what does assignment of patent mean

The basics of patent assignments

What is a patent assignment, what are the requirements to make it valid, and why would a business enter into a patent assignment agreement? Read on to find answers to these questions and more.

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by Cindy DeRuyter, Esq.

Cindy DeRuyter, Esq., has been writing for LegalZoom since 2018. She earned a Juris Doctor from Mitchell Hamline Scho...

Defining Patent Assignment

Requirements to assign a patent, searching for patent assignments.

Assigning patents can be a great way for companies to generate revenue and reduce risks associated with intellectual property ownership. If you are considering entering into a patent assignment agreement, understand that it is irrevocable. Because of that, evaluate proposed terms and provisions carefully before moving forward.

Young coworkers looking at laptops and paperwork on a desk

Here's a high-level overview of how patent assignments work: when a patent's owner or applicant assigns it to another individual or company, the assignor agrees to relinquish their rights to enforce or benefit from it in the future.

You can assign rights for applications still pending with the United States Patent and Trademark Office (USPTO). When the USPTO approves the application, the assignee benefits from and may use and enforce the patent, not the assignor. Companies also assign rights for issued patents, which relieves the assignor of the burden of enforcing their intellectual property and provides a source of revenue.

Patent assignments can be lucrative for both parties. While assignors make money right away, assignees can create revenue streams by earning money from royalty payments. After an assignment is complete, the assignee has exclusive rights to such income.

A patent assignment agreement documents the transfer and arrangement between the parties. If you are considering entering into one, know that you need it to be written—a verbal agreement alone is insufficient.

Don't underestimate the importance of this, either. Without a valid agreement on file with the USPTO, an intended assignor remains legally responsible for the patent and an intended assignee gains none of the rights or benefits.

Here are the requirements for a valid written assignment:

Confirm that the assignor has the full, legal right to make the assignment and that the assignee can legally assume the rights and obligations.
Clearly identify both the assignor and assignee using legal names. If more than one company owns the patent, identify all owners.
Identify the underlying patent by title and number and include a complete and accurate description of it.
Describe the terms of the agreement, including financial arrangements.
All parties must sign the agreement, with limited exceptions in situations where the assignor cannot be reached but where enough evidence exists that documents their intentions and rights.
File the patent assignment with the USPTO within three months after the agreement is signed, paying the then-current fee.

Though the agreement is a legal document, it does not need to be notarized. However, obtaining notarization for the signatures provides added protection, limiting the risk of a party later claiming a signature was not valid.

The USPTO maintains a patent assignment database that includes all the assignments recorded since August 1980. Using the database, you can search with the assignor's or assignee's name, the patent number, application number, publication number, or other identifying information.

Properly assigning patents protects both assignors and assignees. If you want to assign a patent, downloading a patent assignment form can help. Alternatively, you can consult an intellectual property attorney .

Patent Assignment: How to Transfer Ownership of a Patent

By Michael K. Henry, Ph.D.

Intellectual Property
Patent Prosecution

This is the second in a two-part blog series on owning and transferring the rights to a patent. ( Read part one here. )

As we discussed in the first post in this series, patent owners enjoy important legal and commercial benefits: They have the right to exclude others from making, selling, using or importing the claimed invention, and to claim damages from anyone who infringes their patent.

However, a business entity can own a patent only if the inventors have assigned the patent rights to the business entity. So if your employees are creating valuable IP on behalf of your company, it’s important to get the patent assignment right, to ensure that your business is the patent owner.

In this post, we’ll take a closer look at what a patent assignment even is — and the best practices for approaching the process. But remember, assignment (or transfer of ownership) is a function of state law, so there might be some variation by state in how all this gets treated.

What Is a Patent Assignment and Why Does it Matter?

A patent assignment is an agreement where one entity (the “assignor”) transfers all or part of their right, title and interest in a patent or application to another entity (the “assignee”).

In simpler terms, the assignee receives the original owner’s interest and gains the exclusive rights to pursue patent protection (through filing and prosecuting patent applications), and also to license and enforce the patent.

Ideally, your business should own its patents if it wants to enjoy the benefits of the patent rights. But under U.S. law , only an inventor or an assignee can own a patent — and businesses cannot be listed as an inventor. Accordingly, patent assignment is the legal mechanism that transfers ownership from the inventor to your business.

Patent Assignment vs. Licensing

Keep in mind that an assignment is different from a license. The difference is analogous to selling versus renting a house.

In a license agreement, the patent owner (the “licensor”) gives another entity (the “licensee”) permission to use the patented technology, while the patent owner retains ownership. Like a property rental, a patent license contemplates an ongoing relationship between the licensor and licensee.

In a patent assignment, the original owner permanently transfers its ownership to another entity. Like a property sale, a patent assignment is a permanent transfer of legal rights.

U sing Employment Agreements to Transfer Patent Ownership

Before your employees begin developing IP, implement strong hiring policies that ensure your IP rights will be legally enforceable in future.

