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Patent Assignment in India

Patents are intellectual properties that provide exclusive rights to the owner for a specific invention, but which can be transferred to someone else through the process of patent assignment that must be duly executed as per legal norms.

A patent allows the inventor to safeguard their idea from being used by someone else 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


Whenever someone applies for a patent, they are required to submit a detailed description of the invention so that others can benefit from the invention.

However, although others can read and learn about your invention, no one is authorized to make, use or sell it without your permission.

What is Patent Assignment?


The word ‘assignment’ has not really been defined in the Patents Act. However, it refers to the act through which the assignor transfers some or all the rights to the patent to an assignee. Post assignment, the assignee would have the right to sue anyone who violates the patent by using the invention without their 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 states that in case a patent is co-owned by two or more individuals, any share of the patent cannot be assigned to anyone else without the consent of all co-owners.

Types of Patent Assignments


While patents aim to prevent others from using the invention of the proprietor, patent assignment allows them to share their rights with someone else they deem worthy. There are three main types of patent assignments:

  • Legal Assignment: A legal assignment is where the assignee may enter their name as the patent owner in the government records. A patent created through a deed can only be assigned through a deed. Once the assignor has completed the process, the assignee gains all the rights of the patent.

  • Equitable Assignment: Any form or agreement including a letter in which the proprietor agrees to share a certain share of the patent with another individual is referred to as the equitable assignment of the patent. While the assignee cannot get their name entered in the register as one of the owners, they can notify the register of their interest in the patent.

  • Mortgages: Mortgages are assignments where the owner provides partial or complete right to an assignee in exchange for a certain amount of money. Once the amount is repaid, the owner gains back all rights to the mortgaged property. The lender cannot register themselves as the proprietor in the records, but get their name entered in the register as mortgagee.


 

Requirements for Patent Assignment


  • As mentioned before, patent assignment can only be considered a valid assignment if it has been drafted in writing and duly executed through the legal process.

  • The written draft must define all the rights and obligations of both the parties with respect to the patent.

  • The assignee shall apply in writing to the Controller of Patents to enter their name into the register of patents. Once the Controller of Patents is satisfied that the assignee has a genuine interest in the patent, they shall enter the details of assignment into their register.

  • Form-16 must be duly filled and filed before the Controller General of Patents, Designs and Trademarks. It records the necessary details that must be mentioned for assignment, such as name of the applicant, details of all parties involved, description of the draft through which assignment is being sought.

  • Two copies of the deed must be attached to the application as well.

  • Fees for the process varies for different individuals and entities and is different when applied physically and through the Internet. A detailed breakdown of the official fees for the process is mentioned in the First Schedule of the Patent Act.


 

Contents of Patent Assignment Agreement


Just like any other agreement, a patent assignment agreement must include the following:

  • Details of the parties to the agreement, i.e., the assignor and the assignee.

  • Description of the patent – registration number, date of registration, type of patent, etc.

  • Consideration in lieu of assignment.

  • Rights and obligations of all parties 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 in favor of the assignee.

Difference between Assignment and Licenses

Assignment License
Assignment refers to the 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

In case of infringement or mutual concession, the parties involved in the assignment may agree to amend certain parts of the agreement. Amendments in the patent assignments can majorly be processed in the equitable assignment deed. The deed should be registered with the Controller of Patents if it needs to be amended and cannot be halfway through the assignment process.
  • Termination of Patent Assignment Agreement

Deed termination is not really possible, as it is irrevocable and permanent in nature. Transferring the title of a patent through assignment is pretty much a permanent decision. It can only be terminated if it is a mortgage assignment deed.


Conclusion


A patent lasts for 20 years since the date of application, allowing inventors to prevent others from using their inventions for any type of gains. From being able to sell them for a substantial price and license them for royalties to using them as assets to gather funds from interested investors, a patent can prove to be extremely valuable depending upon the way the inventor wishes to use it.

As there are quite a lot of tedious aspects associated with patents and patent assignment, it is strongly advised to reach out to an experienced legal professional to avoid any patent-related complications in the future.

 

We can assist you with Patent Assignment Agreement concerns. You can get in touch with us by submitting a query below.

 

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