There are two main types of marital property regimes in the
United States: "separate property" (followed by most
common law countries and the majority of states in the U.S.) and
"community property" (followed by most civil law
countries and currently followed by nine states in the
U.S.1). In "separate property" states,
property acquired by a spouse during marriage is that person's
own separate property. In "community property" states, on
the other hand, each spouse has a
present, vested, one-half ownership
interest in all property acquired by
either spouse during the marriage. Patent
ownership is governed by state law, and in community property
states, patents acquired during marriage are owned equally by both
spouses. Each state's law, however, is different, with some
states recognizing the property at the time of conception, and
others recognizing it some time later, perhaps not until filing or
not until the patent issues.
This simple rule could have profound implications for patent
law. For example, a joint owner of a patent must join all co-owners
to have standing to sue for infringement. Also, depending on the
governing state law and the specific facts, operation of state law
could make an inventor's assignment of the patent invalid, or
could allow the spouse, unbeknownst to the inventor, to separately
assign away the rights to the patent.
The impact of a community property regime on patent litigation
arose at the Federal Circuit in 2010 in Enovsys LLC v. Nextel Communications,
Inc. In Enovsys, a married inventor from California
assigned two patents to Enovsys, and Enovsys asserted the patents
against Nextel. Nextel moved to dismiss, arguing that Enovsys
lacked standing because it did not join the inventor's ex-wife.
The Federal Circuit held that the ex-wife did have an ownership
interest in the patents at one point because the two patent
applications were filed during the marriage. During the divorce,
however, the inventor and spouse declared there was no community
property, and the Federal Circuit held that the divorce decree was
a valid state judgment entitled to res judicata effect. In
other words, it seems that absent the divorce decree, Nextel's
defense might have worked!
But even without the divorce decree, Nextel may not have won the
motion to dismiss because in most community property states,
subject to some exceptions, either spouse can independently sell
personal property. That means that in the ordinary course of
business, such as employment agreements and inventor-employer
assignments, the employer or assignee probably does not need to get
the spouse's signature to have a valid transfer of ownership.
But this may not provide much comfort to a risk-averse patent
attorney. What if the law and circumstances implicate one of the
exceptions to the general rule and both spouses' signatures are
required for a valid transfer? What if the spouse had already
assigned the invention to someone else before the inventor did?
Marital property laws in community property states can have
serious implications on patent ownership. Lawyers and business
owners that are involved in the purchase and sale of patents, or
patent litigation, may want to evaluate how these state laws could
impact their business and seek to perfect any ownership questions
that may exist.
Originally published March 15, 2013
1 While a minority of states, most of the West and
Southwest of the United States follows some variation of a
community property regime. The nine states are Arizona, California,
Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and
Wisconsin. Alaska is by default a separate property state but
spouses have the option of electing to have community property
rules govern the ownership of marital property.
This update is for information purposes only and should not
be construed as legal advice on any specific facts or
circumstances. Under the rules of the Supreme Judicial Court of
Massachusetts, this material may be considered as
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Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
On April 6, 2017, the Federal Circuit reversed-in-part and affirmed-in-part the district court's judgment of infringement and summary judgment for non-infringement of The Medicines Company's ("MedCo") patents-in-suit.
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