company after assigning his or her rights. This eventuality may be mitigated by providing payments for inventions instead of payments for granted patents. Acceptance of payment for the invention may be later evidence that the inventor believed all aspects of the initially filed application to be valid and thus may dissuade them from challenging the validity of the assigned patent portfolio after the initial assignment has been executed.
• It is important to recognize that the Patent Trial and Appeal Board does not apply the doctrine of assignor estoppel to inter partes review proceedings. Thus, even in situations with assignor estoppel may be an effective defense in court proceedings, IPR proceedings may remain as a viable alternative to challenge the validity of a patent asserted in district court.
• Applicability of assignor estoppel should also be a consideration when acquiring existing patent portfolios. Proper diligence thus may include making determinations of what changes (specifically broadening changes) have been made to the patents to determine whether estoppel may apply and secure attestations from the assignor regarding the validity of those claims.

Still to Be Seen

Several open questions remain after the Supreme Court’s decision, including what evidence is needed to demonstrate that claims have been made “materially broader” post-assignment. It is also unclear whether all inventors must make representations regarding the validity of the claims-at-issue to apply assignor estoppel or representations of only one inventor would be sufficient. Similarly, it is unclear whether estoppel would have applied if Truckai was only a mere employee of Minerva and not its founder and principal inventor. Despite these remaining questions, assignor estoppel remains as an effective defense for patent owners and can be solidified through effective planning and execution of assignment documents.

Image Source: Deposit Photos Author: tashatuvango Image ID: 77590300 

Help Support IPWatchdog: Why Your Donation Matters

At IPWatchdog, we are dedicated to providing in-depth analysis, news, and educational content on intellectual property law and policy. As an independent media company, we rely on the support of our sponsors and our community to maintain the quality and accessibility of our resources. Your donation enables us to continue our mission, ensuring that innovators, attorneys, and enthusiasts have access to the latest insights and developments in the field. By donating, you are not only helping us sustain our operations but also contributing to the growth and advancement of the intellectual property community.

Every contribution, no matter the size, is greatly appreciated and makes a difference.

Help Support IPWatchdog With a Donation

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

Join the Discussion

Varsity sponsors.

Latest IPW Posts

Cafc vacates summary judgment ruling in third parkervision appeal for improper collateral estoppel analysis, other barks & bites for friday, september 6: house version of pera introduced; judicial council confirms extension of newman suspension; openai asks court to dismiss claims and focus on fair use in copyright battle, report: the united states is leading the genai race – not china, how to satisfy constitutional and statutory standing requirements in patent infringement actions, district court issues mixed ruling in blackbeard copyright case, ipwatchdog events, webinar: managing trademark workflows more efficiently and profitably, webinar – sponsored by anaqua, ipwatchdog live 2024 at the renaissance arlington capital view, life sciences masters™ 2024, industry events, executive education: pharmaceuticals and the law, litfincon – the premier litigation finance conference, fall institute on intellectual property by hipla & ipil, from ipwatchdog.

More from IPWatchdog

September 8, 2024

September 6, 2024

September 5, 2024

September 4, 2024

Our website uses cookies to provide you with a better experience. Read our privacy policy for more information. Accept and Close

• Practical Law

Transferring intellectual property rights: avoiding the pitfalls

Practical law uk articles 2-504-4154  (approx. 11 pages).

• What IPR are from a legal perspective.
• The practicalities and consequences of the registration of registrable IPR transactions, and the due diligence to be conducted.
• How to identify the relevant IPR to be transferred.
• How to document the transfer.
• Some important issues concerning liability arising on the transfer of IPR.

Legal nature of IPR

Confidential information, community rights, registering assignments of ipr, administrative and costs issues.

• It was not practicable to register the assignment within the six-month time limit.
• The assignment was registered as soon as practicable thereafter.

Protecting mortgages and charges

Registered rights due diligence.

• Carry out an initial search of the register to check that the seller is the registered proprietor. Check for any earlier assignments to that seller and investigate thoroughly any such assignments and the circumstances surrounding them. If there are any such assignments, consider taking an assignment of the seller's causes of action for failure to deliver good title against his own seller (if any still remain).
• Carry out a second search on the morning of completion as the IPO/OHIM update their registers at midnight following each working day.
• Register the transaction on the day it completes, wherever possible, or as soon as possible thereafter.
• Require the seller to assign with full title guarantee (see " Liability " below).

Identifying the relevant IPR

• Identify the relevant registered IPR which are to be transferred.
• Produce a conceptual definition of the non-registered IPR which are to be included in the sale, such as "all the company's know-how (whether recorded or not) and documentation relating to the process of manufacturing xyz".
• Identify which (if any) of the IPR being transferred will still need to be used by the seller or its group after the transaction has taken place, and determine how such access is to be secured (this will usually require some form of licence back).
• Identify which IPR are not going to be transferred to the buyer, and consider whether or not to write to the buyer explaining precisely which IPR are not going to be included in such a sale and why. This can stop arguments occurring later as to what was meant to be included or excluded, and should also make an action for rectification (correction) of the assignment agreement much more difficult for the buyer to win.
• Properly instruct the seller's negotiating team and lawyers as to the matters above.

Documenting the transaction

Assigning by deed, method of assignment in a sale and purchase agreement, what should be assigned in an spa, country-specific agreements, patent attorney files.

• The person disposing of the IPR has the right to dispose of them.
• The person disposing of the IPR will do all he reasonably can do, at his own cost, to give the assignee the title he purports to give ( section 2(1), 1994 Act ).
• Charged or encumbered the IPR with any charge or encumbrance, which still exists at the time of the present disposition.
• Granted any third party rights in relation to the IPR, which still subsist at the time of the present disposition.
• Allowed anyone else to do so.

Excluding liability

Sale of goods act 1979, mortgages and charges of ipr.

• An outright assignment of the legal title in the IPR to the lender.
• A right of redemption; that is, the right to have the legal title transferred back to the borrower once repayment and other obligations have been fulfilled.
• Pending exercise of the right of redemption by the borrower, some form of licence back from the lender to the borrower to enable the borrower to use the IPR in its business.
• The charging clause.
• A transfer mechanism to allow the transfer of the IPR in the event of default.
• A range of negative obligations on the borrower not to grant conflicting security or other interests in the charged IPR.

Practicalities of assignment: an overview

Problems with the ipr registration system.

• Trade Marks
• Confidentiality

Try our Advanced Search for more refined results

The Practice of Law

• Law360 Pulse

Business of Law

Law360 authority, deep news & analysis, tax authority, employment authority, insurance authority, real estate authority, bankruptcy authority, healthcare authority.

• Law360 Employment Authority
• Law360 Tax Authority
• Law360 Insurance Authority
• Law360 Real Estate Authority
• Law360 Healthcare Authority
• Law360 Bankruptcy Authority

• Law360 In-Depth
• Law360 Podcasts
• Regional Powerhouses
• Law360's MVPs
• Women in Law Report
• Diversity Snapshot
• Practice Groups of the Year
• Rising Stars
• Titans of the Plaintiffs Bar
• Adv. Search & Platform Tools
• About all sections
• Browse all sections
• Class Action
• Competition

Expert Analysis

• Intellectual Property
• Product Liability
• Track attorneys
• Track judges
• Join the Law360 team
• Search legal jobs
• Learn more about Law360
• Read testimonials
• Contact Law360
• Sign up for our newsletters
• Law360 Company
• About Law360 Authority
• Resource Library

Considerations For Patent Assignments After Minerva Ruling

Law360 is on it, so you are, too..

A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions.

A Law360 subscription includes features such as

• Daily newsletters
• Expert analysis
• Advanced search
• Judge information
• Real-time alerts
• 450K+ searchable archived articles

Experience Law360 today with a free 7-day trial.

