Transferring Patent Ownership: Preexisting Licenses, Rights That Run With Patents, Encumbrances, Enforcement

Transferring ownership of a patent is not always a simple matter. Existing encumbrances on the patent can impact the rights and obligations of both the assignor and the assignee. In particular, preexisting licenses can present difficult questions for both the former and new owner of the patents. For example, will the license transfer with the transfer of ownership of the patent? If not, will any of the rights and obligations under that license run with the patent regardless?

In addition, it is often the case that the prior owner will want to retain certain rights under the patent even after assignment. The former owner may want the right to continue practicing the patent or grant licenses to affiliates or customers. The former owner may also want to retain some say in future litigation or assignment of the patent. The transfer must consider, however, the impact of those restrictions on the new owner's ability to enforce the patent. The Federal Circuit recently addressed an assignee's ability to enforce patents without joinder of the former owner where certain restrictions were placed on the new owner. The court concluded it was necessary to join the original patent owner for the new owner to have standing to sue. Lone Star Silicon Innovations L.L.C. v. United Microelectronics Corp. (Fed. Cir. 2019). Therefore, when transferring patent ownership, patent counsel must understand these issues to ensure the new owner can enforce the patent and the restrictions on the patent rights are clear.

Listen as our authoritative panel of patent attorneys examines transfers of patent ownership. The panel will address the impact of existing encumbrances such as preexisting licenses on patent transfers as well as the rights and encumbrances that run with the patent generally. The panel will also address how the terms of the assignment agreement may impact the new owner's right to enforce the patent. The panel will discuss how the courts are treating these issues and offer guidance for transferring patent ownership.

I. Transfer of patent ownership generally

II. Impact of preexisting rights and encumbrances

A. Rights that run with the patent

B. Encumbrances that run with the patent

III. Impact of preexisting licenses

A. Effect of assignment of the license agreement to new owner

B. Effect of retention of the license agreement by prior owner

IV. The assignment agreement and enforcement of the patent

A. Effect of preexisting licenses

V. Recent decisions

VI. Best practices for transferring patent ownership

The panel will review these and other key issues:

• How do preexisting encumbrances such as prior licenses impact the transfer of a patent?
• How can preexisting licenses or restrictions in an assignment agreement affect a new owner's ability to enforce the patent?
• What hurdles must counsel watch for when transferring patent ownership?