Agreements relating to patents / patent applications Stefano John NAIP Education & Training Group / European Patent Attorney
Patents and patent applications are a combination of legal rights. The most important legal right is that of a monopoly right, but that is only for a specific country or collection of countries and only once a patent application has been granted and satisfies specific patentability requirements. An example of another legal right that is not so well known is that filing a patent application claiming the invention for the first time gives the “applicant” (be it an inventor or his successor in title) the right to file for the same patent protection in other countries.
As with other intellectual property rights, they are known as “intangible assets” because the legal rights they confer on the applicant can be treated as assets: they can be assigned (analogy to being sold) or licensed (a loose analogy is rented) or even used as collateral (mortgage). Such treatment is achieved by drafting agreements proving transfer of such assets.
However, to benefit from transferring such assets, one needs to draft these agreements in a manner which recognizes certain legal rules that support their value. These agreements may be further complicated by the fact that the legal right applies to a business environment that can be compartmentalized within very specific domains, such as across markets or national borders or even apply over the entire world. For example, the rules regarding who is entitled to an invention vary from Europe, where the person who believes he has earned the right to the invention (through for example paying for the research) is allowed to file the patent. In the US on the other hand, the rule is that the invention must be filed in the name of the inventor and then assigned after that date. Hence, not taking account of such differences may lead to problems with maintaining valid patent rights acquired via an agreement in either the US or Europe.
Further, the patent legal right is something that derives its right from developing technology at a specific time – the filing date. Its monopoly right may exist for up to 20 years from then, leading to the necessity of taking into account future economic plans and/or future technological developments. That is why agreements regarding such legal rights may include obligations on future developments of rights which do not exist at the time of drafting the agreement. This could nonetheless be problematic because such rules may be seen as an abuse of the monopoly right by covering an entire field of technology with one patent and that may be seen as falling foul of anti-trust rules which would invalidate such an agreement.
The above shows why it is very important to use legal experts in preparing such agreements to be confident of obtaining the most of an acquired patent/patent application right and not falling foul of certain dangers. It is also important for the business to define its present and future goals so that the legal expert can incorporate them as well as possible in the document. However such legal expertise is not always available at the time an agreement may be made. In such cases, please find a list of few essential issues which should always be inserted in any agreement.
The agreement should contain a description of the legal right being treated as an asset. This could be identified simply by patent number or, depending on the case, by a more generic definition, such as “intellectual property assets belonging to X”. Obviously, for the agreement to have a legal value, the asset must obtain consideration and therefore the consideration should also be mentioned in the agreement. This is generally money. In many cases, such consideration can even be nominal (say 1NTD), where the agreement is only a necessary formality.
The agreement should be signed and dated by the proprietor of the right. Being an exclusive right, it is his right to give away and that is why it is important for his dated signature be present, thus proving his acceptance of the agreement. For the same reason, it makes sense that such a proprietor identifies himself/herself/itself as the same person who the relative patent office recognizes as owner of that right. The party who receives the right is assumed to accept such rights willingly.
The dating of the agreement should follow some logical rules – they cannot confer rights which have already passed. For example, a right to priority cannot be assigned to another at date later than when the priority right exists (12 months from first filing in most cases), because after that date, the right to priority is lost and cannot then be given after, even though the parties may both benefit from it (to salvage a patent application by adding somebody else’s priority).
Patent and patent application rights may be owned by more than one entity as their proprietor. This means that an agreement transferring such rights has to receive the consent of all the parties who are owners to be able to practice the monopoly right of the patent/patent application. One cannot obtain, through an agreement, a percentage of the right to use such rights – either one has it or one does not. Hence the agreement should be signed by all proprietors of such a right.
Be wary that patent rights are given to the patent owner by the State through the patent office and this requires the constant interaction between the patent office and patent proprietor.
As a result many countries’ legal systems demand that the patent offices be informed of such agreements. For example, furnishing a copy of the agreement may be necessary (though confidential parts may be removed) to a patent office to prove the transfer.
The above are only some guiding examples to consider at the time an agreement is made. Most agreements are much more complicated and require much more thought in drafting the agreement before the actual date of transfer. It is always advised to seek legal expertise for such situations so as to avoid possible problems.
Author:
Stefano John, European Patent Attorney
Experiences:
European Patent Attorney, Bryers
Trainee European Patent Attorney, Bugnion SpA
Trainee European Patent Attorney, Notabartolo & Gervasi
Internship, EPO