Already a subscriber? Click here to login

Related Sections

• Commercial Contracts
• Life Sciences
• Westman Champlin
• F. Hoffmann-La Roche Ltd.
• Hologic Inc.
• Marathon Oil Corp.
• Minerva Surgical Inc.
• Unisys Corp.

Government Agencies

• U.S. Court of Appeals for the Federal Circuit
• U.S. District Court for the District of Delaware
• U.S. Patent and Trademark Office
• U.S. Supreme Court
• I forgot my password
• I took a free trial but didn't get a verification email
• How do I sign up for a newsletter?

Already have access? Click here to login

Get instant access to the one-stop news source for business lawyers, sign up now for free access to this content.

Email (NOTE: Free email domains not supported)

PLEASE NOTE: A verification email will be sent to your address before you can access your trial.

Password (at least 8 characters required)

Confirm Password

Show all interests

Law360 may contact you in your professional capacity with information about our other products, services and events that we believe may be of interest. You’ll be able to update your communication preferences via the unsubscribe link provided within our communications. We take your privacy seriously. Please see our Privacy Policy .

Already have access?

• Password: Forgot your password?
• Remember login

Sign up for our Appellate newsletter

You must correct or enter the following before you can sign up:.

Law360 takes your privacy seriously. Please see our Privacy Policy .

• 617.395.7000
• Artificial Intelligence
• Chemical & Material Sciences
• Computer Technology & Software
• Consumer Products
• Electronics
• Life Sciences
• Mechanical & Industrial
• Medical Devices

Practice Areas

• Strategic Counseling
• Licensing & Transactions
• Trade Secret
• News & Events
• Knowledge Center
• Entrepreneurship Center
• Diversity, Equity, and Inclusion
• Client Portal

T: 617.395.7000

E:  [email protected]

D. Mass. IP Litigation Blog

• Knowledge Center :
•   IP Insights

A Potential and Unintended Consequence of ‘Routine’ Patent Assignments

• April 20, 2022

By: Thomas P. McNulty and Peter C. Lando

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

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

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

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

Assignment of Future Inventions

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

Post-Assignment Changes in Patent Law

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

Patent Claims that were Broadened by the Assignee

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

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

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

Entities To Whom the Estoppel Applies

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

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

Consideration Supporting Estoppel

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

What Assignor Estoppel Does Not Prohibit

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

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

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

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

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

• Thomas P. McNulty
• Peter C. Lando

Professionals

SHARE THIS POST

How can we help you?

• More Blog Popular
• Who's Who Legal
• Instruct Counsel
• My newsfeed
• Save & file
• View original
• Follow Please login to follow content.

add to folder:

• My saved (default)

Register now for your free, tailored, daily legal newsfeed service.

Find out more about Lexology or get in touch by visiting our About page.

Complying With The Proof Of Right Requirement For Making Patent Applications In India

In cases where the applicant of a patent application in India is an assignee of the true and first inventor, the applicant is required to furnish a proof of right to make the patent application. In this article, we explore the various documents/legal instruments that may be furnished by the applicant to meet the proof of right requirement of the IPO. Provided below are examples of such documents or legal instruments, the conditions warranting their usage, and the best practices related to the filing of such documents or legal instruments to meet the proof of right requirement.

• Endorsement in Form-1 : Probably the simplest way of meeting the proof of right requirement is to have the Form-1 executed by the inventors. It is imperative to note here that the Form-1 can be executed in counterparts, in cases where multiple inventors residing at different geographical locations are involved in the invention. The executed Form-1 should be submitted by the applicant either along with the filing of the application or the latest within six months from the filing of the application. In terms of acceptability, the date of execution of the Form-1 could be any date, i.e., either before the filing of the application or after it as well, as it serves as a mere declaration made by the inventors in cases where an assignment is already existing between them and the applicant. However, sometimes there may be an objection on Form-1 that bears an execution date later than the date of filing of the application. Therefore, as a best practice and in order to avoid unnecessary formal objections from the IPO, the executed Form-1 should bear a date that is the same as the date of filing of the application or any date prior to that.

The guiding aid for the evaluation of patent applications – the manual of patent office practice and procedure (MPPP) states that the proof of right requirement can be met by way of an endorsement made by the inventor in the application, i.e., Form-1, or by the filing of the assignment deed existing between the inventor(s) and the Applicant. Taking a detailed look at the relevant column provided in the Form-1 to carry out said endorsement, the Form-1 makes it abundantly clear that mere endorsement of the Form-1 is only a signed declaration by the inventors to mee the proof of right requirement and there need to be a pre-existing assignment between the inventor and the applicant. More specifically, the form states in the relevant column “in case the applicant is an assignee: the inventor(s) may sign herein below ….”, thus clarifying the declaratory nature of the endorsement of Form-1.

• Original assignment deed: As is stated in the form for application for grant of patent and is also specified in the MPPP as explained above, an applicant can also submit an original copy of the assignment deed existing between the true and first inventors and the applicant, to meet the proof of right requirement. When using this legal instrument to comply with the proof of right requirement, care should be taken that the assignment deed counts as a valid contract. More specifically, when having the assignment deed drafted and executed, the applicant should ensure that the assignment deed clearly specifies the consideration value or at least mentions that some consideration value has been provided in exchange to the inventor(s) in return for the transfer of right to make the patent application. Furthermore, the applicant should also ensure that the assignment deed is either a global assignment or at least clearly mentions India as one of the countries where the assignee can make the patent application for the grant of a patent for the invention.
• Certified or Notarized copy of the assignment deed: In instances where a patent application is filed seeking priority of a previously filed patent application filed in a convention country, a certified copy of assignment issued by the patent office of the convention country can be submitted. Alternatively, as per the colloquial practice, a copy of the assignment deed submitted in the convention country may be submitted by the applicant to comply with the proof of right requirement. As a best practice, the copy of the assignment deed should be locally notarized prior to submission with the IPO.
• Employment contract: In instances where the inventor is no longer reachable for the execution of Form-1, an applicant may furnish a copy of the employment contract as proof of right document to meet the requirement. When submitting such a document as proof of right, one should keep in mind that the employment contract would only hold good as long as a clear cause of assignment of IP developed by the inventor to the employer, i.e., the applicant is specified in the employment contract. Also, the employment contract should bear the signature of the inventor, for it to hold good as the proof of right document.

Along with the employment contract, the Patent Office often also demands for an employment certificate which states the inventor’s employment duration with the employer. A possible reason for this demand may be that the employment certificate may help in establishing that the inventor was still employed with the employer when the patent application was made. Therefore, as a safe practice and as a proactive measure, the applicant may also submit the employment certificate along with the employment contract to comply with the proof of right requirement.

