Patent Assignment Recordal

What This Means

• If you receive a patent assignment and do NOT record it at the USPTO within 3 months of the transfer date, a subsequent bona fide purchaser (BFP) who records first may take priority over your earlier assignment
• This is a notice recording act — it protects good-faith purchasers who had no notice of prior transfers

The Double-sale Scenario

• Day 1: Company A assigns patent to Company B
• Day 30: Company B has not yet recorded
• Day 30: Company A (fraudulently) also assigns the same patent to Company C
• Day 31: Company C records its assignment at the USPTO
• Result: if Company C was a bona fide purchaser (paid value; no actual notice of the earlier assignment to Company B), Company C may take priority over Company B

Actual Notice Exception

• If Company C had actual notice of the earlier assignment to Company B, Company C is not a BFP and cannot take priority
• A chain-of-title search before purchase provides constructive notice of recorded assignments
• Failure to search does not provide BFP protection if reasonable search would have revealed the prior assignment

Bona Fide Purchaser Requirements

• (1) for valuable consideration (not a gift or nominal payment)
• (2) without notice of the prior assignment
• (3) records the subsequent assignment
• ALL THREE must be satisfied to have BFP priority

Purpose of the 3-Month SAFE Harbor

• If you record within 3 months of the assignment date, you are protected even if a subsequent purchaser recorded in the interim period
• The 3-month window gives the initial assignee time to complete paperwork without being at risk from fraudulent intermediate transfers.

Documents Required

• (1) the assignment document itself (the executed agreement or a short-form assignment referencing the full agreement)
• (2) a cover sheet identifying: the assignor (transferring party)
• The assignee (receiving party)
• The specific patents and/or applications being assigned
• The nature of the conveyance (assignment; security interest; change of name; merger)

Identification of Patents

• List each patent by application or patent number
• For applications: application serial number + filing date
• For issued patents: patent number + issue date

Signatures

• The assignment document must be signed by the assignor
• The cover sheet is signed by the person submitting the recording request
• The USPTO does not verify the authenticity of the assignment — it simply records

Fees

• $40 per patent/application (online)
• $80 per patent/application (paper)
• Bulk recording: $40 for up to 10 patents on one cover sheet
• Additional patents: $2 per patent above 10

Recording Timeline

• USPTO typically processes assignments within 5-10 business days of submission
• Bulk assignments in M&A may take longer

What Cannot be Recorded

• License agreements are generally not recorded (although exclusive licenses can be)
• Security agreements for broad patent portfolios (better to file UCC-1 for portfolio-level security interests)

Recording by Assignee

• The assignee (not the assignor) typically submits the recordation request
• This ensures the new owner controls the process.

Which Controls

• The Federal Circuit held in In re Cybernetic Services (9th Cir. 2000) and related cases that: (a) for ownership interests (assignments): federal patent law governs
• Recording at USPTO is required
• (b) for security interests (mortgages; collateral): there is a circuit split on whether UCC or Patent Act governs

Conservative Approach (Recommended)

• Record in BOTH the USPTO AND file a UCC-1 financing statement with the applicable state
• The USPTO recording covers the Patent Act requirement
• The UCC-1 filing covers state commercial law requirements

What to Record at USPTO

• A security agreement (or a short-form security interest document) referencing the collateral patents
• The cover sheet must indicate the nature of the conveyance is a 'security agreement' or 'mortgage'
• USPTO assigns a reel and frame number as confirmation of recording

Automatic Termination

• When the security interest is released, a discharge or release document must be recorded at the USPTO and a UCC-3 termination statement filed
• Failure to release recorded security interests clutters the chain of title and affects future transfers

M&a Security Interest Issues

• In M&A due diligence, check the USPTO assignment database for recorded security interests
• Patents pledged as collateral to a lender must be released at closing (or the lender's consent obtained)
• Uncleaned liens affect the buyer's clean title

Ip-backed Lending

• IP loans are common in pharma
• Tech
• And media
• Lender typically records a security interest at the USPTO and obtains representations that the patents are unencumbered
• Collateral package must identify all licensed patents.

Minor Errors in Original Recording

• Typos in assignor/assignee name
• Wrong address
• Wrong patent number listed
• Missing patents

Substantive Errors

• Wrong assignor or assignee
• Incorrect date
• Incorrect scope of conveyance

Correcting a Minor Recording Error

• File a supplemental cover sheet (without a new assignment document) identifying the correction needed
• The supplemental recording will be associated with the original recording

Correcting Substantive Errors — Corrective Assignment

• Execute a new assignment document ('corrective assignment') that corrects the specific error
• Record the corrective assignment with a new cover sheet
• The corrective assignment creates a new recording entry

Common Scenario — Missing Patents in Bulk Assignment

• A company-wide assignment in an M&A records 1,000 patents but missed 50
• Solution: execute a corrective/supplemental assignment listing the 50 missed patents with the same effective date as the original

Change of Name Recording

• If a company changes its name (without a change of ownership), a name change can be recorded at the USPTO using a certificate of name change
• No new assignment document required

Merger Recording

• When companies merge, the surviving entity records a merger certificate or certificate of merger at the USPTO
• The merger automatically transfers the IP by operation of law
• The USPTO recording provides public notice

Chain of Title Gaps

• If a chain of title review reveals a gap (e.g., original inventor never assigned to Company A; Company A assigned to Company B without a clear chain), remediation steps: (1) execute a nunc pro tunc assignment (effective back to the correct date)
• (2) get the missing party to ratify the assignment
• (3) in litigation, file a corrective assignment before asserting the patent

Nunc Pro Tunc Assignments

• 'nunc pro tunc' = 'now for then'
• Corrective assignments backdated to the effective date of the original transaction
• Admissible to correct chain of title

European Patent Office (EPO)

• Assignment of European patent applications can be recorded with the EPO
• Rule 22/85 EPC: the EPO records changes in the proprietor of a European application
• After European patent grant, assignments are recorded with each national office (not the EPO)
• The recorded transfer at the EPO only covers the pending application phase

UK Ipo

• Assignment recorded at the UK Intellectual Property Office
• France (INPI): assignment registered at INPI
• Each EU member state has its own national patent office for post-grant recording

Japan Patent Office (JPO)

• Assignment of Japanese patents must be recorded at the JPO to be effective against third parties
• Japan patent law article 98 requires registration for assignments to be effective vs. third parties
• JPO recordation: online via J-PlatPat system

China National Intellectual Property Administration (CNIPA)

• Patent rights transfers in China must be registered with CNIPA
• Chinese patent law article 10: assignment of patent right must be registered with patent administrative department
• Effect of registration: the assignment is effective only after CNIPA registers it
• Unregistered assignments are NOT effective in China (more strict than US which uses BFP protection)

Practical Implication for M&a with International Portfolios

• Record assignments in each country as part of the post-closing IP integration
• Failure to record in China means the acquirer does not legally own the Chinese patents (even if it paid for them)

WIPO International Records

• PCT applications (pending international applications) can record changes in applicant/assignee at WIPO
• Once national phases begin, recording is at each national/regional office