Understanding Patent Assignment in India

What Exactly is a Patent?

A patent is a form of intellectual property protection given by the government. It’s like a temporary monopoly granted to an inventor for a specific invention. This protection prevents others from commercially exploiting the invention without the patent holder’s consent for a set period, usually 20 years from the date of application.

According to The Patents Act, 1970, an “invention” is defined as “a new product or process involving an inventive step and capable of industrial application.”

It’s important to note that not everything can be patented. Section 3 of the Patents Act outlines several categories of inventions that are not patentable in India. These include:

• Inventions that are obviously against established natural laws (e.g., a perpetual motion machine).
• Methods of agriculture or horticulture.
• Literary, artistic, or dramatic works (these are typically protected by copyright).
• Inventions that are or could be contrary to public order or morality.

Why Are Patents Important?

When you apply for a patent, you’re required to submit a detailed description of your invention. This makes your invention’s details publicly available, contributing to the general body of knowledge.

However, even though others can learn about your invention, they are not authorized to use, make, or sell it without your explicit permission. This exclusive right is the core value of a patent.

What is Patent Assignment?

While The Patents Act doesn’t formally define ‘assignment,’ in practice, patent assignment is the legal act of transferring all or a portion of the rights associated with a patent from the original owner (the assignor) to another party (the assignee). Once the assignment is complete, the assignee steps into the shoes of the original owner and gains the right to take legal action against anyone who infringes on the patent by using the invention without consent.

Section 70 of The Patents Act explicitly empowers a patent proprietor (assignor) to assign or grant licenses related to their patent to other individuals (assignees). For this transfer of rights to be legally recognized, it must be in writing and properly executed.

Key Roles:

• Assignor: The original owner of the patent (the proprietor).
• Assignee: The individual or entity to whom the patent rights are being assigned.

It’s important to note Section 50(3) of The Patents Act, 1970, which states that if a patent is jointly owned by two or more people, no share of the patent can be transferred without the consent of all co-owners.

Different Ways to Transfer Patent Rights: Types of Patent Assignments

While the primary purpose of a patent is to prevent unauthorized use, patent assignment allows inventors to strategically share or monetize their rights. There are generally three types of patent assignments:

1. Equitable Assignment: This occurs when there’s an agreement, often accompanied by a letter, where the inventor agrees to transfer a certain portion of their patent rights to another person. Although the assignee might not immediately be registered as an official owner, they can inform the patent registry of their interest in the patent. This often acts as a precursor to a full legal assignment.
2. Legal Assignment: This is a more formal arrangement where the assignee is officially registered as the new owner of the patent in the government records. A legal assignment must be executed through a formal deed. Once this process is completed by the assignor, the assignee acquires all the legal rights associated with the patent.
3. Mortgages: In a patent mortgage, the patent owner grants complete or partial rights to the assignee (the lender) in exchange for money, much like a loan secured by an asset. Once the loan amount is fully repaid, all rights to the mortgaged patent revert to the original owner. In this scenario, the lender can only register their name as a mortgagee in the patent register, not as a proprietor (owner).

What’s Needed for a Valid Patent Assignment?

For a patent assignment to be legally valid in India, it must adhere to specific requirements:

• In Writing and Duly Executed: As per Section 70 of The Patents Act, the assignment must be a written document and properly signed and witnessed.
• Clear Rights and Obligations: The written document must clearly spell out all the rights and responsibilities of both the assignor and the assignee regarding the patent.
• Filing Form-16: A specific application form, Form-16, must be filled out and filed with the Controller General of Patents, Designs and Trademarks (the Indian Patent Office). This form requires detailed information about the parties involved, the applicant’s name, and a description of the assignment deed.
• Assignee’s Request: The assignee must then submit a written request to the Controller of Patents to have their name added to the official register of patents.
• Verification by Controller: After the Controller of Patents confirms that the assignee’s interest is legitimate, the assignment details are officially recorded in their register.
• Deed Copies: Two copies of the assignment deed should be attached along with the application.
• Fees: Specific fees apply, which vary depending on the type of applicant and whether the application is filed physically or electronically.

What Goes into a Patent Assignment Agreement?