• Confirmatory assignment: In many instances, the applicant may not wish to file the assignment deed or may not be in a position to file the assignment deed. For example, as such documents are made public, the applicant may not wish to file the assignment deed owing to the confidential monetary clauses, if present in the assignment deed. Another case could be that the original assignment deed may have been inadvertently misplaced. In such cases, to comply with the proof of right requirement, the applicant may file a confirmatory assignment. The confirmatory assignment may be understood as an assignment, executed at a later date, which confirms an earlier made assignment between the parties involved. The confirmatory assignment is to be executed by the parties involved, i.e., both the applicant and the inventors. This serves as an alternate to form-1.
• Declaration as to entitlement to file the patent application by applicant, in case of PCT applications: In instances where the applicant has already filed a declaration under PCT Rule 4.17(ii), in respect of a PCT application for which a National Phase application has been filed in India, the applicant may submit a copy of the above declaration with the IPO to comply with the proof of right requirement. However, some of the Controllers at the IPO, despite the above submitted declaration, object that such a declaration does not meet the requirement of proof of right. In such a case, the applicant can leverage the provisions stated under PCT Rule 51bis. 2(ii) to establish their case of compliance of the proof of right. The PCT Rule 51bis. 2(ii) states that the designated Office need not seek any document or evidence relating to the assignee’s entitlement to apply for the patent, if a declaration to that effect is contained in the request or is submitted directly to the designated Office, unless the designated office has reasonable doubts to the veracity of the declaration made by the applicant. Therefore, if no reasonable doubt has been expressed in an objection, it may be countered that the patent office is not justified in objecting to the acceptability of declaration under PCT Rule 4.17(ii).
• Affidavits: Referring again to the instance where the inventor is not available for the execution of the Form-1 and if, for any reason, the employment contract or the assignment deed cannot be provided, the applicant may consider filing for an affidavit, declaring his entitlement to file for the patent on behalf of the inventor(s). The affidavit serves as a legal instrument and it is highly preferred that supporting documents be provided along with the affidavit. Such documents could be, a record of attempts, such as e-mails and/or phone calls, made by the applicant to reach the inventor, employment tenure certificate of the inventor, and executed testimonials from other inventors, in case of multiple inventors, etc.. However, owing to the contentious nature of affidavits and the liability on to the officer signing the affidavit, this is the least preferred option of complying with the proof of right requirement.

As the proof of right requirement is a non-discretionary requirement specified in the Indian patent law, the applicants must therefore, ensure compliance to this requirement. With the help of the aforementioned documents/legal instruments and knowledge of the various circumstances surrounding their usage and applicability, an applicant can easily comply with the proof of right requirement for making a patent application in India.

Filed under

Organisations.

• Indian Patent Office

Popular articles from this firm

Law respects possession -understanding the concept of adverse possession *, analysing delhi high court’s decision on the issue of return of plaint due to lack of jurisdiction *, mobilising justice: exxon mobil's trademark victory over trademark infringement *, navigating intellectual property and free speech: insights from the dabur vs. dhruv rathee case *, india announces progressive changes in patents rules, 2003 *.

If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected] .

Related practical resources PRO

• How-to guide How-to guide: How to identify and remediate competition law infringements (UK)
• How-to guide How-to guide: How to carry out a fair dismissal on the grounds of SOSR (UK)
• Checklist Checklist: Conducting a competition compliance audit (UK)

Related research hubs

“New EPO Requirements Regarding Patent Assignments”

As of November 1, 2016, new European Patent Office (EPO) guidelines require that the signatures of not only the assignor(s), but also the assignee(s) appear on assignment documents.

These changes have no effect on assignments recorded at the EPO prior to November 1, 2016.  However, when recording a transfer after November 1, 2016, an assignment of a European application must include:

• Signature of the assignor(s) (e.g., the inventor(s)) effecting transfer of rights;
• Signature of the assignee(s), acknowledging acceptance of the transfer; and
• Specific job title of individual signing on behalf of the assignee (rather than “authorized representative” or a similar designation).

The EPO is expected to refuse to record assignments that do not satisfy the foregoing requirements.  

Accordingly, we believe that in the future all assignments should be signed by all parties.  Regarding the cases where an assignment has been executed but has not been recorded at the EPO, and where the assignment document was only signed by the assignor(s), you may consider obtaining a second signature from a representative of the assignee acknowledging acceptance of the rights.  As another alternative, it might be possible for both parties to sign a “confirmatory assignment” to confirm that an assignment that took place on a date prior to the effective date of these new guidelines.

If you have questions as to particular situations, please contact a Marshall Gerstein patent attorney .

The information contained in this alert is for informational purposes only and is not legal advice or a substitute for obtaining legal advice. Under applicable rules of professional conduct, this communication may constitute Attorney Advertising. © 2016 MARSHALL, GERSTEIN & BORUN LLP, Chicago, Illinois. All rights reserved.

Please note that email communications sent through this website do not create an attorney-client relationship between you and our firm, and will not prevent us from representing another person or company involved in the same matter that is the subject of your message. Unless you are already a client of Marshall, Gerstein & Borun LLP, do not send any information that you consider privileged or confidential. Click “Accept” below to confirm that you have read and understand this message.

By clicking “Proceed” below, you will be opening a new browser window and leaving our website.

This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Cookie Policy.

Assignments overview and pitfalls to beware!

03 December 2012

Many patents will see a change in ownership at some stage in their lives. Assignments are commonplace and occur for a variety of reasons; for example, in the context of a business sale where a buyer purchases all of the assets (including intellectual property assets) of a business from the vendor. Another is in the context of intra-group reorganisations.

Assignments can also occur as part of settlement of a dispute. This article outlines some of the pitfalls of which you should be aware when assigning patents; many of which can be averted by careful drafting of the assignment agreement.

Unless the assignment is intra-group, there will usually be some distance between what the assignee wants (typically, a variety of representations, warranties and indemnities in respect of the assigned rights) and what the assignor is prepared to give. This is a commercial decision and hence no two negotiated patent assignments will be identical.

Consideration

Under English law, to be a valid contract there must be consideration which is either money or money's worth. This is often overlooked but a key point required for the assignment agreement to be legally binding. Whilst the acceptance of mutual obligations may suffice, it is simplest to have a sum of money (even if only for £1). An alternative is to execute the assignment as a deed, though there are specific formalities which must be followed for the agreement to be a deed. Of course, if the parties agree to nominal consideration (eg, £1), it is important that this small amount is actually paid to the assignor.

An assignment of a UK patent (or application) must be in writing and signed by the assignor. It used to be the case that an assignment of a UK patent (or application) would need to be signed by both parties, however the law was changed in 2005. In reality, both parties will usually sign the assignment agreement. Where one or both of the parties is an individual in their personal capacity or a foreign entity, special 'testimonial' provisions are required; for example the signature to the assignment may need to be witnessed.

The assignment

English law distinguishes two types of assignment: legal and equitable. To assign the legal interest in something means that you have assigned simply the title to that property and not the right to exercise the rights inherent in it. This is the equitable (beneficial) interest and if this is not also assigned with the legal title, this can result in a split in ownership. Unless the parties specifically agree otherwise, legal and beneficial ownership should always be assigned together. It is possible to have co-assignees (ie, co-owners) but the terms of the co-ownership will need to be carefully considered.

It is possible to assign the right to bring proceedings for past infringements in the UK, but not in some other jurisdictions. Where non-UK rights are involved, local advice may be required as to whether such an assignment would be enforceable as against a prior infringer. This potential uncertainty makes a robust further assurance clause even more desirable (see below), to ensure the assignor's co-operation after completion of the assignment.

The assignee will also typically argue for (and the assignor will typically resist) a transfer with 'full title guarantee', as this implies as a matter of law certain covenants: that the assignor is entitled to sell the property; that the assignor will do all it reasonably can, at its own expense, to vest title to the property in the assignee; and that the property is free from various third party rights.

In terms of European patents (EP), it is important to remember that ownership of an EP application is determined under by the inventor/applicant's local law, rather than under European patent law. This means that a formal, written assignment agreement should be executed to ensure that the applicant is entitled to ownership of the patent application, for example in cases where the work undertaken was done by a consultant or where local law dictates that the owner is the inventor(s). An assignment should include assignment of the right to claim priority, as well as the right to the invention and any patent applications. This need to obtain an effective assignment of the application (and right to claim priority) is particularly important where a priority application has been made in the name of the inventor. If such an assignment is not executed before applications which claim priority from earlier cases (for example, PCT applications) are filed, the right to ownership and/or the right to claim priority may be lost.

Don't forget tax

Currently, there is no stamp duty payable on the assignment of intellectual property in the UK. However, particularly for assignments which include foreign intellectual property rights, there can be considerable tax implications in transferring ownership of intellectual property rights in some countries and it is always prudent to check that the transfer will not result in excessive tax liabilities for you.

