A patent enables an inventor to secure their thought or idea from being used by someone without their permission. While it provides exclusive rights to the owner, with the permission of the patent holder, it can be used by others through a patent assignment agreement. As there are quite a few intricacies associated with patent assignment, we have compiled an article to help you understand and guide you through the process.
What is a Patent?
A patent is an intellectual property granted by the government to inventors to prevent others from using, making or selling their inventions for a certain period of time.
As per the Patents Act, 1970, an invention is defined as “a new product or process involving an inventive step and capable industrial application”.
Section 3 of the Patents Act defines a set of inventions that cannot be patented by the inventor; some examples are:
- A frivolous invention which is contrary to well established natural laws.
- A method of agriculture and horticulture.
- Literary, artistic or dramatic works.
- An invention that is or could be contrary to public order or morality.
Need for Patents
While applying for a Patent, the inventor of the idea is required to submit a detailed description of the invention in order to aid others from the invention.
Although others can know or read about your invention, nobody is authorized to use, make or sell it without taking your permission.
What is Patent Assignment?
There is no definition for the word ‘assignment’ in the Patents Act. However, Patent Assignment is the act through which all or some of the rights of the patent are transferred to the assignee from the assignor. After assignment is done, the assignee has the right to summon anyone whoever violates the patent by using the invention without taking the consent.
Section 70 of the Patent Act grants power to the proprietor (assignor) to assign, grant license, etc. to other individuals (assignee) with respect to the patent. This grant of power must be in written and duly executed for it to be a legally acceptable transfer of rights.
Assignor: Owner of the patent (proprietor)
Assignee: Individual to whom the rights are being assigned to
Section 50(3) of the Patents Act, 1970 asserts that when a patent is co-owned by two or more persons, the share of the patent cannot be given to anyone else without taking the consent of all the co-owners.
Types of Patent Assignments
Although the main aim of the patent is preventing others from using the inventor’s invention, on the flip side, patent assignment allows them to share their rights with someone they consider worthy.
There exist three types of patent assignments. They are:
- Equitable Assignment: An agreement along with a letter wherein the inventor agrees to share a certain portion of the patent with another person is considered as equitable assignment of the patent. Although the assignee is unable to enter his/her name as one of the owners, they can inform the register of their interest in the patent.
- Legal Assignment: An agreement wherein the assignee enter their name as the owner of the patent in the government records is referred as a legal assignment. The assigning of the patent that is created through a deed can only be done through a deed. Once the process is done by the assignor, the assignee is able to acquire all the rights of the patent.
- Mortgages: An assignment wherein complete or partial right is given to the assignee by the owner in exchange of money. After the amount is repaid all the rights of the mortgaged property goes back to the owner. The lender can only enter their name as the mortgagee in the register but cannot register themselves as the proprietor.
Requirements for Patent Assignment
- As mentioned above, a patent assignment can only be deemed valid if it is duly executed through the legal process has been drafted in writing.
- The draft must elucidate all the obligations and rights of both the parties w.r.t the patent.
- Form-16 must be filled and filed to the Controller General of Patents, Designs and Trademarks. All the necessary details that must be mentioned for assignment are recorded in it that includes details of the parties, applicant’s name, description of the draft through which assignment is being sought.
- The assignee then requests in writing to the Controller of Patents for addition of his/her name in the register of patents. After the Controller of Patents is confirmed that the interest of the assignee is genuine, the assignment details is then added into their register.
- Along with the application two copies of the deed should also be attached.
- Different individuals are charged differently, and it also differs when charged physically or electronically. First Schedule of the Patent Act mentions a comprehensive division of fees for the process.
Contents of Patent Assignment Agreement
A patent assignment agreement incorporates the following content:
- Information about the parties to the agreement, i.e., the assignor and the assignee.
- Consideration in lieu of assignment.
- Information about the date of registration, registration number type of patent, etc.
- Obligations and Rights of all the parties that are involved.
- An undertaking of the assignor that they have not assigned or otherwise dealt with patent to create a third-party interest in the patent.
- Termination clause.
- Dispute resolution clauses.
- Indemnity clause that is in favour of the assignee.
Difference between Assignment and Licenses
| Assignment | License |
| It is a term used for transfer of ownership and of the patent to the assignee. | A license grants you the permission to use any patented invention, which would otherwise be referred to as infringement. |
| Assignments must be executed in writing. | Licenses can be granted without any written documentation. |
| Assignees don’t need to pay any royalties to the original owner. | Licensees may be expected to pay certain royalties in exchange of using the inventor’s product. |
| As you become a proprietor of the patent, it may be a bit expensive to get an assignment. | Licenses are much cheaper than assignments as you will also be paying some royalty in exchange of using the patent. |
Amendments and Termination
- Amending Patent Assignment Agreement: When an infringement or mutual concession occurs, the parties involved in the assignment may mutually decide to amend some parts of the agreement. Amendments in the patent assignments can be processed in the equitable assignment deed. If the deed requires any amendment, it should be registered with the Controller of Patents and it cannot be halfway through the process of the assignment.
- Termination of Patent Assignment Agreement: The termination of deed is not possible as it is permanent and irrevocable in nature. Transferring the title of a patent through assignment acts as a permanent decision. The termination is possible only when it is a mortgage assignment deed.
Conclusion
The validity of the patent is for 20 years since its application date. This allows the owners to avert others from using the inventions for any benefits. From being able to sell the patent for a noteworthy price and attaining a license for royalties to use them as assets to accumulate funds from investors, a patent can prove to be extremely valuable depending upon the way the inventor wishes to use it.
As the patent and patent assignment is cumbersome and time consuming, it is advised to connect with an experienced legal professional to avoid any patent-related complications in the future.
For further information, please contact:
Gautam Khurana, Managing Partner
India Law Offices, New Delhi
e: moc.seciffowalaidni@anaruhk.g
t: +91 11 24622216
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