The importance of carefully drafting an intellectual property assignment document

Often, transfers of intellectual property are implemented by form assignment documents.  The patent or trademark serial numbers are simply filled in, the signatures are applied, and the document is filed with the appropriate patent / trademark office.  However, a new case from the Federal Circuit highlights the importance of giving the language of a form document a close review to ensure that it is appropriate for the specific transfer.

In Euclid Chemical Co. v. Corrosion Tech., Inc., the Federal Circuit reviewed a patent assignment that conveyed the inventor’s “Issued U.S. Patent 6,033,553”.  The assignment document also contained boilerplate-type language that assigned all divisionals, continuations, continuations-in-part, and other applications claiming priority to U.S. Patent 6,033,553. 

However, at the time of the assignment, the inventor also owned another patent — U.S. Patent 6,217,742 — that was a continuation-in-part of the ‘553 Patent.  Although the ‘742 Patent did claim priority to the ‘553 Patent, it was not an “application” at the time of the assignment document.  Plus, the assignment document only refered to a single “issued U.S. patent” and did not use the plural term “patents.” 

Because of this ambiguity, the Federal Circuit reversed a District Court ruling that the assignment document covered the ‘742 patent.  Instead, the Federal Circuit remanded the case to the District Court to resolve the ambiguity.

In dissent, Judge Newman was even stronger in favor of narrowly construing the assignment — finding that the assignment document clearly did not cover the ‘742 patent. 

The opinion and its consent should prompt IP purchasers to carefully review assignment documents and ensure that they cover all of the IP that the purchaser thinks that it is getting.

Thanks to my colleague Brienne Terril for preparing the background material for this post.

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