Update the register

Registered rights need to be updated at the patent offices. You will need to decide who pays for this: in the case of one patent, it is a simple process, however in the case of a whole portfolio, the costs can be considerable. Remember, if you ever need to take any action on a patent you own, you need to ensure you are the registered owner of that right at the applicable office.

In the UK, assignments can be registered but there is no statutory requirement to do so. In the case of international assignments, local offices may require recordal of the assignment. In any event, it is desirable for an assignee to ensure that the transaction is recorded. Section 68 of the UK Patents Act provides that an assignee who does not register the assignment within six months runs the risk of not being able to claim costs or expenses in infringement proceedings for an infringement that occurred before registration of the assignment, although recent case-law has reduced this risk somewhat.

Further assurance

The assignee will typically take charge of recordals to the Patents Offices; however they will often need the assignor's help in doing so. A 'further assurance' clause is a key element of the assignment from an assignee's point of view both for this purpose and for assisting in the defence and enforcement of patents or applications for registration. On the other hand, the assignor will typically seek to qualify its further assurance covenant by limiting it to what the assignee may reasonably require, and that anything done should be at the assignee's expense. An assignor should also require that recordals are done promptly to minimise their future correspondence from patent offices.

International transactions

In transactions which involve the transfer of patents in various countries, the parties can execute a global assignment which covers all the patents being transferred, or there can be separate assignments for each country. The former, global assignment, is usually preferred however this will frequently need to be supplemented by further confirmatory assignments in forms prescribed by the relevant international patent registries. As noted above, the preparation and execution of such assignments can be time-consuming and costly, hence the need to decide in advance who bears the cost of such recordals, and the assignee should insist on a further assurance provision.

Sharing IP information such as new legislation, relevant case law, market trends and other topical issues is important to us. We send out our IP newsletters by email about once a month, publish IP books annually, share occasional IP news alerts and also invitations to our IP events such as webinars and seminars. We take your privacy seriously and you can change your mailing preferences or unsubscribe at any time.

To sign up to our marketing communications, please fill out this form.

Your contact details

What would you like to hear from us about?

You can contact us at [email protected], telephone +44 (0) 20 7269 8850 or write to us at D Young & Co LLP, 3 Noble Street, London, EC2V 7BQ to update your preferences at any time.

We use cookies in our email marketing communications. You can view our privacy policy here and cookie policy here .

Almost finished! Submit this form and we will send you an email for you to confirm your preferences.

IP Assignments: Nunc Pro Tunc Assignments in Patent, Trademark, and Copyright Law

by John DiGiacomo

Like any valuable business asset, patents, trademarks and copyrights can be sold, assigned and licensed. Indeed, assignment and licensing is common with respect to intellectual property. In legal terms, an “assignment” is a transfer of ownership, either full ownership or partial. In basic terms, a nunc pro tunc is a type of assignment that is backdated. Nunc pro tunc is Latin meaning “now for then.”A nunc pro tunc assignment will be signed on a particular date, but parties will deem the assignment to have been granted on some earlier date.

For a Trademark registered on May 1, 2017, an example of how a nunc pro tunc assignment provision might look like this:

Now, therefore, for good and valuable consideration, ASSIGNOR agrees that ASSIGNOR hereby assigned unto ASSIGNEE nunc pro tunc effective as of October 1, 2020, all right, title and interest in and to the May 1, 2017 trademark described herein … In testimony whereof, ASSIGNOR, has signed this instrument this 1st day of October 2020.”

In this example, the assignment is deemed to have been granted on May 1, 2017, but has an effective date of October 1, 2020.

In business terms, nunc pro tunc assignments are often used where past IP assignments are made verbally or via conduct. In the rush to get IP “to market,” it is not uncommon for assignments to be granted, but not reduced to writing. Nunc pro tunc assignments are also commonly used to bridge gaps in the “chain of title” for IP. This can happen when corporations and/or assets are sold, but proper paperwork is missing. Purchasers believe that they have ownership to certain patents, trademarks, or copyrights, but the missing documents cause “gaps” in the chain of title. These “gaps” can be cured by obtaining a nunc pro tunc assignment from the original owner of the IP. In the same manner, nunc pro tunc assignments are often used as part of settlements for litigation involving claims of patent, trademark and/or copyright infringement or disputes over ownership

For litigation purposes, nunc pro tunc assignments are often used to give a party legal standing to initiate litigation. To have “standing” to initiate litigation, a party must have some ownership interest in the patent, trademark or copyright. However, for courts, “standing” is based on the effective date of the assignment, not the earlier date listed in the nunc pro tunc assignment.

However, for other purposes, the earlier assignment date listed in the nunc pro tunc assignment is the credited date. For example, an assignment of a registered trademark must be recorded with the US Patent & Trademark Office (“USPTO”). This is done electronically. The assignment must be uploaded along with the proper recordation form and applicable fee. For the USPTO, the trademark assignment is based on the date designated for the assignment rather than the date of execution of the nunc pro tunc assignment.

So, when should you use a nunc pro tunc assignment for a trademark? The most common situations include:

• When a trademark was previously assigned but not recorded – Sometimes, an assignment of trademark ownership may occur but the paperwork is not properly filed or recorded with the United States Patent and Trademark Office (USPTO). In this case, a nunc pro tunc assignment can be used to correct the oversight and retroactively assign the trademark to the new owner.
• When the original assignment was not effective – A nunc pro tunc assignment can also be used to correct a defective assignment. For example, if the original assignment was not properly executed or lacked essential terms, the nunc pro tunc assignment can be used to correct those issues and make the assignment retroactively effective.
• When there is a change in business structure – A nunc pro tunc assignment may be necessary when there is a change in the business structure of the trademark owner, such as a merger or acquisition. In this case, the new owner may need to retroactively assign the trademark to themselves to ensure that they have proper ownership and control over the trademark.
• When there is a dispute over ownership – If there is a dispute over the ownership of a trademark, a nunc pro tunc assignment may be used to resolve the issue. This can occur when multiple parties claim ownership of a trademark, or when there is confusion over who actually owns the trademark.
• When the trademark was abandoned – In some cases, a trademark may have been abandoned by the previous owner. If this occurs, a nunc pro tunc assignment may be used to assign ownership to the new owner retroactively. However, it is important to note that there are strict time limits for filing a nunc pro tunc assignment in these cases.

It is important to note that a nunc pro tunc assignment should only be used when there is a genuine need to correct an error or oversight in the assignment of a trademark ownership. It is not a tool to be used to cover up illegal or unethical behavior.

In addition, a nunc pro tunc assignment can be a complex legal process that requires the assistance of an experienced trademark attorney. The attorney can help ensure that the assignment is executed properly and in compliance with all legal requirements.

Contact Revision Legal

For more information, contact the IP and  business lawyers at Revision Legal at 231-714-0100.

Extra, Extra! Recent Posts

Esports Intellectual Property Lawyers: Gaming Law

Like any business, esports businesses must protect their various forms of intellectual property (“IP”). IP can be valuable. Indeed, with some esports businesses, the largest component of their business valuation is their IP, including trademarks, copyrights, patent rights, domain name registrations, and trade secrets. IP can also include various assignments, licenses, and other permission-granting contractual […]

E-Commerce Acquisition Lawyers

Revision Legal is a law firm focusing on e-commerce and internet law with deep experience in providing legal services with respect to mergers and acquisitions of e-commerce businesses. E-commerce is, of course, businesses that make money online. But that “online” aspect presents unique legal and practical challenges for e-commerce acquisitions. Any business acquisition requires a […]

Quality Control Requirements for Trademark Licensing

Trademark licensing can create valuable revenue streams for your business. Licensing has the advantage that your business retains possession of the trademark and can create more than one licensing regime over the life of your business. Licensing is also a method of expanding the reach (and value) of your trademark without the need to invest […]

Put Revision Legal on your side

An official website of the United States government Here’s how you know keyboard_arrow_down

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Jump to main content

Transferring ownership/ Assignments FAQs

Assignment Center has replaced the Electronic Patent Application System (EPAS) and Electronic Trademark Assignment System (ETAS). Assignment Center makes it easier to transfer ownership or change the name on your patent or trademark registration. 

