BASICS: Although an assignment must be in writing, 35 U.S.C. § 261, ownership can be transferred by other means not requiring a writing, such as through intestate succession laws. Sky Tech. (Fed. Cir. 08/20/09); seeVapor Point (Fed. Cir. 08/10/16) (O’Malley, J., Concurring) (recommending court overrule precedent suggesting in-writing requirement can be superseded under state law). Exclusive license with right to sue need not be in writing. Bard Peripheral III (Fed. Cir. 01/13/15). Written assignment or document memorializing prior assignment must be made pre-suit. Bard Peripheral III (Fed. Cir. 01/13/15). Post-complaint “nunc pro tunc assignments are not sufficient to confer retroactive standing” under Sec. 281, even if preceded supplemental or amended complaint. Alps South (Fed. Cir. 06/05/15) (although patent owner can be added post-complaint to cure standing defect); but seeSealant (Fed. Cir. 06/11/15) (non-precedential) (standing is claim-by-claim and need exist at time claim first made in the action).
Must Convey Undivided Interest Or Exclusive Patent Right To Constitute Assignment: “‘To create an assignment, a contract must transfer: (1) the entire exclusive patent right, (2) an undivided interest in the patent rights, or (3) the entire exclusive right within any geographical region of the United States.’” Diamond Coating (Fed. Cir. 05/17/16) (no assignment of all substantial rights where original patent owner retains a right to make, use and sell patented products, plaintiff’s rights to license or enforce are restricted, and plaintiff did not obtain right to practice the patent).
“Hereby Grants” (Present Tense Active Verbs) Conveys Legal Title; “Agrees To Assign” (Passive Verbs In Indefinite Or Future Tense) Conveys Only Equitable Title: A party with legal title to a patent has standing to sue even if it may not have equitable title and, conversely, a party with equitable title but no legal title lacks standing. The issue normally arises where someone agrees to assign patent rights in future inventions, but fails to actually assign them. If one uses “does hereby grant [or “assign”]” (rights in any future inventions to the assignee) language, then legal title will pass by operation of law once the invention comes into existence. SeeStanford (Fed. Cir. 09/30/09) (where inventor first entered an “agree to assign” contract with Stanford giving it equitable rights in future inventions, but then inventor entered a “hereby assign” contract with defendant’s predecessor in interest, and then made invention and application was filed, legal title automatically transferred to that predecessor upon filing of the application, so legal title was in defendant when inventor later assigned rights to Stanford; and Stanford not “bona fide purchaser as it had constructive notice of the “hereby assign” contract), aff’d on other grounds, Bd. of Tr. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc. (U.S. 06/06/2011) (but two Justices question Fed. Cir. distinction between “agree to assign” and “hereby assign”); Omni Medsci (Fed. Cir. 08/02/21) (2-1) (aff’g denial of R. 12(b)(1) mtn. for lack of standing; bylaws’ provision that certain patents “shall be the property of the University” did not “automatically and presently assign legal title” to the inventions, in part because does not use present-tense active verbs); Preston (Fed. Cir. 07/10/12) (aff’g Summ. J. of no standing because plaintiff employee’s employment agreement automatically assigned (“does hereby assign” any invention conceived or made while employed) patent rights to employer (the defendant)); Advanced Video II (Fed. Cir. 01/11/18) (2-1) (aff’g dismissal of complaint for lack of standing: “will assign” provision in employment agreement was a mere promise to assign to employer (putative predecessor in interest to plaintiff)); Filmtec (Fed. Cir. 07/22/91) (vacating preliminary injunction in view of serious doubts re who has title to patent; an assignment of rights in an invention made prior to the existence of the invention is an assignment of an expectant interest conveying equitable title to the assignee which, “once the invention is made and an application for patent is filed,” conveys legal title to the assignee and the assignor has nothing left to assign). But, “will be assigned” or “agree to assign” language transfers only equitable title, not legal title. Speedplay (Fed. Cir. 03/01/00) (aff’g plaintiff obtained substantially all rights in patent from the inventor via a “hereby … assigns” provision); SiRF Tech. (Fed. Cir. 04/12/10) (aff’g that petitioner in ITC had standing, because respondent failed to show that invention fell within scope of one inventor’s automatic assignment to another company; recording in PTO an assignment from inventor to the plaintiff shifts burden of proof (production?) to challenger to challenge that assignment by, e.g., proving earlier assignment by inventor to another company); Abraxis (Fed. Cir. 11/09/10) (plaintiff lacked standing when complaint was filed because promise to assign was not present assignment, and attempt to cure retroactively failed), rehearing en bancdenied (Fed. Cir. 03/14/11); Gellman (Fed. Cir. 11/30/11) (non-precedential) (“this court has consistently required that present assignments of future rights expressly undertake the assigning act at the time of the agreement, and not leave it to some future date”).
Transfer Of Ownership Of Software Developed Does Not Necessarily Assign Patent Rights: A software development contract giving company exclusive rights to the software does not necessarily grant ownership rights in any patentable methods or systems invented in creating such software. James (Fed. Cir. 04/20/18) (rev’g dismissal of suit for correction of inventorship for lack of standing; if plaintiff proves sole inventorship then he may own the patents).
Bayh-Dole Act Does Not Assign Inventors’ Rights To Their Federally Funded Employers: It is a “basic principle of patent law that inventors own their inventions.” Bayh-Dole Act does not deprive inventors of their interest in federally funded inventions. 201(e)’s “any invention of the contractor” does not refer to all inventions of the contractor’s employees, but rather to “those owned by or belonging to the contractor.” “The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.” Bd. of Tr. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc. (U.S. 06/06/2011).
State Law Governs Interpretation Of Contract Purportedly Assigning Invention, But Federal Law Governs Whether Automatic Assignment: Abbott Point (Fed. Cir. 01/13/12) (2-1) (aff’g plaintiff did not own patent or have standing); Intellectual Ventures (Erie Indemnity) (Fed. Cir. 03/07/17) (aff’g dismissal for lack of standing; “whether a patent assignment clause creates an automatic assignment or merely an obligation to assign” is a question of federal law); Schwendimann (Fed. Cir. 05/13/20) (2-1) (aff’g assignment valid, and properly reformed under state law, despite misnaming assignee, in view of other writings showing correct intended assignee; “by virtue of the reformation, the written instrument was corrected nunc pro tunc, to the point of the assignment”).
Termination Upon Failure Of Condition Subsequent Does Not Necessarily Defeat Transfer Being Deemed An Assignment: “An assignment of a patent ‘may be either absolute, or by way of mortgage and liable to be defeated by non-performance of a condition subsequent.” Vaupel (Fed. Cir. 09/13/91) (transfer granted all substantial rights, despite retaining “1) a veto right on sublicensing by Vaupel; 2) the right to obtain patents on the invention in other countries; 3) a reversionary right to the patent in the event of bankruptcy or termination of production by Vaupel; and 4) a right to receive infringement damages.”) But seePropat (Fed. Cir. 01/04/07) (grant did not transfer all substantial rights; the power “to terminate the agreement and end all of Propat’s rights in the patent if Propat fails to perform up to the specified benchmarks, although not dispositive, is yet another indication that Authentix retains a significant ownership interest in the patent”).
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