Tuesday, February 18, 2014

Can Joint Owner Assign All Patent Rights?

Dear Rich: In your first edition of your book, License Your Invention, you state in Chapter 4, "When there are joint owners, all of the owners must consent to an assignment of all rights to the invention. That is, none of the owners can give up all rights to the invention without obtaining agreement from the other owners."Please tell me where I can get background information about this statement. I have not been able to find this in Title 35 of the United States Code. Joint owners of patents can do some pretty crazy stuff -- they can license the patent without the consent of the other joint owners and without paying them either. But an assignment, unlike a license, is a permanent transfer of ownership. It's an outright sale of the patent, and for that reason, a joint owner can only assign his or her interest. As stated in 37 C.F.R. 3.1 (Definitions: Assignment)
Each individual inventor may only assign the interest he or she holds; thus, assignment by one joint inventor renders the assignee a partial assignee. A partial assignee likewise may only assign the interest it holds; thus, assignment by a partial assignee renders a subsequent assignee a partial assignee. All parties having any portion of the ownership in the patent property must act together as a composite entity in patent matters before the Office.
If it were any other way, any joint owner could easily "steal" the rights of his co-owners depriving them of any possibility of revenue. There is even case law prohibiting joint owners from granting exclusive licenses (rights that exclude other inventors from licensing) without the consent of all owners. Of course, joint owners can contradict these rules by a written agreement.
PS Dept. Your edition of our book may not be current (it's about 20 years old). The current version is entitled Profit From Your Idea: How to Make Smart Licensing Deals.