See our how-to guides on using Assignment Center for   patents  and  trademarks . If you have questions, email  [email protected]  or call customer service at 800-972-6382.

Show all FAQs

• Browse FAQs

Transferring Ownership / Assignments

• Transferring Ownership / Assignments, Procedures

The Assignment Recordation Branch in the Public Records Division processes and records assignment documents for both patent and trademark properties.

Essentially the rules:

(1) specify the minimum information about the transaction that must be submitted;

(2) require submitters to submit this information of a separate cover sheet; and

(3) specify that submissions must be legible and of such quality to permit processing; and

(4) pay the proper recording fee.

The rules permit submission of true copies of assignment-related documents; original documents are not required nor desired, as they will not be returned.

You may contact the Assignment Center customer service desk at 571-272-3350 from 8:30 a.m. to 5 pm ET Mondays through Fridays, except on federal holidays. You may e-mail questions about electronic filing to [email protected] .

Payment may be made by use of a check, credit card, money order or USPTO deposit account if submitting documents in paper. Trademark assignments submitted electronically may be paid by credit card, USPTO deposit account or electronic fund transfer (EFT). The USPTO accepts VISA, MASTERCARD, AMERICAN EXPRESS and DISCOVER credit cards.

>> see How to Pay Fees for a current fee schedule and for more about fee payments

No. All documents that meet the minimum requirement in 37 CFR 3 are processed and recorded. Persons buying or selling properties should be sure that there is an accurate chain of title in place before submitting recordation requests.

No, these forms are not mandatory. However, the USPTO strongly encourages their use. Completing the forms in their entirety ensures that all the required information for recordation has been sent to the office. The forms are available in PDF-fillable format on the USPTO Forms page , thus making them quick and easy to prepare.

When these forms are received in the USPTO, they are scanned along with the supporting documentation. The bibliographic data from the cover sheet is then entered into the PTAS system and the documents are processed.

Additional information about this page

FAC Number: 2024-06 Effective Date: 08/29/2024

Subpart 27.3 - Patent Rights under Government Contracts

27.300 scope of subpart..

This subpart prescribes policies, procedures, solicitation provisions, and contract clauses pertaining to inventions made in the performance of work under a Government contract or subcontract for experimental, developmental, or research work. Agency policies, procedures, solicitation provisions, and contract clauses may be specified in agency supplemental regulations as permitted by law, including 37 CFR 401.1 .

27.301 Definitions.

As used in this subpart-

Invention means any invention or discovery that is or may be patentable or otherwise protectable under title 35 of the U.S. Code, or any variety of plant that is or may be protectable under the Plant Variety Protection Act ( 7 U.S .C. 2321 , et seq .)

Made means-

(1) When used in relation to any invention other than a plant variety, means the conception or first actual reduction to practice of the invention; or

(2) When used in relation to a plant variety, means that the contractor has at least tentatively determined that the variety has been reproduced with recognized characteristics.

Nonprofit organization means a university or other institution of higher education or an organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 ( 26 U.S.C. 501(c) ) and exempt from taxation under section 501(a) of the Internal Revenue Code ( 26 U.S.C. 501(a) ), or any nonprofit scientific or educational organization qualified under a State nonprofit organization statute.

Practical application means to manufacture, in the case of a composition or product; to practice, in the case of a process or method; or to operate, in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are, to the extent permitted by law or Government regulations, available to the public on reasonable terms.

Subject invention means any invention of the contractor made in the performance of work under a Government contract.

27.302 Policy.

(a) Introduction . In accordance with chapter 18 of title 35, U.S.C. (as implemented by 37 CFR part 401 ), Presidential Memorandum on Government Patent Policy to the Heads of Executive Departments and Agencies dated February 18, 1983, and Executive Order 12591, Facilitating Access to Science and Technology dated April 10, 1987, it is the policy and objective of the Government to-

(1) Use the patent system to promote the use of inventions arising from federally supported research or development;

(2) Encourage maximum participation of industry in federally supported research and development efforts;

(3) Ensure that these inventions are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery;

(4) Promote the commercialization and public availability of the inventions made in the United States by United States industry and labor;

(5) Ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions; and

(6) Minimize the costs of administering patent policies.

(b) Contractor right to elect title .

(1) Generally, pursuant to 35 U.S.C. 202 and the Presidential Memorandum and Executive order cited in paragraph (a) of this section, each contractor may , after required disclosure to the Government, elect to retain title to any subject invention .

(2) A contract may require the contractor to assign to the Government title to any subject invention -

(i) When the contractor is not located in the United States or does not have a place of business located in the United States or is subject to the control of a foreign government (see 27.303 (e)(1)(i));

(ii) In exceptional circumstances, when an agency determines that restriction or elimination of the right to retain title in any subject invention will better promote the policy and objectives of chapter 18 of title 35, U.S.C. and the Presidential Memorandum;

(iii) When a Government authority, that is authorized by statute or executive order to conduct foreign intelligence or counterintelligence activities, determines that the restriction or elimination of the right to retain title to any subject invention is necessary to protect the security of such activities;

(iv) When the contract includes the operation of a Government-owned, contractor-operated facility of the Department of Energy (DOE) primarily dedicated to the Department’s naval nuclear propulsion or weapons related programs and all funding agreement limitations under 35 U.S.C. 202(iv) for agreements with small business concerns and nonprofit organizations are limited to inventions occurring under the above two programs; or

(v) Pursuant to statute or in accordance with agency regulations.

(3) When the Government has the right to acquire title to a subject invention , the contractor may , nevertheless, request greater rights to a subject invention (see 27.304-1 (c)).

(4) Consistent with 37 CFR part 401 , when a contract with a small business concern or nonprofit organization requires assignment of title to the Government based on the exceptional circumstances enumerated in paragraph (b)(2)(ii) or (iii) of this section for reasons of national security, the contract shall still provide the contractor with the right to elect ownership to any subject invention that-

(i) Is not classified by the agency; or

(ii) Is not limited from dissemination by the DOE within 6 months from the date it is reported to the agency.

(5) Contracts in support of DOE’s naval nuclear propulsion program are exempted from this paragraph (b).

(6) When a contract involves a series of separate task orders , an agency may structure the contract to apply the exceptions at paragraph (b)(2)(ii) or (iii) of this section to individual task orders .

(c) Government license . The Government shall have at least a nonexclusive, nontransferable, irrevocable, paid-up license to practice, or have practiced for or on behalf of the United States , any subject invention throughout the world. The Government may require additional rights in order to comply with treaties or other international agreements. In such case, these rights shall be made a part of the contract (see 27.303 ).

(d) Government right to receive title.

(1) In addition to the right to obtain title to subject inventions pursuant to paragraph (b)(2)(i) through (v) of this section, the Government has the right to receive title to an invention-

(i) If the contractor has not disclosed the invention within the time specified in the clause; or

(ii) In any country where the contractor-

(A) Does not elect to retain rights or fails to elect to retain rights to the invention within the time specified in the clause;

(B) Has not filed a patent or plant variety protection application within the time specified in the clause;

(C) Decides not to continue prosecution of a patent or plant variety protection application, pay maintenance fees, or defend in a reexamination or opposition proceeding on the patent; or

(D) No longer desires to retain title.

