The ability to rely on ownership of an invention is critical to a business seeking full enjoyment of the rights available to it in the invention. While assignment agreements drew little attention in the past, recent decisions in multiple jurisdictions confirm the importance of considering assignment agreements early in the patent process and throughout the life cycle of a business' global patent strategy. These decisions raise key considerations for securing ownership and avoiding surprises.
Review and Confirm Assignments
The realities of business make it prudent practice to acquire assignments of inventions before the invention even exists. For example, businesses commonly require their employees and contractors to execute employment agreements including assignment provisions that purport to assign ownership of all future inventions and related rights to the business.
In Canada, two recent decisions considered this issue: Verdellen v. Monaghan Mushrooms Ltd., 2011 ONSC 5820; and Century 21 Canada Ltd. Partnership v. Rogers Communications Inc. [2011] B.C.J. No. 1679. These cases applied basic property law principles in restating that assignment agreements cannot effectively assign legal ownership to intellectual property, such as an invention, if the invention does not yet exist. Rather, an assignment to a future invention is merely a promise to assign, requiring additional acts to complete the assignment once the invention is created.
It then becomes critical to ensure that inventor-employees are obligated to, and do in fact, execute further agreements to confirm the business' ownership to a future invention once it is made.
Regularly revisiting ownership status of an invention is also good practice. An opportune time for reviewing ownership status and confirming assignments is early in the patent process, such as at the time of filing.
Have Rights Actually Been Assigned?
In contrast to Canadian practice, U.S. law establishes that no further action is necessarily required to convert legal title to a future invention once the invention comes into being (Filmtec Corp. v. Allied-Signal, Inc., 939 F. 2d. 1568 (Fed. Cir. 1911)). In this context, recent U.S. decisions distinguish a present assignment of a future interest from a mere promise to assign (C. R. Daniels, Inc. v. Naztec Int'l Group, LLC, 1:11-cv-01624 (D. Md. Apr. 13, 2012); Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc., 131 S. Ct. 2188 (2011)). In these decisions, the use of language such as "does hereby assign" or "does assign" was considered to effect a present assignment of a future interest, whereas language such as "agree to assign" was considered to transfer a mere promise to assign rights in the future. The impact of this distinction can be severe since, unlike a present assignment of a future interest, a promise to assign results in no transfer of title until the assignment is confirmed.
It is, therefore, important to consider the language of the assignment to confirm that interest has actually been assigned and not just promised.
Assign Priority Rights Before Filing
A valid priority date can be critical to patentability in that it limits the state of the art that is considered when assessing novelty and inventive step requirements. Assignment of the right to claim priority can, therefore, have a crucial affect on patentability, as recently demonstrated in decisions by the European Patent Offi ce (EPO) Boards of Appeal (T0062/05) and national courts of the contracting states to the European Patent Convention (Edwards Lifesciences AG v. Cook Biotech Incorporated [2009] ENHC 1304 (Pat)). These decisions emphasize stringent requirements for transferring priority rights. Specifically, the decisions confirm that priority can be claimed only by the identical applicant of the earlier application, and that the right to claim priority is only transferable so long as it is transferred by way of assignment or the operation of law, before the filing of the later application.
The potentially serious consequences of an invalid transfer of a priority claim highlight the importance of considering assignments early in the patent process, and preferably before relying on a priority claim.
Recent developments in assignment practice worldwide confirm the increasing importance of considering assignment issues early in the life cycle of a business' global patent strategy to ensure that ownership of the invention and its related rights is secured.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
