IP: Patent in suit doomed by simple transfer of ownership

Patent owners must ensure that patents that are supposed to stay together under common ownership remain together

Any business with a patent portfolio is likely used to the assignment and reassignment of patents and patent applications on a regular basis. While this is often viewed as a trivial, “boilerplate” task, its importance should not be underestimated. Not only can mistakes frustrate patent and corporate transaction attorneys during asset transfers, but they can also spell disaster for the unsuspecting litigant and litigation counsel. This frustrating scenario recently unfolded against a patentee in a patent infringement case; the makings of a true patent horror story.

Most patent attorneys and attorneys who handle corporate and technology transactions are well versed in conducting due diligence and identifying issues that may arise in chains of title for patent assets, such as missing written assignments, misspelled or wrongly identified entities, misidentified entity types, transfers to nonexistent entities, or even incomplete transfer of rights. Because ownership and corporate entity status is dynamic, these attorneys must assess such issues temporally and in the context of the deal. To add complexity, there are potential patent transactions between the patentee and the U.S. Patent and Trademark Office (USPTO) that may have occurred during pendency of the patent application that may be affected by later transfers of ownership or changes in entity status. Unfortunately, not all litigation counsel understand or appreciate these aspects of patent prosecution that can affect patent ownership and standing issues in litigation.  

Contributing Author

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William Lenz

William J. Lenz is a partner at Neal, Gerber & Eisenberg LLP and represents clients in a wide variety of intellectual...

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