Intellectual property is a valuable asset for any company. You must secure its ownership, whether purchasing a patent (exclusive rights to make, use or sell an agreement) from another inventor or ensuring you own an invention developed by a contractor or an employee. A patent assignment agreement is a permanent way to transfer this ownership. If you are looking to draft a patent assignment agreement, a patent lawyer from Priori Legal's vetted network of attorneys can help protect your interests.
Understanding Patent Assignment
When you invent a new technology, you have the right to file for a patent on that technology with the United States Patent and Trademark Office (USPTO), which gives you the exclusive rights to make, use, offer for sale, sell, export, or import that invention in the United States. This right remains with the first inventor to file, regardless of who else may have had a claim in developing the technology. Of course, not everyone has an interest in using these rights. Some inventors may choose to sell ownership of all or some rights to a third party through patent assignment. This is done by signing a patent assignment agreement which transfers ownership of these rights.
When a Patent Assignment Agreement Is Necessary
When you choose to assign the rights to an invention over to another party, this must be done through a formal patent assignment agreement. Unlike some contracts, patent assignment agreements cannot be oral or casually written out. A formal contract must be drawn up.
Of course, when a company wants to buy the full permanent rights for a patent, a patent assignment agreement is vital, but any time that a company wants to secure patent rights to an invention they commissioned, a patent assignment agreement can also be used. These are therefore common within independent contractor agreements. Additionally, some companies have employees sign patent assignment agreements as a condition of employment to secure and strengthen the work-for-hire doctrine.
Key Provisions of a Patent Assignment Agreement
A patent assignment agreement is generally a fairly straightforward contract, but it requires several key provisions in order to be both valid and effective. The following are some key provisions that should be addressed in your patent assignment agreement.
Fee and Payment. In order for a patent assignment agreement to be valid, there must be consideration or payment. It must be specified and paid at signing, even if at the time of employment.
Assignment. There must be a formal cause saying exactly what will be assigned and when assignment transfers.
Patent Rights and Definitions. The exact patent to be transferred must be specified and fully defined as it is registered in the USPTO filing.
Further Assistance. If the original patent owner must help transition ownership or use of the patent, a further assistance clause will specify how and for how long.
Warranties and Indemnities. Most patents are transferred as-is, but some patent assignment agreements have warranties and indemnities to protect the parties involved.
Notarization. For a patent assignment agreement to be valid in the U.S., it must be notarized—or at least signed in front of two witnesses.
Patent Assignment vs. Licensing
Practically, patent assignment is very similar to patent licensing, especially exclusive licenses. Both transfer patent rights to another person or company. While licenses are temporary, however, assignment is permanent. Licensing patent rights is like renting property. Royalties are collected over time, but ownership does not transfer. Patent assignment agreements permanently transfer ownership. You can review and download a free template Patent Assignment Agreement or Patent License Agreement in Priori Legal's Document & Form Learning Center.
How do I record a patent assignment?
Once a patent assignment agreement has been signed, the assignment can be reported to the USPTO using the Electronic Patent Assignment System. This simple process include filling out a Patent Assignment Recordation Coversheet online and attaching the patent assignment agreement for legal documentation. This will be automatically changed then in the system to reflect the new ownership of the patent. To formalize this assignment, however, you must make the assignment of record in the file of the original patent application.
If I hire an independent contractor to create work for my company, do I need to get them to sign a patent assignment agreement?
Unless the original independent contractor agreement contains a clause that assigns the invention created to the hiring organization, they could patent the invention, and your company would have to get that work assigned.
Can I require an employee to sign a patent assignment agreement?
Under work-for-hire doctrine, employees who invent anything during the course of their work duties do not have patent ownership. Instead, the employer is conferred these rights. Still, many employers ensure an added layer of protection by having new employees sign an additional patent assignment agreement at the time of their employment.