Written by: Stephen P. Scuderi for the Daily Record
The timing and sufficiency of an assignment document can become critical for protecting the rights of the assignee. These rights include the assignee’s right to sue for infringement, ownership right and right to claim priority.
Right to Sue for Infringement
In the recent case of Diamond Coating v. Hyundai, 823 F. 3d 615 (Fed. Cir. 2016), the court made it clear that anything less than a transfer of the “entire exclusive patent right” runs the risk of the assignee not obtaining “patentee status” and therefore not having standing to sue for infringement under 35 U.S. Code § 281. If less than the entire exclusive right is transferred, than the courts must analyze the agreement to determine if the assignee has obtained all “substantial” rights. If significant restrictions are placed on those rights, than the agreement will be deemed a license and the assignee will not have standing to sue for infringement.
Right of Ownership
Under U.S. law, a patent or patent application “shall be assignable in law by an instrument in writing” (35 U.S. Code § 261). In the U.S., an assignment that is signed by only the assignor is considered a valid assignment.
This is in contrast to Europe, wherein an assignment of a patent must be in writing and “shall require the signature of the parties to the contract” (Article 72 European Patent Convention (EPC)). “Parties” in this case means the assignor and the assignee. Therefore an assignment signed only by the inventor may not be considered valid in some European countries.
Fortunately, validity of an assignment is governed by the laws of the country where the assignment is executed. Therefore, if an assignment is executed and valid in the U.S., it will also be accepted by the European Patent Office. However, for companies with inventors in multiple countries, care must be taken as to the legal requirements for a valid transfer of ownership in the country where the assignment is executed.