(2) For the purposes of this paragraph, filing in a European Patent Office Region or under the Patent Cooperation Treaty constitutes election in the countries selected in the application(s).

(e) Utilization reports . The Government has the right to require periodic reporting on how any subject invention is being used by the contractor or its licensees or assignees. In accordance with 35 U.S.C. 202(5) and 37 CFR part 401 , agencies shall not disclose such utilization reports to persons outside the Government without permission of the contractor. Contractors should mark as confidential/proprietary any utilization report to help prevent inadvertent release outside the Government.

(f) March-in rights.

(1) Pursuant to 35 U .S.C. 203, agencies have certain march-in rights that require the contractor, an assignee, or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to responsible applicants, upon terms that are reasonable under the circumstances. If the contractor, assignee or exclusive licensee of a subject invention refuses to grant such a license, the agency can grant the license itself. March-in rights may be exercised only if the agency determines that this action is necessary-

(i) Because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in the field(s) of use;

(ii) To alleviate health or safety needs that are not reasonably satisfied by the contractor, assignee, or their licensees;

(iii) To meet requirements for public use specified by Federal regulations and these requirements are not reasonably satisfied by the contractor, assignee, or licensees; or

(iv) Because the agreement required by paragraph (g) of this section has neither been obtained nor waived, or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of its agreement obtained pursuant to paragraph (g) of this section.

(2) The agency shall not exercise its march-in rights unless the contractor has been provided a reasonable time to present facts and show cause why the proposed agency action should not be taken. The agency shall provide the contractor an opportunity to dispute or appeal the proposed action, in accordance with 27.304-1 (g).

(g) Preference for United States industry . In accordance with 35 U.S.C. 204 , no contractor that receives title to any subject invention and no assignee of the contractor shall grant to any person the exclusive right to use or sell any subject invention in the United States unless that person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States . However, in individual cases, the requirement for this agreement may be waived by the agency upon a showing by the contractor or assignee that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.

(h) Special conditions for nonprofit organizations ’ preference for small business concerns.

(1) Nonprofit organization contractors are expected to use reasonable efforts to attract small business licensees (see paragraph (i)(4) of the clause at 52.227-11 , Patent Rights-Ownership by the Contractor). What constitutes reasonable efforts to attract small business licensees will vary with the circumstances and the nature, duration, and expense of efforts needed to bring the invention to the market.

(2) Small business concerns that believe a nonprofit organization is not meeting its obligations under the clause may report the matter to the Secretary of Commerce. To the extent deemed appropriate, the Secretary of Commerce will undertake informal investigation of the matter, and may discuss or negotiate with the nonprofit organization ways to improve its efforts to meet its obligations under the clause. However, in no event will the Secretary of Commerce intervene in ongoing negotiations or contractor decisions concerning the licensing of a specific subject invention . These investigations, discussions, and negotiations involving the Secretary of Commerce will be in coordination with other interested agencies, including the Small Business Administration. In the case of a contract for the operation of a Government-owned, contractor-operated research or production facility, the Secretary of Commerce will coordinate with the agency responsible for the facility prior to any discussions or negotiations with the contractor.

(i) Minimum rights to contractor.

(1) When the Government acquires title to a subject invention , the contractor is normally granted a revocable, nonexclusive, paid-up license to that subject invention throughout the world. The contractor’s license extends to any of its domestic subsidiaries and affiliates within the corporate structure of which the contractor is a part and includes the right to grant sublicenses to the extent the contractor was legally obligated to do so at the time of contract award. The contracting officer shall approve or disapprove, in writing , any contractor request to transfer its licenses. No approval is necessary when the transfer is to the successor of that part of the contractor’s business to which the subject invention pertains.

(2) In response to a third party’s proper application for an exclusive license, the contractor’s domestic license may be revoked or modified to the extent necessary to achieve expeditious practical application of the subject invention . The application shall be submitted in accordance with the applicable provisions in 37 CFR part 404 and agency licensing regulations. The contractor’s license will not be revoked in that field of use or the geographical areas in which the contractor has achieved practical application and continues to make the benefits of the subject invention reasonably accessible to the public. The license in any foreign country may be revoked or modified to the extent the contractor, its licensees, or its domestic subsidiaries or affiliates have failed to achieve practical application in that country. (See the procedures at 27.304-1 (f).)

(j) Confidentiality of inventions . Publishing information concerning an invention before a patent application is filed on a subject invention may create a bar to a valid patent. To avoid this bar, agencies may withhold information from the public that discloses any invention in which the Government owns or may own a right, title, or interest (including a nonexclusive license) (see 35 U.S.C. 205 and 37 CFR part 401 ). Agencies may only withhold information concerning inventions for a reasonable time in order for a patent application to be filed. Once filed in any patent office, agencies are not required to release copies of any document that is a part of a patent application for those subject inventions . (See also 27.305-4 .)

27.303 Contract clauses.

(1) Insert a patent rights clause in all solicitations and contracts for experimental, developmental, or research work as prescribed in this section.

(2) This section also applies to solicitations or contracts for construction work or architect-engineer services that include-

(i) Experimental, developmental, or research work;

(ii) Test and evaluation studies; or

(iii) The design of a Government facility that may involve novel structures, machines, products , materials, processes, or equipment (including construction equipment).

(3) The contracting officer shall not include a patent rights clause in solicitations or contracts for construction work or architect-engineer services that call for or can be expected to involve only "standard types of construction " "Standard types of construction " are those involving previously developed equipment, methods, and processes and in which the distinctive features include only-

(i) Variations in size, shape, or capacity of conventional structures; or

(ii) Purely artistic or aesthetic (as distinguished from functionally significant) architectural configurations and designs of both structural and nonstructural members or groupings, whether or not they qualify for design patent protection.

(1) Unless an alternative patent rights clause is used in accordance with paragraph (c), (d), or (e) of this section, insert the clause at 52.227-11 , Patent Rights-Ownership by the Contractor.

(2) To the extent the information is not required elsewhere in the contract, and unless otherwise specified by agency supplemental regulations, the contracting officer may modify 52.227-11 (e) or otherwise supplement the clause to require the contractor to do one or more of the following:

(i) Provide periodic (but not more frequently than annually) listings of all subject inventions required to be disclosed during the period covered by the report.

(ii) Provide a report prior to the closeout of the contract listing all subject inventions or stating that there were none.

(iii) Provide the filing date, serial number, title, patent number and issue date for any patent application filed on any subject invention in any country or, upon request, copies of any patent application so identified.

(iv) Furnish the Government an irrevocable power to inspect and make copies of the patent application file when a Government employee is a co-inventor.

(3) Use the clause with its Alternate I if the Government must grant a foreign government a sublicense in subject inventions pursuant to a specified treaty or executive agreement. The contracting officer may modify Alternate I, if the agency head determines, at contract award, that it would be in the national interest to sublicense foreign governments or international organizations pursuant to any existing or future treaty or agreement. When necessary to effectuate a treaty or agreement, Alternate I may be appropriately modified.

(4) Use the clause with its Alternate II in contracts that may be affected by existing or future treaties or agreements.

(5) Use the clause with its Alternate III in contracts with nonprofit organizations for the operation of a Government-owned facility.

(6) If the contract is for the operation of a Government-owned facility, the contracting officer may use the clause with its Alternate IV.

(7) If the contract is for the performance of services at a Government owned and operated laboratory or at a Government owned and contractor operated laboratory directed by the Government to fulfill the Government’s obligations under a Cooperative Research and Development Agreement (CRADA) authorized by 15 U.S.C. 3710a , the contracting officer may use the clause with its Alternate V. Since this provision is considered an exercise of an agency’s "exceptional circumstances" authority, the contracting officer must comply with 37 CFR 401.3(e) and 401.4.

