Patent Assignment Recordal

Recording protects assignees against subsequent purchasers and perfects chain of title: LEGAL BASIS — 35 U.S.C. § 261: 'An assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of the purchase or mortgage'; 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.

The mechanics of recording a patent assignment at the USPTO: USPTO ASSIGNMENT CENTER: online assignment recordation at assignment.uspto.gov (or USPTO Patent Center); 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); NOTE: the cover sheet is what gets recorded and appears in the public database; 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; PUBLIC RECORD: once recorded, the assignment appears in the USPTO patent database and is searchable by the public; 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.

Perfecting a security interest in patents requires both UCC-1 filing AND USPTO recording: THE CONFLICT BETWEEN UCC AND PATENT ACT: a security interest in patents can be perfected under two competing systems: UCC Article 9 (state commercial law) and the Patent Act (35 U.S.C. § 261); 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.

Errors in recorded assignments must be corrected to maintain a clean chain of title: TYPES OF ERRORS: 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; BUT: some courts give limited weight to nunc pro tunc assignments in standing disputes.

International assignment recording requirements vary by country: 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; NATIONAL EUROPEAN OFFICES: Germany (DPMA): assignment recorded electronically or by post; 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; TIMELINE: allow 2-6 months for international recording to process (some jurisdictions are significantly slower than the USPTO).