Transfer (patent)
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As objects of
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...
or
intangible asset An intangible asset is an asset that lacks physical substance. Examples are patents, copyright, franchises, goodwill, trademarks, and trade names, as well as software. This is in contrast to physical assets (machinery, buildings, etc.) and finan ...
s, patents and
patent application A patent application is a request pending at a patent office for the grant of a patent for an invention described in the patent specification and a set of one or more claims stated in a formal document, including necessary official forms and re ...
s may be transferred. A transfer of
patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...
or patent application can be the result of a
financial transaction A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A ...
, such as an assignment, a
merger Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
, a
takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...
or a
demerger A demerger is a form of corporate restructuring in which the entity's business operations are segregated into one or more components. It is the converse of a merger or acquisition. A demerger can take place through a spin-off by distributed or ...
, or the result of an operation of
law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
, such as in an
inheritance Inheritance is the practice of receiving private property, Title (property), titles, debts, entitlements, Privilege (law), privileges, rights, and Law of obligations, obligations upon the death of an individual. The rules of inheritance differ ...
process, or in a
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
.


Rationale

The rationale behind the transferability of patents and patent applications is that it enables
inventor An invention is a unique or novel device, method, composition, idea or process. An invention may be an improvement upon a machine, product, or process for increasing efficiency or lowering cost. It may also be an entirely new concept. If an ...
s to sell their rights and to let other people manage these intellectual property assets both on the valuation and enforcement fronts. As
The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Econo ...
put it, :"''Patents are transferable assets, and by the early 20th century they had made it possible to separate the person who makes an
invention An invention is a unique or novel device, method, composition, idea or process. An invention may be an improvement upon a machine, product, or process for increasing efficiency or lowering cost. It may also be an entirely new concept. If an i ...
from the one who commercialises it. This recognised the fact that someone who is good at coming up with
idea In common usage and in philosophy, ideas are the results of thought. Also in philosophy, ideas can also be mental representational images of some object. Many philosophers have considered ideas to be a fundamental ontological category of being ...
s is not necessarily the best person to bring those ideas to
market Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an ...
.''"


United States

In the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, assignment of a patent is governed by
statute A statute is a formal written enactment of a legislative authority that governs the legal entities of a city, state, or country by way of consent. Typically, statutes command or prohibit something, or declare policy. Statutes are rules made by le ...
. Assignment of an interest occurs only by an "instrument in writing". The statute also permits recording an assignment with the
United States Patent and Trademark Office The United States Patent and Trademark Office (USPTO) is an agency in the U.S. Department of Commerce that serves as the national patent office and trademark registration authority for the United States. The USPTO's headquarters are in Alexa ...
, but recording is not required except to protect against "any subsequent purchaser or mortgagee for a valuable consideration, without notice...."


Security agreement

A
security agreement A security agreement, in the law of the United States, is a contract that governs the relationship between the parties to a kind of financial transaction known as a secured transaction. In a secured transaction, the Grantor (typically a borrower bu ...
is a conditional transfer of patent ownership when patents are used as
collateral Collateral may refer to: Business and finance * Collateral (finance), a borrower's pledge of specific property to a lender, to secure repayment of a loan * Marketing collateral, in marketing and sales Arts, entertainment, and media * ''Collate ...
for a loan. The borrower will agree to transfer ownership of the patents to the lender if the borrow defaults on the loan. Security agreements on patents in the US are registered with the United States Patent and Trademark Office.Mark Nowotarski, “Getting a Loan with Your Patents”, IP Watchdog, 21 June 2012
/ref>


See also

*
Assignor estoppel The doctrine of assignor estoppel is a doctrine of United States patent law barring a patent's seller (assignor) from attacking the patent's validity in subsequent patent infringement litigation. The doctrine is based on the doctrine of legal estop ...


References

Patent law {{law-term-stub