(c) Insert a patent rights clause in accordance with the procedures at 27.304-2 if the solicitation or contract is being placed on behalf of another Government agency.

(d) Insert a patent rights clause in accordance with agency procedures if the solicitation or contract is for DoD, DOE, or NASA, and the contractor is other than a small business concern or nonprofit organization .

(1) Except as provided in paragraph (e)(2) of this section, and after compliance with the applicable procedures in 27.304-1 (b), the contracting officer may insert the clause at 52.227-13 , Patent Rights-Ownership by the Government, or a clause prescribed by agency supplemental regulations, if-

(i) The contractor is not located in the United States or does not have a place of business located in the United States or is subject to the control of a foreign government;

(ii) There are exceptional circumstances and the agency head determines that restriction or elimination of the right to retain title to any subject invention will better promote the policy and objectives of chapter 18 of title 35 of the United States Code;

(iii) A Government authority that is authorized by statute or executive order to conduct foreign intelligence or counterintelligence activities, determines that restriction or elimination of the right to retain any subject invention is necessary to protect the security of such activities; or

(iv) The contract includes the operation of a Government-owned, contractor-operated facility of DOE primarily dedicated to that Department’s naval nuclear propulsion or weapons related programs.

(2) If an agency exercises the exceptions at paragraph (e)(1)(ii) or (iii) of this section in a contract with a small business concern or a nonprofit organization , the contracting officer shall use the clause at 52.227-11 with only those modifications necessary to address the exceptional circumstances and shall include in the modified clause greater rights determinations procedures equivalent to those at 52.227-13 (b)(2).

(3) When using the clause at 52.227-13 , Patent Rights-Ownership by the Government, the contracting officer may supplement the clause to require the contractor to-

(i) Furnish a copy of each subcontract containing a patent rights clause (but if a copy of a subcontract is furnished under another clause, a duplicate shall not be requested under the patent rights clause);

(ii) Submit interim and final invention reports listing subject inventions and notifying the contracting officer of all subcontracts awarded for experimental, developmental, or research work;

(iii) Provide the filing date, serial number, title, patent number, and issue date for any patent application filed on any subject invention in any country or, upon specific request, copies of any patent application so identified; and

(iv) Submit periodic reports on the utilization of a subject invention .

(4) Use the clause at 52.227-13 with its Alternate I if-

(i) The Government must grant a foreign government a sublicense in subject inventions pursuant to a treaty or executive agreement; or

(ii) The agency head determines, at contract award, that it would be in the national interest to sublicense foreign governments or international organizations pursuant to any existing or future treaty or agreement. If other rights are necessary to effectuate any treaty or agreement, Alternate I may be appropriately modified.

(5) Use the clause at 52.227-13 with its Alternate II in the contract when necessary to effectuate an existing or future treaty or agreement.

27.304 Procedures.

27.304-1 general..

(a) Status as small business concern or nonprofit organization . If an agency has reason to question the size or nonprofit status of the prospective contractor, the agency may require the prospective contractor to furnish evidence of its nonprofit status or may file a size protest in accordance with FAR 19.302 .

(b) Exceptions.

(1) Before using any of the exceptions under 27.303 (e)(1) in a contract with a small business concern or a nonprofit organization and before using the exception of 27.303 (e)(1)(ii) for any contractor, the agency shall follow the applicable procedures at 37 CFR 401 .

(2) A small business concern or nonprofit organization is entitled to an administrative review of the use of the exceptions at 27.303 (e)(1)(i) through (e)(1)(iv) in accordance with agency procedures and 37 CFR part 401 .

(c) Greater rights determinations . Whenever the contract contains the clause at 52.227-13 , Patent Rights-Ownership by the Government, or a patent rights clause modified pursuant to 27.303 (e)(2), the contractor (or an employee-inventor of the contractor after consultation with the contractor) may request greater rights to an identified invention within the period specified in the clause. The contracting officer may grant requests for greater rights if the contracting officer determines that the interests of the United States and the general public will be better served. In making these determinations, the contracting officer shall consider at least the following objectives (see 37 CFR 401.3(b) and 401.15):

(1) Promoting the utilization of inventions arising from federally supported research and development.

(2) Ensuring that inventions are used in a manner to promote full and open competition and free enterprise without unduly encumbering future research and discovery.

(3) Promoting public availability of inventions made in the United States by United States industry and labor.

(4) Ensuring that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions.

(d) Retention of rights by inventor . If the contractor elects not to retain title to a subject invention , the agency may consider and, after consultation with the contractor, grant requests for retention of rights by the inventor. Retention of rights by the inventor will be subject to the conditions in paragraphs (d) (except paragraph (d)(1)(i)), (e)(4), (f), (g), and (h) of the clause at 52.227-11 , Patent Rights-Ownership by the Contractor.

(e) Government assignment to contractor of rights in Government employees’ inventions . When a Government employee is a co-inventor of an invention made under a contract with a small business concern or nonprofit organization , the agency employing the co-inventor may license or assign whatever rights it may acquire in the subject invention from its employee to the contractor, subject at least to the conditions of 35 U.S.C. 202 -204.

(f) Revocation or modification of contractor’s minimum rights . Before revoking or modifying the contractor’s license in accordance with 27.302 (i)(2), the contracting officer shall furnish the contractor a written notice of intention to revoke or modify the license. The agency shall allow the contractor at least 30 days (or another time as may be authorized for good cause by the contracting officer ) after the notice to show cause why the license should not be revoked or modified. The contractor has the right to appeal, in accordance with applicable regulations in 37 CFR part 404 and agency licensing regulations, any decisions concerning the revocation or modification.

(g) Exercise of march-in rights . When exercising march-in rights, agencies shall follow the procedures set forth in 37 CFR 401.6 .

(h) Licenses and assignments under contracts with nonprofit organizations . If the contractor is a nonprofit organization , paragraph (i) of the clause at 52.227-11 provides that certain contractor actions require agency approval.

27.304-2 Contracts placed by or for other Government agencies.

The following procedures apply unless an interagency agreement provides otherwise:

(a) When a Government agency requests another Government agency to award a contract on its behalf, the request should explain any special circumstances surrounding the contract and specify the patent rights clause to be used. The clause should be selected and modified, if necessary, in accordance with the policies and procedures of this subpart. If, however, the request states that a clause of the requesting agency is required ( e.g. , because of statutory requirements, a deviation, or exceptional circumstances), the awarding agency shall use that clause rather than those of this subpart.

(1) If the request states that an agency clause is required and the work to be performed under the contract is not severable and is funded wholly or in part by the requesting agency , then include the requesting agency clause and no other patent rights clause in the contract.

(2) If the request states that an agency clause is required, and the work to be performed under the contract is severable, then the contracting officer shall assure that the requesting agency clause applies only to that severable portion of the work and that the work for the awarding agency is subject to the appropriate patent rights clause.

(3) If the request states that a requesting agency clause is not required in any resulting contract, the awarding agency shall use the appropriate patent rights clause, if any.

(b) Any action requiring an agency determination, report, or deviation involved in the use of the requesting agency ’s clause is the responsibility of the requesting agency unless the agencies agree otherwise. However, the awarding agency may not alter the requesting agency ’s clause without prior approval of the requesting agency .

(c) The requesting agency may require, and provide instructions regarding, the forwarding or handling of any invention disclosures or other reporting requirements of the specified clauses. Normally, the requesting agency is responsible for the administration of any subject inventions . This responsibility shall be established in advance of awarding any contracts.

27.304-3 Subcontracts.

(a) The policies and procedures in this subpart apply to all subcontracts at any tier.