A well-drafted patent assignment agreement typically includes the following essential components:

• Party Information: Full details of both the assignor (original owner) and the assignee (new owner).
• Consideration: The amount of money or other value exchanged for the assignment.
• Patent Details: Information about the patent being assigned, including its registration date, registration number, and type of patent.
• Rights and Obligations: A clear outline of the rights and duties of all parties involved in the agreement.
• Assignor’s Undertaking: A formal statement from the assignor confirming that they have not previously assigned or dealt with the patent in any way that would create a conflicting interest for a third party.
• Termination Clause: (Applicable for certain types like mortgages, or if other specific conditions are met, though general assignments are usually permanent).
• Dispute Resolution Clauses: Procedures for resolving any disagreements that may arise, such as arbitration or mediation.
• Indemnity Clause: A provision favoring the assignee, protecting them from financial loss or legal liability arising from the assignor’s past actions related to the patent.

Assignment vs. Licensing: Understanding the Key Differences

It’s common to confuse patent assignment with licensing, but they are fundamentally different:

Feature	Patent Assignment	Patent License
Nature of Right	Transfers ownership (wholly or partly) of the patent to the assignee.	Grants permission to use a patented invention, without transferring ownership.
Form	Must be in writing and duly executed (e.g., via a deed).	Can be granted without written documentation, though written agreements are highly advisable for clarity.
Payments	Assignee typically pays a lump sum for the transfer; no ongoing royalties to the original owner after acquisition.	Licensee is usually expected to pay royalties (periodic payments) in exchange for using the invention.
Cost	Generally more expensive due to the transfer of proprietary rights.	Usually cheaper upfront as ownership is retained by the licensor, but involves ongoing royalty payments.
Control	Assignee gains full control and can sue for infringement.	Licensee has restricted rights as per the agreement; owner retains right to sue for infringement.

Can a Patent Assignment Agreement Be Changed or Ended?

Amending a Patent Assignment Agreement:

If circumstances change, or if a mutual agreement is reached (perhaps due to an infringement or other concession), the parties involved can mutually decide to amend parts of the assignment agreement. Amendments to an equitable assignment deed can be processed. If a deed requires amendment, it should be formally registered with the Controller of Patents, and this cannot be done mid-way through the original assignment registration process.

Termination of a Patent Assignment Agreement:

Generally, a fully executed and registered patent assignment deed is permanent and irrevocable. Transferring the title of a patent through assignment is considered a final decision. The only common exception where termination (or rather, reversion of rights) is possible is in the case of a mortgage assignment deed, where rights revert to the original owner once the loan is repaid.

FAQs

Q1: What exactly does “exclusive rights” mean for a patent owner?

Exclusive rights mean that only the patent owner (or someone they’ve authorized) can make, use, sell, offer for sale, or import the patented invention for a specific period. No one else can do these things without permission.

Q2: Can I assign a patent before it is granted, while it’s still an application?

Yes, you can assign a patent application. The rights to the invention, even before a patent is officially granted, can be transferred. The assignment would typically state that it covers the application and any resulting patent.

Q3: What is the benefit of registering a patent assignment with the Controller of Patents?

Registering the assignment provides public notice of the change in ownership, protecting the assignee’s rights against third parties. It also makes the assignment legally enforceable and prevents potential disputes over who truly owns the patent. You can find forms and details on registration on the Indian Patent Office website.

Q4: If I assign my patent, can I still use my own invention?

Not automatically. Once you assign a patent, you transfer your ownership rights. If you wish to continue using the invention, you would typically need to enter into a licensing agreement with the new owner (the assignee).

Q5: What is “consideration” in a patent assignment agreement?

“Consideration” refers to the value exchanged between the parties for the assignment. This is usually money, but it can also be other forms of value, such as shares in a company, other intellectual property, or services. It’s an essential element for a valid contract.

Conclusion

Given the inherent complexities and time-consuming nature of obtaining and assigning patents, it is highly recommended to consult with an experienced legal professional. Their expertise can help navigate the intricacies of patent law and prevent potential complications in the future, ensuring your valuable intellectual property is managed effectively.

For hassle-free Patent registration and compliance, Filingg.com offers expert services to ensure your business thrives. For more details, contact 7791910007 or info@filingg.com today!