What is Patent Assignment?

Patent assignment refers to the act of transferring ownership of a patent from the original owner to a completely new owner or entity. This amendment of transferring the patient is known as an assignment. This can occur while the patent application is pending or when the patent is fully granted. There are various procedures and modalities involved in patent assignment, and before we get into the details, it is important to understand what patents are, and how lawyers in Perth can help in case of any issues as well as disputes concerning patents.

What is a patent?

Importance of intellectual property can not be ignored. A patent is an intellectual property right that grants exclusivity to an invention or a breakthrough. This exclusivity right enables the patent owner to prevent anyone else from making, recreating, or selling the invention for a designated amount of time before they share an ‘enabling discourse’ on the invention. Hence, a patent is a way of preventing the theft or violation of intellectual property.

Before we discuss the patent assignment further, it is important to familiarize ourselves with legal terminologies that appear frequently with respect to patents:

1. Enabling discourse: In patent law, an enabling discourse, also known as a ‘Sufficiency Of Disclosure,’ is a part of patent law that requires the inventor to reveal details about the claimed invention so that it can be carried out by a person skilled in the arts.
2. A person with skills in the art: A ‘person having skills in the art’ is a part of legal fiction, where they represent anyone skilled in a particular field but not a genius. With regard to patents, this refers to any hypothetical or fictional person in the field in which the patent for the claimed invention is being granted. The idea of a person skilled in the art helps gauge the validity of the claimed invention. It helps foster innovations that can be recreated and made available for universal progress.
3. Claimed invention: A claimed invention is the invention, idea, or concept that the patent is for. A claimed invention is generally yet to be fully conceived or proven.

In Australia, the patent system falls under the Patents Act 1990, the origin of which can be traced back to the English Law and Monopolies.

Patent laws mostly fall under private law; however, they can be represented in various sectors according to their use, such as corporate, academic, and more.

How are patents assigned?

Patent assignments are amends made to the ownership of a patented idea, invention, or concept. The assignment or transfer of patent ownership requires all parties to fulfill a Patent Assignment Deed. As a part of this deed, the transfer details are defined, including establishing the assignor and the assignee and their agreements. A valid patent assignment covers the following information:

1. Confirmation of the legal right of the assignor to make the assignment and the authority of the assignee to receive the responsibility and obligations
2. The full identities of the assignor and the assignee. All businesses involved in the assignment must be identified.
3. Identify the original patent by its name, number, and detailed description.
4. Detailed outline of the monetary or financial arrangements associated with the assignment.
5. The signature of all the parties involved. In some exceptional cases, the assignor may not have to sign the agreement if their intentions and consent are explicitly clear.
6. Notarize the assignment for added protection.

The above information must be compiled in three main documents:

1. The deed of assignment
2. The document of merger
3. A dead letter from the assignor asking to transfer the patent ownership.

The Commissioner of Patents must be informed about the assignment through the form “Request to Amend Ownership Details of an Application or Patent.” The current owners or assignors should then sign and date the above documents. The act of meaning patent ownership has no fee.

What are the benefits of patent assignment?

There are various reasons why people choose to assign patents. Often, the unpredictability of a claimed invention can be too much for smaller businesses to incur in case the invention fails. This can lead to immense monetary loss if the patent doesn’t fetch financial benefits in the long run. As a result, selling the rights of the patent can be a viable option. Some of the prominent benefits of patent assignment are briefly discussed ahead:

1. Assignments offer a lump sum: While assigning a patent relinquishes the assignor from all future royalties that the claimed invention may bring, the assignee, in turn, has to pay the assignor a lump sum upfront for the acquisition. While this may seem like a loss, it is a valid and viable way of mitigating the risk of the invention failing. The financial blow of a failed invention can sometimes be greater than the loss of long-term royalties, especially when the assignor receives a lump sum payment of their named price.
2. Start-up launch: Corporate start-ups often prefer patent assignment to licensing. This is because ownership of a patent aids in marketability. Many companies are willing to pay large prices to build their pool of assigned patents, which can make selling patents profitable.
3. Risk management: Companies often assign patents in order to reduce the costs of upholding the obligations of intellectual property and mitigate the risk of losses incurred by a failed invention. As a result, this becomes a way to generate revenue and prevent losses.
4. During business mergers: Transferring patents is an integral part of business mergers, which requires redistributing ownership and intellectual property rights among the concerned parties.

Main Takeaways

The key points in this article establish the following:

1. Patents are a part of intellectual property rights owned by an individual or entity that can be transferred to another individual or entity. The transference of ownership is called assignment.
2. Amendment of patent ownership can financially benefit individuals and businesses and is crucial for risk management regarding potential inventions.
3. Amendments to ownership of patents essentially include going through the Commissioner of Patents.
4. Patent transfer requires the explicit consent of both the assignor and the assignee, with the latter paying a lump sum for the patent sale.

Parting Words

Preserving intellectual property rights is the primary way of preventing the theft of ideas and inventions that can become the beacons of innovation in the future. Hence, consulting intellectual property lawyers before attempting assignments can prevent major mistakes and oversights in the details. Contact our team of the best patent lawyers in Perth for legal guidance.

Alternatively, find our suggestions on corporate lawyers to aid in intellectual property rights transfers for start-ups, business mergers, and marketing guidance.