(b) Whenever a prime contractor or a subcontractor considers including a particular clause in a subcontract to be inappropriate or a subcontractor refuses to accept the clause, the contracting officer , in consultation with counsel, shall resolve the matter.

(c) It is Government policy that contractors shall not use their ability to award subcontracts as economic leverage to acquire rights for themselves in inventions resulting from subcontracts.

27.304-4 Appeals.

(a) The designated agency official shall provide the contractor with a written statement of the basis, including any relevant facts, for taking any of the following actions:

(1) A refusal to grant an extension to the invention disclosure period under paragraph (c)(4) of the clause at 52.227-11 ;

(2) A demand for a conveyance of title to the Government under 27.302 (d)(1)(i) and (ii);

(3) A refusal to grant a waiver under 27.302 (g), Preference for United States industry; or

(4) A refusal to approve an assignment under 27.304-1 (h).

(b) Each agency may establish and publish procedures under which any of these actions may be appealed. These appeal procedures should include administrative due process procedures and standards for fact-finding. The resolution of any appeal shall consider both the factual and legal basis for the action and its consistency with the policy and objectives of 35 U.S.C. 200 - 206 and 2 10.

(c) To the extent that any of the actions described in paragraph (a) of this section are subject to appeal under the Contract Disputes statute, the procedures under that statute will satisfy the requirements of paragraph (b).

27.305 Administration of patent rights clauses.

27.305-1 goals..

(a) Contracts having a patent rights clause should be so administered that-

(1) Inventions are identified, disclosed, and reported as required by the contract, and elections are made ;

(2) The rights of the Government in subject inventions are established;

(3) When patent protection is appropriate, patent applications are timely filed and prosecuted by contractors or by the Government;

(4) The rights of the Government in filed patent applications are documented by formal instruments such as licenses or assignments; and

(5) Expeditious commercial utilization of subject inventions is achieved.

(b) If a subject invention is made under a contract funded by more than one agency, at the request of the contractor or on their own initiative, the agencies shall designate one agency as responsible for administration of the rights of the Government in the invention.

27.305-2 Administration by the Government.

(a) Agencies should establish and maintain appropriate follow-up procedures to protect the Government’s interest and to check that subject inventions are identified and disclosed, and when appropriate, patent applications are filed, and that the Government’s rights therein are established and protected. Follow-up activities for contracts that include a clause referenced in 27.304-2 should be coordinated with the appropriate agency.

(1) The contracting officer administering the contract (or other representative specifically designated in the contract for this purpose) is responsible for receiving invention disclosures, reports, confirmatory instruments, notices, requests, and other documents and information submitted by the contractor pursuant to a patent rights clause.

(i) For other than confirmatory instruments, if the contractor fails to furnish documents or information as called for by the clause within the time required, the contracting officer shall promptly request the contractor to supply the required documents or information. If the failure persists, the contracting officer shall take appropriate action to secure compliance.

(ii) If the contractor does not furnish confirmatory instruments within 6 months after filing each patent application, or within 6 months after submitting the invention disclosure if the application has been previously filed, the contracting officer shall request the contractor to supply the required documents.

(2) The contracting officer shall promptly furnish all invention disclosures, reports, confirmatory instruments, notices, requests, and other documents and information relating to patent rights clauses to legal counsel.

(c) Contracting activities should establish appropriate procedures to detect and correct failures by the contractor to comply with its obligations under the patent rights clauses, such as failures to disclose and report subject inventions , both during and after contract performance. Government effort to review and correct contractor compliance with its patent rights obligations should be directed primarily toward contracts that are more likely to result in subject inventions significant in number or quality. These contracts include contracts of a research, developmental, or experimental nature; contracts of a large dollar amount; and any other contracts when there is reason to believe the contractor may not be complying with its contractual obligations. Other contracts may be reviewed using a spot-check method, as feasible. Appropriate follow-up procedures and activities may include the investigation or review of selected contracts or contractors by those qualified in patent and technical matters to detect failures to comply with contract obligations.

(d) Follow-up activities should include, where appropriate, use of Government patent personnel-

(1) To interview agency technical personnel to identify novel developments made in contracts;

(2) To review technical reports submitted by contractors with cognizant agency technical personnel;

(3) To check the Official Gazette of the United States Patent and Trademark Office and other sources for patents issued to the contractor in fields related to its Government contracts; and

(4) To have cognizant Government personnel interview contractor personnel regarding work under the contract involved, observe the work on site, and inspect laboratory notebooks and other records of the contractor related to work under the contract.

(e) If a contractor or subcontractor does not have a clear understanding of its obligations under the clause, or its procedures for complying with the clause are deficient, the contracting officer should explain to the contractor its obligations. The withholding of payments provision (if any) of the patent rights clause may be invoked if the contractor fails to meet the obligations required by the patents rights clause. Significant or repeated failures by a contractor to comply with the patent rights obligation in its contracts shall be documented and made a part of the general file (see 4.801 (c)(3)).

27.305-3 Securing invention rights acquired by the Government.

(a) Agencies are responsible for implementing procedures necessary to protect the Government’s interest in subject inventions . When the Government acquires the entire right, title, and interest in an invention by contract, the chain of title from the inventor to the Government shall be clearly established. This is normally accomplished by an assignment either from each inventor to the contractor and from the contractor to the Government, or from the inventor to the Government with the consent of the contractor. When the Government’s rights are limited to a license, there should be a confirmatory instrument to that effect.

(b) Agencies may , by supplemental instructions, develop suitable assignments, licenses, and other papers evidencing any rights of the Government in patents or patents applications. These instruments should be recorded in the U.S. Patent and Trademark Office (see Executive Order 9424, Establishing in the United States Patent Office a Register of Government Interests in Patents and Applications for Patents, (February 18, 1944).

27.305-4 Protection of invention disclosures.

(a) The Government will, to the extent authorized by 35 U.S.C. 205 , withhold from disclosure to the public any invention disclosures reported under the patent rights clauses of 52.227-11 or 52.227-13 for a reasonable time in order for patent applications to be filed. The Government will follow the policy in 27.302 (j) regarding protection of confidentiality.

(b) The Government should also use reasonable efforts to withhold from disclosure to the public for a reasonable time other information disclosing a subject invention . This information includes any data delivered pursuant to contract requirements provided that the contractor notifies the agency as to the identity of the data and the subject invention to which it relates at the time of delivery of the data. This notification shall be provided to both the contracting officer and to any patent representative to which the invention is reported, if other than the contracting officer .

(c) For more information on protection of invention disclosures, also see 37 CFR 401.13 .

27.306 Licensing background patent rights to third parties.

(a) A contract with a small business concern or nonprofit organization shall not contain a provision allowing the Government to require the licensing to third parties of inventions owned by the contractor that are not subject inventions unless the agency head has approved and signed a written justification in accordance with paragraph (b) of this section. The agency head may not delegate this authority and may exercise the authority only if it is determined that the-

(1) Use of the invention by others is necessary for the practice of a subject invention or for the use of a work object of the contract; and

(2) Action is necessary to achieve the practical application of the subject invention or work object.

(b) Any determination will be on the record after an opportunity for a hearing, and the agency shall notify the contractor of the determination by certified or registered mail. The notification shall include a statement that the contractor must bring any action for judicial review of the determination within 60 days after the notification.

Definitions

FAC Changes

Style Formatter

• Data Initiatives
• Regulations
• Smart Matrix
• Regulations Search
• Acquisition Regulation Comparator (ARC)
• Large Agencies
• Small Agencies
• CAOC History
• CAOC Charter
• Civilian Agency Acquisition Council (CAAC)
• Federal Acquisition Regulatory Council
• Interagency Suspension and Debarment Committee (ISDC)

ACQUISITION.GOV

An official website of the General Services Administration