I recently ran across an IP due diligence issue that reminded me yet again of the importance of reviewing patent assignment documents and not simply relying on the USPTO’s assignment database. In this situation, USPTO records indicated that the inventors assigned the patent to a corporate entity. However, the assignment document actually stated that only certain claims of the patent were assigned to the corporation.
So what is the effect of such a document?
It’s commonly known that patents can be jointly owned in the United States. In such a situation, each co-owner enjoys an equal right to make, use, sell, and license the invention or inventions claimed in the patent. (Enforcement of a patent, however, can be tricky, since all owners must agree to participate in the patent infringement lawsuit.)
Does “joint ownership” include splitting claims among multiple assignees? For example, if a patent contains claims 1-5 covering a product and claims 6-10 covering a method of making the product, can claims 1-5 be assigned to Entity A and claims 6-10 assigned to Entity B?
Perhaps not suprisingly, the answer is no. An assignment can only convey (1) the patent as a whole; (2) an undivided percentage interest in the patent; or (3) (in some limited situations) an exclusive right to the patent within a geographic area. Over 100 years ago, the U.S. Supreme Court said that “claim-by-claim” patent assignments are not permitted.
So what is the effect of such a document if it is created? It’s a license. A licensee, of course, has rights to make, use, and sell the invention, but very limited rights to enforce the patent. Thus, an attempt to assign a patent on a claim-by-claim basis will provide the “assignee” with fewer rights than it expects.
(Thanks to my colleague Ritu Singh for helping me with the information for this post.)
Would it be considered an exclusive license? I would think so if the intent of the “assignment” was to convey all rights in the specified claims.
Most likely yes. The original Supreme Court decision (Pope Mfg. Co. v. Gormully – 1892) simply said that “the so-called assignment is a mere license”, and it did not state whether the license was exclusive or non-exclusive. However, in 2007 the Federal Circuit looked back at the Pope case and said that the license granted in Pope was exclusive, at least within the field of use of the particular claim. (See International Gamco, Inc. v. Multimedia Games, Inc. – Fed. Cir. 2007.)