A patent is personal property,[1] and can be owned by any person or legal entity, including associations, partnerships, and companies. Because of a peculiarity in the patent laws, in absence of any agreement to the contrary, each of the joint owners of a patent may make, use, or sell the patented invention without the consent of, and without accounting to, the other owners.[2] Thus, it is advisable that the joint owners of a patent (e.g., co-inventors and anyone taking rights from a co-inventor) execute an agreement equitably apportioning the costs of, and profits from, a patent as soon as possible.
Patents, pending applications, and inventions can be freely transferred by assignment. The assignment should be in writing.[3] The assignment of a patent should specifically include the right to sue for and recover for past infringements (if these rights are to be transferred). Assignments should be in writing and should, if possible, be notarized.[4] Moreover, the assignment should be recorded in the U.S. Patent and Trademark Office within three months of execution. If the assignment is not recorded, then the assignee could lose ownership of the patent to a subsequent assignee who took title without notice of the first transfer.[5]
Some or all of the patent rights can also be transferred by license.[6] However, even “simple” licenses require careful preparation to protect the parties and the patent. In particular, there are a number of types of provisions that parties often seek which may constitute patent misuse, making the patent unenforceable, or which may violate the antitrust laws. Moreover, each country imposes its own restrictions and requirements on patent licenses affecting its territory, which must be considered. These restrictions include limitations on royalties, and even requirements that the license be recorded with, or approved by, the government.
[1] 35 U.S.C. §261: “Subject to the provisions of this title, patents shall have the attributes of personal property.”
[2] 35 U.S.C. §262.
[3] 35 U.S.C. §261: “Applications for patent, patents, or any interest therein, shall be assignable in law by an
instrument in writing.”
[4] 35 U.S.C. §261: “A certificate of acknowledgment under the hand and official seal of a person authorized to administer oaths within the United States, or, in a foreign country, of a diplomatic or consular officer of the United States or an officer authorized to administer oaths whose authority is proved by a certificate of a diplomatic or consular officer of the United States, or apostille of an official designated by a foreign country which, by treaty or convention, accords like effect to apostilles of designated officials in the United States, shall be prima facie evidence of the execution of an assignment, grant or conveyance of a patent or application for patent.”
[5] 35 U.S.C. §261: “An assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.”
[6] 35 U.S.C. §261: “The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States.”