If you’re bringing on a new employee, have them sign an employment agreement that establishes up front what IP the company owns — typically, anything the employee invents while under your employment. This part of an employment agreement is often presented as a self-contained document, and referred to as a “Pre-Invention Assignment Agreement” (PIAA).

The employment agreement should include the following provisions:

Advance assignment of any IP created while employed by your company, or using your company’s resources
An obligation to disclose any IP created while employed by your company, or using your company’s resources
An ongoing obligation to provide necessary information and execute documents related to the IP they created while employed, even after their employment ends
An obligation not to disclose confidential information to third parties, including when the employee moves on to a new employer

To track the IP your employees create, encourage your employees to document their contributions by completing invention disclosure records .

But the paperwork can be quite involved, which is why your employment policies should also include incentives to create and disclose valuable IP .

Drafting Agreements for Non-Employees

Some of the innovators working for your business might not have a formal employer-employee relationship with the business. If you don’t make the appropriate arrangements beforehand, this could complicate patent assignments. Keep an eye out for the following staffing arrangements:

Independent contractors: Some inventors may be self-employed, or they may be employed by one of your service providers.
Joint collaborators: Some inventors may be employed by, say, a subsidiary or service company instead of your company.
Anyone who did work through an educational institution : For example, Ph.D. candidates may not be employees of either their sponsoring institution or your company.

In these cases, you can still draft contractor or collaborator agreements using the same terms outlined above. Make sure the individual innovator signs it before beginning any work on behalf of your company.

O btaining Written Assignments for New Patent Applications

In addition to getting signed employment agreements, you should also get a written assignments for each new patent application when it’s filed, in order to memorialize ownership of the specific patent property.

Don’t rely exclusively on the employment agreement to prove ownership:

The employment agreement might contain confidential terms, so you don’t want to record them with the patent office
Because employment agreements are executed before beginning the process of developing the invention, they won’t clearly establish what specific patent applications are being assigned

While you can execute the formal assignment for each patent application after the application has been filed, an inventor or co-inventor who no longer works for the company might refuse to execute the assignment.

As such, we recommend executing the assignment before filing, to show ownership as of the filing date and avoid complications (like getting signatures from estranged inventors).

How to Execute a Written Patent Agreement

Well-executed invention assignments should:

Be in writing: Oral agreements to assign patent rights are typically not enforceable in the United States
Clearly identify all parties: Include the names, addresses, and relationship of the assignor(s) and assignee
Clearly identify the patent being assigned: State the patent or patent application number, title, inventors, and filing date
Be signed by the assignors
Be notarized : If notarization isn’t possible, have one or two witnesses attest to the signatures

Recording a Patent Assignment With the USPTO

Without a recorded assignment with the U.S. patent office, someone else could claim ownership of the issued patent, and you could even lose your rights in the issued patent in some cases.

So the patent owner (the Assignee) should should record the assignment through the USPTO’s Assignment Recordation Branch . They can use the Electronic Patent Assignment System (EPAS) to file a Recordation Cover Sheet along with a copy of the actual patent assignment agreement.

They should submit this paperwork within three months of the assignment’s date. If it’s recorded electronically, the USPTO won’t charge a recordation fee .

Need to check who owns a patent? The USPTO website publicly lists all information about a patent’s current and previous assignments.

When Would I Need to Execute a New Assignment for a Related Application?

You’ll need only one patent assignment per patent application, unless new matter is introduced in a new filing (e.g., in a continuation-in-part , or in a non-provisional application that adds new matter to a provisional application ). In that case, you’ll need an additional assignment to cover the new matter — even if it was developed by the same inventors.

What If an Investor Won’t Sign the Written Assignment?

If you can’t get an inventor to sign an invention assignment, you can still move forward with a patent application — but you’ll need to document your ownership. To document ownership, you can often rely on an employee agreement , company policy , invention disclosure , or other employment-related documentation.

D o I Need to Record My Assignments in Foreign Countries?

Most assignments transfer all rights, title, and interest in all patent rights throughout the world.

But in some countries, the assignment might not be legally effective until the assignment has been recorded in that country — meaning that the assignee can’t enforce the patent rights, or claim damages for any infringement that takes place before the recordation.

And there might be additional formal requirements that aren’t typically required in the United States. For example, some countries might require a transfer between companies to be signed by both parties, and must contain one or both parties’ addresses.

If you’re assigning patents issued by a foreign country, consult a patent attorney in that country to find out what’s required to properly document the transfer of ownership.

N eed Help With Your Patent Assignments?

Crafting robust assignment agreements is essential to ensuring the proper transfer of patent ownership. An experienced patent professional can help you to prepare legally enforceable documentation.

Henry Patent Law Firm has worked with tech businesses of all sizes to execute patent assignments — contact us now to learn more.

GOT A QUESTION? Whether you want to know more about the patent process or think we might be a good fit for your needs – we’d love to hear from you!

Michael K. Henry, Ph.D.

Michael K. Henry, Ph.D., is a principal and the firm’s founding member. He specializes in creating comprehensive, growth-oriented IP strategies for early-stage tech companies.

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