What is a Patent Assignment?

What is the Result of an Assignment of a Patent?

A patent assignment is a transfer of patent ownership.  This is distinguished from a patent license which is the transfer of patent rights under the patent without transferring ownership of the patent. For example, if Rocket Corp sells its engine division to Space Monkeys, LLC., the patent portfolio associated with the business of Rocket Corp’s engine division might be included as part of the sale. In that case, as part of the sale, Rocket Corp would assign those “engine” patents to Space Monkeys. Once the assignment agreement is executed by the parties and the assignment is complete, Rocket Corp would no longer have any rights associated with those “engine” patents in that they would then be owned by Space Monkeys. If, at some point in the future, Rocket Corp decides to get back into the engine business and begins making and selling engines, they might infringe the engine patents that they assigned to Space Monkeys. If that happened, as the owner of those patents, Space Monkeys could sue Rocket Corp for patent infringement. One approach Rocket Corp could have taken to avoid this eventuality would have been a license agreement. More specifically, Rocket Corp could have negotiated a non-exclusive, perpetual right to make and sell engines covered by the claims of those patents. This is sometimes referred to as a license-back. A license-back can enable Rocket Corp to continue to make and sell engines covered by the assigned patents without fear of being sued for patent infringement by Rocket Monkeys. Now, whether Rocket Monkeys would agree to a license-back depends completely upon their business goals. For example, Rocket Monkeys might not be concerned about competition from Rocket Corp at some point in the future. Or, by allowing the license-back as part of the deal, Rocket Monkeys might have been able to negotiate a substantially lower purchase price for the Rocket Corp’s engine division. In any event, since patents (and other forms of intellectual property) are business assets, patent assignment and licensing decisions are always made in furtherance of business goals. Now, one situation where patent assignments are quite common is in connection with employees. In this day and age, almost every employment relationship on the planet includes a requirement that employees assign their patent rights to their employer. The mentality is simple: the employer pays for everything from the employees’ salary, to to the labs and engineering facilities, to the tools of the trade, to the patent preparation expenses, and everything in between. So, it makes sense that the employer would require an assignment of all associated patent rights. Which means that while the employee might forever be listed as the inventor on the face of the patent, their rights to that patent will be short-lived. The moment the assignment is made from the employee to the employer, the employee gives up all rights to that patent. And, in all likelihood, the employer will not provide a license-back to the employee. 

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