Patent Assignment Signed By Both Parties Are Nervous About 2016

In the United States, where an inventor must assign ownership of patent rights to his or her employer or another company, he or she signs an assignment document that can be recorded at the United States Patent and Trademark Office. This document is often executed early in the pendency of the application and can control ownership rights of the U.S. application, any later-filed "children" U.S. applications, and foreign applications such as Patent Cooperation Treaty (PCT) applications. However, due to differences between U.S. and European law, the assignment may not be sufficient in Europe—and errors cannot be fixed retroactively.

In Europe, an assignment of a patent application must be in writing and "shall require the signature of the parties to the contract." (Emphasis added.) Thus, according to European law, which was highlighted in a Board of Appeals of the European Patent Office (EPO) on November 14, 2006, both the assignor and the assignee must sign the assignment document. While contract law in the U.S. and in a number of other countries consider a contract signed by the conveying party to be valid for this type of one-way conveyance, this is not true everywhere in Europe. In many parts of Europe, contract law requires that both parties sign for all conveyances. Thus, an assignment signed only by the inventor may not be effective in countries such as Great Britain and France.

Another concern addressed by the assignment document is the claim to priority. In Europe, a patent owner must have actual ownership of a priority right when making claim to it. This priority right is distinct from the ownership right and can be transferred separately. Thus, the transfer of a right to priority must be spelled out in the assignment. If, for example, a PCT application claims priority to an earlier-filed U.S. application, the claim must be made by the identical legal person who filed the earlier priority application or a successor in title. This identity or relationship must be valid at the time the PCT application is filed. Where a U.S. priority document is filed in the name of the inventors and the PCT application is filed in the name of the owner, there must be an assignment from the inventors to the owner prior to the filing of the PCT application. This can be particularly problematic when a provisional application is used as a priority document. The provisional application never becomes a patent and does not need to be assigned. Thus, assignments are often only executed after a non-provisional application is filed. While problems with valid claims to priority should be eased under the America Invents Act (AIA) because U.S. applications can now be filed in the name of the owner instead of the inventor, care should be taken to ascertain a proper right to claim priority particularly if there is any difference in the identity of the applicant.

As a practice tip, practitioners should make sure all assignments are signed and dated before the PCT filing date and are signed by both the assignee and assignor. If this cannot be done, or if the right to claim priority is at all uncertain, practitioners should file the PCT application in the name of the "person" who filed the priority application and provide any correction later. Practitioners should also make sure that the assignment specifies the priority application(s) with particularity, includes an assignment of the right to claim priority, and make sure each signature is either witnessed or notarized. These measures should be taken to prevent complications in various jurisdictions, such as some countries in Europe.

The U.S. District Court for the Western District of Michigan issued an obviousness-type double patenting (ODP)-related decision in Magna Electronics v. TRW. 

The term of a patent is usually based on the filing date of a patent application- usually a patent is good for 20 years after it is filed.  However, undue delays by the U.S. Patent and Trademark Office may result in accrual of patent term adjustment (PTA), which extends the normal life of a patent.  PTA can be reduced by any undue delay on an applicant’s part (for example, taking extensions of time when responding to an Office Action). 

An invention in a patent application must be new and non-obvious for it to be granted as a patent.  Obviousness-type double patenting (ODP)- is a Court created doctrine intended to prevent the unjustified or improper timewise extension of patent rights.  Claims are subject to an ODP rejection when claimed subject matter is not patentably distinct from, e.g., subject matter claimed in a commonly owned application or patent when the issuance of a second patent would provide unjustified extension of patent term.  To date, ODP rejections have typically been seen in later-filed applications, and can be overcome by terminally disclaiming the terminal portion of a patent that would extend beyond the expiration date of an earlier-filed application.

In this Magna Electronics v. TRW, however, citing Gilead, the Court issued an opinion and order granting partial summary judgment, invalidating an asserted patent (US 7,339,149) and wiping away its Patent Term Adjustment (PTA), saying the patent was invalid under the doctrine of obviousness-type double patenting in view of US 7,402,786.  Both patents claimed a common filing date, but the ‘786 patent was later filed and later issued, as compared to the ‘149 patent:

Although citing to Gilead, the opinion significantly expands the scope of the ODP doctrine, since an earlier-filed patent’s PTA (rightfully earned from undue USPTO delay), was eviscerated based on a later-filed application in the same family.  The decision may well  be appealed and possibly reversed, but in the meantime, it is representative of a worst-case-scenario come to pass.  If upheld, it will force patentees to seriously weigh the costs/benefits of filing (and put significant consideration into desired claim scope of) a continuation in a family that already has a PTA-carrying member. 

By Erica Hines.  

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